REITERATE BUY on CSI Properties (資本策略) 497.HK @ $0.18

REITERATE BUY on CSI Properties (資本策略) 497.HK @ $0.18 

• NAV per share is around $0.65 so current price represents a 70%+ discount.
• Property market in HK is bullish and should continue to remain so in the next 12-18 months due to a) low interest rates, b) low supply and c) influx of hot money from Mainland and abroad, and so in theory, the NAV of CSI Properties' portfolio should continue to increase.
• CSI Properties has engaged agents to solicit offers for its AXA Centre(worth $2.8-3.0 billion at market price vs. $1.44 billion cost at book).  If the sale happens, there will be a huge gain of more than $1.3 billion.
• CSI Properties is also planning to start selling its other property project(The Amber @ 45 Blue Pool Road, Happy Valley) at the end of this year.
• I have visited many of their properties sites (AXA Centre, Project @ Hoi Ping Road, Project @ Hankow Road), they are in very good locations.  Properties are about location, location and location, right?
• The Company announced a dividend of 5 cents for last fiscal year, which give the stock a 3% dividend yield.  This gives the stock a baseline for valuation, and it's unlikely that share price will go much below current level.
• The stock has been a serious laggard this year.  This stock doesn't fall into the radar screens of that many stock analysts because of its size.  Stock price would benefit from more people paying more attention to this stock.  The sale of AXA Centre and other projects should raise this company's profile.  You can see this same effect happening to Emperor's stock price when it started to sell 維壹 and The JAVA).
• Overall, I think the stock is undervalued and I'm sure there are others out there who feel the same.  The question then becomes when stock price will converge to its fundamental value (which I believe is ~$0.35).  The stock needs a spark to touch it off.  The best one would be selling AXA Centre & paying a huge special dividend.  The latter may or may not happen, but all in all, I feel this is a very good risk-return trade.