Regal REIT (1881 HK) Is Dirt Cheap At 0.1x P/B. Sells Asset At 0.8x P/B.
Regal REIT (1881 HK) has announced it will sell the Regal Oriental Hotel in Kowloon City to Blue Sky Properties (owned by Centaline) for HK$1.51bn (gross proceeds).
Centaline intends to convert the hotel into a student hostel once the necessary government approvals have been satisfied.
Even with a haircut to book - ~0.8x P/B by my calcs - this sale is a win for Regal REIT, currently trading at 0.1x P/B.
Regal REIT (1881 HK) is super illiquid. Look away now if this is not your bag.
The Trade:
Liquidity is a major issue.
Given the bombed out P/Bs, now seems an opportune time for Lo Yuk-sui to privatise companies up & down the vertical holding structure.
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