Playmates Holdings (Hong Kong: 0635) didn’t report anything material during the quarter, though it did report poor Q1 results for the company’s majority-owned toy business (Playmates Toys). While those results weren’t inspiring for the period, we modestly value that portion of the business at a small premium to net working capital.

The holding company’s vast real estate holdings represent more than 80% of the value we ascribe to the holding company.

What is particularly noteworthy is the company’s recent share repurchases. After an aggressive period of repurchase activity, the company has purchased nearly 4% of the shares outstanding since January 1, 2017. Given the large family ownership, this approximates 8% of the float. While Playmates Holdings has been repurchasing shares during the last few years, this commitment is the largest to date. Playmates Toys has also begun repurchasing shares, though in smaller quantities.

The holding company shares remain at less than 80% of our conservatively appraised value, and 40% of tangible book value (which marks property holdings to market). Inclusive of buybacks, our appraised value of the shares grew 13.5% in 2016. We expect that the share repurchases and progress at the real estate holdings will lead to similar if not greater growth this year, resulting in a current share price that represents less than 70% of 2017 year-end value.

This post has been excerpted from a letter to partners of Boyles Asset Management.