What happened:

  • Chu kai Plc (ticker: CRANE) announced on the 14th January 2014 a sale of land worth THB 500 mn.
  • CRANE itself is leasing cranes that can be used in many industries such as construction, import and export, refinery plants, power plants, and petrochemical plants. Most cranes of The Company are good used cranes imported from Japan.
So what?
  • We’ve heard about this rumour for 18 months that they are going to be selling this piece of land and a lot of local speculators became involved in the stock which put us off it but let’s see what the impact of this is on the company
  • The expected profit to the company is THB 122.04 mn (net of book value and transactional fees) => an additional EPS of THB 0.21 / share (thb 122mn/577mn shares); in 2011 EPS was 0.22, EPS12 was 0.38, 9M13 EPS was EPS0.28, so you can see the impact it has on the PE for the company on a short term basis.
  • One of our first thoughts was will there be an massive dividend out of this? Doesn’t look likely as the firm wants to pay down debt and use the rest as working capital. So be aware of seeing a low PE for this stock, we don’t say its a bad company, we like their business model, but its just a temporary bump in EPS.
Source: SET

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