To take a step back, in previous reports and analyses done by The Edge Singapore, a disconnect is evident between asset-heavy companies such as developers, and their net asset values (NAVs). One way to narrow the P/NAV ratio is for the developer to have a more liquid balance sheet. When Hongkong Land's current group CEO, Michael Smith, came on board, he articulated a new strategy in a circular dated Oct 29, 2024.
Hongkong Land is one of the Straits Times Index's top performers this year, up 51% in share price alone, and returning 59% based on Bloomberg's total return formula. This has helped it to narrow its discount between its trading price and its net asset value of US$13.29.
With the 25bps cut by the Federal Reserve announced on Sept 17, Hongkong Land could be readying for asset monetisation, as the group's management had articulated in a strategy announcement in 2024. Already, investors have voted with their wallets on the new strategy of higher dividends, share buybacks and the asset monetisation programme.
