Cebu Landmasters [CLI] H1 reservation sales up 14% year-on-year

VisMin real estate developer Cebu Landmasters [CLI 3.75 1.35%] guided that Q2/21 and H1/21 earnings were both well above the same periods last year in terms of reservation sales.

CLI said that its performance was “boosted by sustained housing demand” in Visayas and Mindanao, where CLI converted over 75% of its sales in the first half of the year. CLI also said that it has started to develop higher-end units in anticipation of what it calls the “post pandemic boom” in VisMin, a boom which CLI believes it has tested for and found based on the sales returns that it experienced selling a higher-end project in April/May/June of this year.

The company said that it was on-track to achieve its 15-20% growth target for FY21.

MB BOTTOM-LINE 

This developer is focused in all the right areas and checks an awful lot of boxes for me personally as an investor.

Positioned for non-Luzon explosive growth? Check. Building mid-market and near-luxury units? Check. Respected regional developer with a proven track record? Check. Management team that is open and honest with progress and plans? Check. I like CLI and have for years, but it’s still weird to me how much bankers like CLI.

There are people at BPI Cap and BDO Cap that just really like this company. Keep in mind, though, that these bankers are not infatuated with the stock per se, or with its current price; they’re interested in the prospects of the company’s model based on the company’s performance, its financial statements, and its management team. So like all the companies and stocks that I talk about, CLI might not be the right investment for you, your situation, or your particular investment strategy.

I’m not here saying that CLI is a good deal at its current price (or a bad deal). I’m just saying that my impressions of the company that I’ve formed over the past couple of years are echoed by some that I talk to in the investment banking world, and that I think everything I know about CLI makes me optimistic about how the company will fare this year and going forward through the pandemic and the eventual recovery. One thing that I will be interested to watch is how CLI performs as it increases the size and scope of its headline projects. It’s clearly starting to take bigger bites, but we won’t know for a few quarters how well the company operates at this scale.

My hope is that the management team’s magic continues, but you never know.

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