Sunday, September 17, 2017

How Expensive is Double Dragon (DD) now fundamentally based on their June 2017 Quarterly Report?

DoubleDragon Properties Corp. (DD), formerly Injap Land Corporation, was established on December 9, 2009 to primarily engage in the business of real estate development and other real estate-related business ventures. The Company started commercial operations in November 2010. DD was originally 100%-owned by Injap Investments, Inc. (IJI), a holding company owned by the Sia family. In June 2012, DD became a joint venture between IJI and Honeystar Holdings Corporation, the holding company of the Tan and Ang families. The Securities and Exchange Commission approved the Company's change in name to its present one on August 1, 2012.

DD and its subsidiaries own, lease, and enter into joint venture agreements covering several tracts of land for community malls, office, residential and other types of developments. As of December 31, 2016, DD has eight subsidiaries including DoubleDragon Sales Corp., DoubleDragon Property Management Corp., DD Happyhomes Residential Centers, Inc., DD-Meridian Park Development Corp., CityMall Commercial Centers Inc., Piccadilly Circus Landing Inc., Iloilo-Guimaras Ferry Terminal Corp. and Hotel of Asia, Inc.

At present, the Company has acquired a total of 54 sites for its community malls. Ten (10) CityMalls have commenced commercial operations while 29 are under construction, of which majority will be opening in 2017. Meanwhile, 15 will be completed and majority thereof will be operational by 2018.

The Company’s core projects include CityMall, DD Meridian Park, Jollibee Tower, The SkySuites Tower, Dragon8 Mall, and W.H. Taft Residences. DD also has several projects in Iloilo, namely, Injap Tower, The Uptown Place, People’s Condominium, FirstHomes Subdivision, and HappyHomes – Mandurriao.

As of Sept 15, 2017, DD was last traded price at 40Php, even though the market price dropped, it's still 8.7 times higher compared to the recorded book on their June 2017 quarterly report. A value investor may found this quite overvalued. On the other hand, investors of this share perceived that the net worth of the company should be 8.7 times more than its current value, perhaps because of the potential earning in the future, the trust on the company management or any other else like, effective marketing approach to attract investors.

In terms of P/E, the company recorded a trailing P/E of 154 meaning, for every 1Php earning last 2016, investors of this company are willing or is paying 154Php which, may be expensive. With a 154 P/E and with a growth rate of 4% from 2015 to 2016, the company trailing PEG ratio would be 38.4 which means, investors of this company are paying 154Php for every 1Php income last 2016 for a 4% growth rate from 2015 to 2016. A fair valued stock usually has PEG ratio of 1 meaning, what you are paying for that earning- the P/E is equivalent to the growth rate- increase in EPS.

Disclaimer: Trade or invest at your own risk.


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