Saizen REIT: Insiders are accumulating again.

I read this in The Business Times just last evening:

CEO, Chang Sean Pey and executive director, Raymond Wong, acquired units in Saizen REIT this month with a combined 602,000 units purchased from 4 to 7 June at 14 cents each.

This is the CEO's first on-market trade since September 2011. The CEO now holds 3.65 million units or 0.26%. He acquired 2.02m units from March 2009 to September 2011 at an average price of 15.5c each.

Executive director, Raymond Wong, now has a deemed stake of 24.909m units or 1.74%. Prior to the acquisitions this month, he acquired 6.7m units from February 2009 to August 2010 at 10c to 17c each or an average of 14.3c each.

Also positive this quarter, executive director, Chan Kin, purchased 530,000 units on May 25 at 13c each. His deemed holdings increased to 185.041m units or 13.8%.

Of course, with insiders buying, it does not mean that the unit price is only going up from now.  However, do they know something we don't? Or do we know what they know but are unwilling to act like they have?

I do know Saizen REIT would be paying its half yearly income distribution in September. Is it going to be a bumper distribution?

Related posts:
1. Saizen REIT: Why did I buy and would I buy more?
2. Saizen REIT: Insiders buying again at 14c.
3. Saizen REIT: Acquisitions to increase DPU.

China Minzhong: Too cheap to sell.

One of the things we hear is that we should buy at prices we would not sell at and to sell at prices we would not buy at. Not too long ago, on 5 June 12, I said that it is not a good time to sell China Minzhong's shares and that it would be more sensible to think of adding to any long positions. See the blog post: here.

In a research dated 11 June 12, Kim Eng says that:

We would not recommend investors to cut loss at this stage as stock valuations are still too cheap to do so. ... The next catalyst for the stock would be the full-year results ended in June 2012. We expect to see revenue recovery due to the late-winter season and the fact that Minzhong should also be able to collect the bulk of its receivables in 4QFY6/12. The full-year numbers should reveal the impact of the European problem on both demand and asset quality.

How low can the share price go? We conduct a scenario analysis to determine how low the share price can fall to ... Although we believe that the share price has already factored in the potential slowdown in demand in Europe and our target PER of 4.7x is 25% below the historical average, we have:

1. cut our sales volume further by an aggressive 40%,

2. written down CNY200m in receivables for FY6/13, and

3. revalued the share price at 3.7x PER, which is 1 standard deviation below the historical average PER.

The upshot is a target price of SGD0.51, which is only a little below the current price of SGD0.53.

Minzhong’s worst case NAV per share (we exclude land use rights, land improvement costs as well as 20% of trade receivables) also suggests the current share price provides a very safe floor.