Cedar Woods valuation

I've been wondering for some time what was the best way to value CWP.
Given its business and cyclicity, it is difficult to use metrics like PE or free cash flow yield.
At this stage, the best valuation metrics I've found is to look at price/book and compare it to ROE.
Once again, because of the cyclicity, it probably makes more sense to look at an average ROE on a certain period.

Looking at the past 5 years (until FY 20), they had an average ROE of 11.7 %.
This can justify a P/B of 1.7x to 2.3x, depending on the level of long term growth assumed (between 0 % and 3 %).
That corresponds to a target price of 7.80 $ to 10.10 $.

This level of ROE during the past 5 years is not particularly high for them as :
- it includes FY 20, when they had a ROE of 5.5 % (first time since 2006 under 10 %),
- it compares to an average ROE much higher if we look at the past 11 years.
This average ROE of the past 5 years probably reflects the weakness of the Perth market during that period.

Of course, like every valuation work, this is subjective and depends on your main assumptions.