RLC is curently experiencing heavy foreign selling and it is fast approaching oversold territory. RLC is now trading near its 52-week low of 14.50.
A tanking RLC share contrasts its 9M2022 results. In the nine-month period of 2022, rental income rose to 11.3 billion from 7.9 billion in 2021. Rental income is expected to grow further as it added 7.1 billion of investment properties in the first nine months of 2022. The growing demands from RLC’s recurring business units spurred its strong earnings results for the first nine months of 2022. 9M2022 consolidated net income ended at 6.7 billion, 6% higher than the same period in 2021.
The unlocked value of RLC lies in its investment properties. As of September 30, 2022, RLC booked investment properties of 125.7 billion at costs less depreciation. Imagine the value of these investment properties if appraised to market value.
While investment properties are illiquid there is a machine called REITS that unlocks their value. RL Commercial REIT will gradually buy these investment properties at market value in cash from RLC giving RLC a windfall. The windfall could be recycled to more investment properties and distributed to its shareholders.
And speaking of distribution to shareholders, RLC is again embarking on a 3 billion share buy-back program.
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