Close menu




April 7th, 2022 | 14:25 CEST

The alternative to concrete gold: Vonovia, Hong Lai Huat, HeidelbergCement

  • RealEstate
  • Gold
Photo credits: honglaihuatgroup.com

Concrete gold and tangible assets - these two terms have probably been used the most in the past ten years or more. The run on real estate began as early as after the great financial crisis. In retrospect, it is almost amusing that the first warnings of a bursting real estate bubble were sounded as early as the mid-10s. But the trend continued, on and on. Most recently, residential real estate prices have risen by around 12% in a single quarter. Once again, warnings of an end to the upswing are being voiced, such as by Deutsche Bank. But how strongly can real estate correct? Or will the real estate boom continue? Today, we present three shares as an alternative to apartments and highlight the particular advantages of real estate shares.

time to read: 3 minutes | Author: Nico Popp
ISIN: VONOVIA SE NA O.N. | DE000A1ML7J1 , HONG LAI HUAT GROUP LIMITED | SG1EE1000009 , HEIDELBERGCEMENT AG O.N. | DE0006047004

Table of contents:


    Justin Reid, President and CEO, Troilus Gold Corp.
    "[...] Troilus has the potential to be an entire gold belt. All of our work to date points to this, and each drill hole makes the picture we have of the Troilus project much clearer. [...]" Justin Reid, President and CEO, Troilus Gold Corp.

    Full interview

     

    Vonovia: Even a 3.8% dividend yield is not enough

    Anyone buying an apartment or a house has to dig deep into their pockets: Around 12% in additional costs are added to the purchase price. In addition, tradespeople almost always end up being more expensive than previously thought. There are further cost traps for owner-occupiers: Once you have settled in, you naturally want it to be homely. Meanwhile, almost every craftsman has his own showroom and offers products and solutions for sale there. In the showroom, the sales funnel reliably guides customers in the direction of the expensive solutions, and already the home has become even more expensive by a few (thousand) euros. So what could be an alternative to the real estate cost trap for investors? Immo shares!

    Stocks like Vonovia have around 400,000 apartments in their portfolio and manage them. Thanks to regular rental income, dividends also bubble up for investors. On April 29, the Annual General Meeting will decide on the distribution for 2021. The figure in question is 1.66 per dividend-bearing share. Therefore, the dividend yield is around 3.8% - a solid figure given the low interest rates. Because of inflation at around 7%, the dividend is not enough for a real return. Investors must hope for price gains. But the share is stuck in a downtrend: it has fallen by around 18% since a year ago - so Vonovia's share is no alternative to concrete gold.

    Hong Lai Huat: Where real estate still offers margins

    The chances are possibly better with the real estate developer Hong Lai Huat from Singapore. The Company expanded from its home market into Cambodia years ago. According to rating agency Fitch, the emerging country in Southeast Asia offers 4.7% growth in 2022. That is partly because 90% of people in Cambodia are already vaccinated. Hong Lai Huat has already completed a project with D'Seaview that includes 737 residential units and rows of stores. The apartments are mostly sold and have attracted Cambodians as well as foreigners. In an interview, Executive Director Dylan Hong explains, among other things, which target groups Hong Lai Huat is focusing on.

    In addition to D'Seaview, the Company is planning further residential projects and emphasizes that it now has a well-rehearsed team for all aspects of real estate projects in Cambodia. "Our coworkers on-site reported, however, first and foremost that they understood during the selling of the dwellings even more strongly, how the market functions and which requirements customers have," explains Ong. In addition to residential projects, the Company has launched the Agri Hub, a gigantic agricultural and industrial project covering an area of 100,000,000 square meters, just an hour's drive from Phnom Penh. Here, the Company plans to implement fish farms with solar roofs, locate light industry and provide housing. "We intend to develop the Agri Hub through joint ventures or the sale or lease of land, which will provide the Group with several diversified income streams," Ong explains. Hong Lai Huat has already entered into a joint venture with a commodity company in this regard, but it has yet to be approved. With Hong Lai Huat more than doubling its revenue in 2021 and business picking up in Cambodia, the stock could also offer prospects. While the dividend of SGD 0.002 per share is low, the payout shows where the Company is headed.

    HeidelbergCement: How sustainable is the share?

    When real estate prices rise, construction projects also become more popular. The most important building material is still concrete. But the material has fallen into disrepute because of its high energy requirements. More and more technologies are relying on natural materials or carbon fibers. Some components even come from 3D printers and are arranged so that their shape resembles models from nature, such as snail shells. But this is (still) a vision of the future. Concrete remains the essential building material. HeidelbergCement recently announced its intention to raise its dividend. As the share price falls, the dividend yield rises and has now reached a value of more than 5%. However, with the share price down 19% in the past three months alone, the stock remains a hot commodity.


    The boom in the real estate market seems to be over for first-tier real estate stocks. Although the payouts at Vonovia or HeidelbergCement are good, the shares are going into reverse. An alternative for speculative investors could be Hong Lai Huat. The Company operates in a growth market where there are still margins to be made, and the competition is manageable. Although the share prices have been moving sideways in recent months and years, the latest figures give cause for hope.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author



    Related comments:

    Commented by André Will-Laudien on May 25th, 2023 | 07:10 CEST

    Is national bankruptcy looming, or is the US debt ceiling a cinch? Deutsche Bank, Tocvan Ventures, PayPal - Financial system under tension!

    • Mining
    • Gold
    • Silver
    • Banking
    • Software

    Once again, the so-called "debt ceiling" in the US has been reached. Consequently, reports about the US financial system are filling the global headlines, with insolvency being painted on the wall. Meanwhile, it is common knowledge that the US has been printing money for a good three decades because its budget is chronically in deficit. Unfortunately, however, the House of Representatives and the Senate have approved raising the debt ceiling conditional on a number of demands that cannot be easily met. The financial markets are visibly trembling. However, seasoned participants know that this debt limit has been raised 78 times since 1960, so why should it fail on the 79th occasion? Is it all just a show? We take a closer look.

    Read

    Commented by Fabian Lorenz on May 24th, 2023 | 08:10 CEST

    IPO Price driver: ThyssenKrupp, Volkswagen, Desert Gold

    • Mining
    • Gold
    • Electromobility
    • IPO

    In an IPO, it is not only the newcomer to the stock market that is interesting for investors. A parent company often benefits - e.g. Volkswagen or Mercedes-Benz - when the subsidiary becomes fully or partially independent. Shareholders of ThyssenKrupp are currently hoping for a share price driver. Thus, the IPO of the hydrogen subsidiary nucera. However, analysts are skeptical. Yet, an initial public offering can also pay off for the peer group when investors take a closer look at the industry again. Desert Gold could benefit from this. The neighbour of the gold explorer Allied Gold Corp wants to go public in London. Desert Gold should also benefit from this and help the share to break out. Within the VW Group, the Porsche share has outperformed its parent company since the IPO. Analysts warn: Will Tesla and BYD leave Volkswagen behind?

    Read

    Commented by Nico Popp on May 24th, 2023 | 07:55 CEST

    Penny stocks without risk? Nikola Corporation, Steinhoff, Orestone Mining

    • Mining
    • Gold
    • Silver
    • Electromobility
    • Pennystocks

    They have always held great appeal for investors: Penny stocks. Whenever shares are trading below one euro, gamblers pounce on them. But why is that? And are all penny stocks speculative? We explain the phenomenon of penny stocks using three stocks as examples. This much can already be revealed: They range from speculative to promising. Nevertheless, investors should keep their hands off one share.

    Read