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QuestionsCategory: Investor PsychologyHongKong Land Holdings Limited
Cecilia Lui asked 4 years ago

Hi Rusmin
(1) HongKong Land is currently trading at 30%+  of their book value.  In your opinion is the share price undervalued?
(2) As this counter is trading at USD, what are the factors to take into consideration when buying this share? (as there is a currency exchange risk involved)
(3) The current situation in HongKong is chaotic.  What sort of impact do u think this will have on this share?

2 Answers
Jieren Zheng answered 4 years ago

I would feel that you should have a look at the at the long term PB ranges of this counter (I would say the valuation is somewhat attractive).

FX risks are just one of the risks involved, regarding Hong Kong, it is actually the reason why the share price has been hammered so badly in the recent times.

Rusmin Ang answered 4 years ago

HI Cecilia,
I agree with Jieren that their valuation is rather attractive but that will only stay true if HK remains a financial hub and wouldn’t lose its status as a safe country to work and live there. The share price has been coming down mainly due to the fact that HK property remains very expensive (the market decides to give a discount) and the on-going protest which could structurally damage HK economy. The future impact will largely depend on how bad the protest is going to be down the road which is anybody’s guess. At this point, it looks depressing (not recovering anytime soon) and that’s why it is called a crisis. 
Unlike currencies from emerging country, I think USD/HKD is a relatively stable currency in my opinion. There are still risks such as de-pegging exercise of USD against HKD and one needs take on the volatility risk against SGD.