Intro
Hong Kong Ferry Holdings is mainly engaged in property development and investment. As the name says, they also operate a ferry business and has expanded into the medical field.
Major sources of income are currently rental income from properties and interest income on the cash reserves.
Due to the large cash reserves, the company paid out a special dividend for its 100th anniversary in 2023 of HK$1 per share besides its ordinary dividend.
Warning: this is – again – a very illiquid stock and hence not suited for everybody.
Valuation
The balance sheet as of mid-2023 can be summarized as follows:
- HK$3.5bn of non-current assets (mainly investment properties)
- HK$1.8bn of inventories (mainly properties in development)
- HK$1.8bn of cash
With no financial debt, this leaves equity of HK$6.9bn. Compared to the market cap of HK$1.6bn, the P/B ratio stands at 0.23.
What’s next?
At the current stock price, it is possible to buy this 100-year-old company at just the cash in the bank value and all real estate and other business is given on top of that for free.
All in all, although there might be macro risks, this seems to be a solid risk-reward situation.
Current Price
HK$4.50 per share
Disclosure
As with most shares discussed on here, the author is long Hong Kong Ferry.
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