Sia-Tan Caktiong’s winning formula: DoubleDragon doubles profits with appraisal gains from buildings, lands ahead of $75B Singapore bond offer

Re-appraise, revalue, and repeat.

This has been the major strategy of bilyonaryos Injap Sia and Tony Tan Caktiong to crank up the bottomline of DoubleDragon (DD) every year.

Sia and Tan Caktiong went to this tried and tested formula again when it tweaked its third quarter report to double its profits due to a revaluation of its land and buildings as it prepares to raise up to $75 million from a top up placement of its Singapore -listed bonds..

In its amended quarterly report, DD adjusted several items in its third quarter financial report with the biggest change in made in non-operating income which ballooned from the original report of P746 million to P7.3 billion in the first nine months of 2021.

The re-appraisal and revaluation of its buildings and assets increased its profits from P4.178 billion to P8.31 billion; total assets from P129 billion to P136.59 billion; and total equity from P64 billion to P68.57 billion.

The revaluation improved its debt to equity ratio to .63 times or way below its D/E ceiling of 2.33 times.

DD explained: “Amendments were made to align with the company’s reviewed financial statements that will be filed in relation to the planned Reg S Tap on DoubleDragon’s outstanding US dollar-denominated Senior Guaranteed Long Term Bonds due in 2025…The planned Tap Offering will be the second tranche to increase the already listed maiden US dollar Bonds of DoubleDragon’s wholly owned offshore subsidiary DDPC Worldwide in the Singapore Exchange due in July 2025.”

An official from a major property developer was surprised by DD’s massive adjustment to its books prior to its foreign fundraiser. “It’s not a normal practice here, especially among major players,” said the official.

A stock analyst pointed out DD made billions from appraisal gains of its buildings and lands – P9.627 billion in 2018; P13.5 billion in 2019; P8.361 billion in P2020; and P6.568 billion as of the first nine months of 2021.

“DD does not depreciate its assets, it revalues its assets and the appreciation is booked as gain. In normal accounting, DD has to show the depreciation expense as a conservative approach. Makes you wonder if it discloses the appraised value of its assets. If DD books P5 billion in appraisal gains, in 10 years, it would have valued these assets at P50 billion,” the analyst said.

SOURCE: Bilyonaryo

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Tan Caktiong, Sia to launch first PH industrial REIT IPO in the second half

Bilyonaryo Tony Tan Caktiong and real estate tycoon Edgar “Injap” Sia II are gearing up launch the country’s first industrial real estate investment trust (REIT) initial public offering by the second half.

CentralHub Industrial Centers Inc., a joint venture between Tan Caktiong-led Jollibee Foods Corp. and Sia’s DoubleDragon Properties Corp., is ramping up the construction of its industrial warehouse portfolio in preparation for its planned IPO.

The company recently completed CentralHub-Tarlac phase-4, comprising of a 6.2 hectare warehouse complex, adding to its existing hubs in Capiz, Pasig and Laguna.

New industrial hubs will soon rise in Iloilo, Davao and Cebu, further bumping up CentralHub’s industrial land portfolio of 43.8 hectares.

“We are currently ramping up the simultaneous construction of various CentralHub industrial complexes across the country as the demand for modern industrial warehouses continues to grow. We aim to establish a strong foothold in this sunrise property sector as we aim to make DoubleDragon become one of the largest landlords of industrial warehouse space in the Philippines,” said Sia, chairman of DoubleDragon.

“We believe that with the Covid19 pandemic pushing the acceleration of the ongoing shift from the old economy to the new economy will put property companies in a situation where it is not the current size of the company’s current leasable square meter portfolio that will be important, but the composition of the portfolio that will matter the most going forward,” he added.

SOURCE: Bilyonaryo

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