Moderation ahead?, page-9

@MarkHGO
Hi,

I agree that it is interesting to have a look at the housing sector again.
As it will probably benefit when RBA will stop increasing interest rates.

I was looking again at CWP.
A bit tough to draw any obvious conclusion with them.

Some really positive elements looking at valuation : P/B of less than 1 x and dividend yield of 6.2 % (with a payout ratio of 60 %).
P/B is only 0.8 x (after tax on potential capital gain), based on the revaluation of Williams Land Shopping Center and adjacent land only (cf recent elements given by the company).
Obviously, this market valuation under the book value is interesting, in particular as the company expects to sell its William Shopping Center + adjacent land much above its book value (83.6 m of estimated value in 2021 vs 38.6 m in book value in June 22). However, there is no certainty that the company will again be valued in line with their book value, as they still do not give any updated value for the rest of their portfolio.

Less good is still the trend for ROE.
It improved in FY 22 to 8.9 % vs 8.2 %.
But all the improvement is explained by the significant increase of their gearing from 28.3 % in FY 21 to 47.2 % in FY 22.
During the same time, EBIT margin deteriorated at 16.2 % in FY 22 vs 16.9 % in FY 21.
This is fully explained by a large decrease of their gross margin from 30.7 % to 28.9 %.