Friday, 28 March 2014

Malton - Mounting the Mega Artwork

The market sentiment had seemingly started to recover after all the dramatic event from a Russian standoff with the Ukraine, China's shadow banking and our local aviation disaster with the missing of MH370 which had been concluded as crashed into the southern part of the Indian Ocean. My deepest condolences to the family member's of the victims.

I believe that the market is improving with more participation from the foreign fund. The KLCI had broke off from it's consolidation stage of 1830 and penetrate to 1840 as sentiment regain it's positive charge again. While a lot of measure had been implemented by the government as a cooling off measure in the property market, I would continue to believe that property company with strategic projects and demand will continue to break forward.

One of them that doesn't walk away from this criteria is definitely Malton Berhad.

Malton had been trading in a rather lowly in the past 2 years as they are awaiting for the best moment to earmark their catalyst project into the Klang Valley. With Datuk Desmond Lim as the executive chairman for Malton, his name carries a heavyweight title in the property market with the success of Pavilion in Bukit Bintang.

The success of Pavilion had encourage Datuk Desmond to build a even greater mega artwork in bukit jalil, dubbed Pavilion 2, which had been attractively looking at a GDV of more than RM 3.9b in which Malton will be entitled for 82% (Approx RM3.2b) of the GDV in a JV effort with HoHup.

Let's have a quick technical glance on Malton

Malton had seen a 5 months consolidation mostly at the range withint RM 0.85 to RM 1.00. Malton had seen saturation at this level and will be looking set challenge above RM 1.00 with a greater volume in the coming days as I anticipate a daily transaction of more than 15m of shares transacted over the counter.

Delivering the Mega Artwork
Probably, you might want to know what kind of mega artwork will Malton be undertaking. Let's have a quick look on the whole list.

- Nova Saujana at Subang Jaya, 386 units of lifestyle residences and retail lots on 3.17 acres freehold land along Jalan Lapangan Terbang Subang.
- SK One Residence at Sri Kembangan with a GDV of more than RM200m
- Ukay Spring at Ukay Perdana, RM 600m GDV with Superlink, Semi D and Zero Lot Bungalow on 56 acres of land
- Amaya Maluri at Taman Maluri, RM 215 GDV projects with two 19 storey blocks with total of 399 units serviced apartment
- Pavilion 2 (Bukit Jalil City) with a GDV of RM 3.9b and shopping mall worth RM 3.5b with Phase 1 - 3 & 5 storey retail shop office, Phase 2 -Luxury Highrise Park Residence, Phase 3 - Regional shopping mall, Phase 4 - Hotel or Corporate Office Tower
- 300 acre Mixed Development in Batu Kawan with GDV of RM 3.88b (beside IKEA Batu Kawan)
- Nova Pantai at Pantai Dalam, 1140 units of serviced apartment and 280 units of affordable apartment for a GDV of RM 800m
- Amaya Duta at Jalan Kuching with 1479 units of serviced apartment and 20 retail lots with RM800m GDV.
- 12 acres Mixed development in Sungai Buloh near Kwasa Damansara
-  9.57 acres of commercial redevelopment in Pusat Bandar Damansara with more than RM2b GDV

With more than RM10b in GDV on hand in Malton, the projects is good enough to keep Malton busy for the next 5 to 7 years as they start to deliver the projects. Malton had been seeing an increase in revenue for 2 cumulative quarter in the 1st half of FYE 2014, with 295.5m in revenue and a sharp increase of EPS at 9.69 cents compared to the previous cumulative quarter at 4.24 cents, a more than 100% jump. NTA continue to increase to RM 1.57 per share.

With 418m shares at a current market cap of RM380m, a skeptical calculation of 10% contribution of RM10b GDV to the earnings of Malton will be spelling out more than RM1b of profit channeling to 418m shares, which is a staggering RM 2.39 EPS. Divide it into 5 years for completion will see an average of RM 0.47 earning per share, and trading at a skeptical PER x8 will be seeing Malton easily be valued at RM 3.76 in the coming term.

Is property market still going strong in the market currently?

The recent launch of SK One Residence from Malton had saw the appetite of the market in prime area still strong despite the cooling measure by the government. The Block A unit had been snapped up like hot cakes with more than 90% sold. SK One Residence, commanding a GDV of more than RM200m will see revenue bursting into the coming quarter result soon once SPA initiated by the purchaser.

Malton, well known for it's development in strategic prime location and quality workmanship will continue to see more demand in their projects as they continue to introduce their outstanding artwork masterpieces.

While Malton had been doing good in their residential projects, Malton biggest catalyst in their corporate should see Pavilion 2 topping it's list as they JV with Hohup in the prime connecting place of Bukit Jalil, Puchong and KL in Bukit Jalil City. Pavilion 2 will see experience mall management, Pavilion bringing another level of lifestyle into Bukit Jalil soon once the mall is ready.

In my opinion, Malton at the current value of RM 0.91 is deemed hugely undervalued at the moment as it is trading at a 42% discount from it's NTA of RM 1.57. And with 1H 2014 EPS of 9.69 cents, trading at PER x10 will look at Malton being valued at RM 0.97 already. I believe Malton will be heading for a bullish run in the coming days, as they challenge above RM 1.00 in a strong manner, while a longer term outlook will see Malton conquering RM 1.50.

Others reference on Malton
Redevelopment of Pusat Bandar Damansara
Pavilion 2 JV with Hohup

Bone's short term TP: RM 1.00

Are you ready to ride the wave? You decide.

Cheers and have a nice day


Friday, 21 March 2014

A&M - Awesome and Majestic

The US market had reacted in a superbly bullish manner after Yellen sticks on to the promised of reducing the quantitative easing by handling a USD 10 billion reduction in the monthly bond purchases. As of now, the DJIA is partying hard with more than +100 as the US economy recovers in a faster pace than expected. I believe this plan will further drive more fund back to the US, hence resulting in a stronger USD in the coming days. While the US market heads for recovery,how will the emerging market react?

Interestingly, I would like to bring to your interest - A&M, known as A&M Realty Bhd (Stock Code 5959). This little known company in the older days will not be staying low profile soon as the harvesting season had finally reached their door step on their prize assets, featuring Carey Island, Jugra, Selangor.

Let's have a quick glance at the technical chart of A&M Realty.
The price had recently saw some activities in January 2014 and consolidated lower for a couples of month after a series of bearish sentiment in the KLSE market. While consolidation had seen saturation at this level, I believe that A&M will be look set to penetrate into a new level to find it's base soon, hence, will be anticipating a great volume to participate in the market.

So probably you might be thinking, what could be so great about A&M prized asset - Carey Island? Carey Island is strategically located at the south of the radiantly busy Port Klang, where Hong Kong mega tycoon Li Ka Shing is part of the owner for the biggest port operator at Port Klang, dubbed Westport.
The current infrastructure development with SKVE (South Klang Valley Expressway) had connected the Kuala Lumpur to Carey Island in a straight drive. Driving westward from Puchong to Carey Island using SKVE will only takes approximately 30 minutes. While NKVE had brought up places like Setia Alam in Shah Alam, the connectivity of SKVE straight to Carey Island is liken to a golden bridge in bringing up the value of the land there.

A&M is sitting on a massive 2000 acres at Carey Island which was bought more than 30 years ago at a price of less than RM1 per square feet, and had not been revalued for years since they last bought. Analyst would suggest that each square feet to be worth around RM50, which will put up a staggering figure of RM 4.2b worth of land now. With 365m shares issued, the land itself will be knocking at RM11.50 per share. Skeptically slashing it by 50% still put the figure at RM5.75, which is a 82% discount towards it's current share price.

The group is not shy of some other assets as they are currently sitting on
- Cash and Cash Equivalents of RM93.6m (RM 0.26 per share)
- Bukit Kemuning, Shah Alam, 20 acres
- Morib, 180 acres
- Mont' Kiara, 3 acres

Driven by the Datuk Ng Thian Hock and his family, the group had a diversified business activities ranging from Oil Palm Plantation, Hotel Management and Automotive Spare Parts. The Ng family owned more than 70% of shareholding in A&M Realty, which is also the major owner in HIL  Industry Berhad, a cash rich company with quite a number of property and land.

The current financial statement in A&M will see an increase in the EPS with FYE 2013 at 8.79 cents behind a revenue of RM141.8m as NTA stood at RM 1.50 with most of the lands and property not valued as long as 30 years back. The company should be announcing a dividend of 1.5 cents a share in the coming days.

A&M will be looking set to focus on Amverton Cove with a RM10 GDV over 15 years as well as Amverton Park in Bukit Kemuning with a GDV of RM315m, a figure big enough to be able to keep the company busy. As of current, Amverton Cove Golf and Islan Resort is completed.

In my opinion, A&M will be very prospective in the coming near term with more superb surprises to come as Datuk Ng and the family deliver. Datuk Ng is on the process of injecting a 145 acre land in Sungai Buloh through Unik Sejati Sdn Bhd, which will further boost the value of the company with the current hot development in Sungai Buloh. To add sugar on honey, there are major plans from Hong Kong tycoon Li Ka Shing on developing the northern region of Carey Island for it's business expansion.

A&M will definitely a worthwhile stock for a long term investment based on
- 2000 acres of land in Carey Island, with a land valued of more than RM2b (based on RM5.75 psf), and Amverton Cove which is a notable RM10b GDV for 15 years.
- Amverton Park at Bukit Kemuning, 20 acres with current GDV of RM315m
- Mont' Kiara, 3 acres.
- RM93.6m cash and cash equivalents
- Datuk Ng Thian Hock asset injection - 145 acre of Sungai Buloh land
- Hong Kong Tycoon, Li Ka Shing business expansion planning at Carey Island

A&M should be look set to challenge RM 1.20 in a short term, and a longer tenure prospect will see the stock driving up to RM 1.50 to RM 1.70 in the coming days.

Joining the game of leaving out? You decide.

Bone's short term TP: RM 1.20

Cheers and have a nice day.


Wednesday, 19 March 2014

Trop - A Tropical Thunder

Tropicana Corporation Bhd (TRCB), a major developer in Iskandar Malaysia.

With a land bank of 2000 acres in prime locations in the likes of Iskandar Malaysia and Klang Valley and a PER of 3.56 times compared to the average PER of 8x of its peers, Tropicana Corporation Bhd has been a laggard playing catch-up with its peers.

The massive RM2.607bil projects to be launched quarter by quarter this year will effectively unlock TRCB from its value trap and lift its share price.

Project Value (Mil)

Casa Damansara 3

Tropicana Danga Bay
Iskandar Malaysia

Penang World City

Tropicana Danga Cove
Iskandar Malaysia

Tropicana Aman
(Previously known as Tropicana Canal City)
Shah Alam

Tropicana Heights

Tropicana City Centre
Johor Bahru


Trop’s near term profit will be buoyed by the recent roll out of Tropicana Macalister in Penang and Tropicana Heights in Kajang. The total amount of units launched from the two projects had a combined value of RM566mil. A 42-storey tower of Bora Residences at Tropicana Danga Bay has also seen it official launch after the soft launch in February 2014. 

With a strong massive database, the previous internal launching of Tropicana Garden had saw all the units in phase 1 priced at around RM800+ per square feet being taken up like hot cakes, where the public doesn't even stand a chance in the mad grab.

While you are having the feeling that many people around you are having the feeling of the current property launch as being expensive and unaffordable, the take up rate in the new property launches doesn't looks set to reflect it as quite a number of property launches are still grabbed up like hot cakes with a lot of creative rebate/discount plan from the developer in assisting the purchaser to purchase the property and even financing the interest during construction period.

With another huge flagship township development is Tropicana Aman, boasting a 1,172-acretownship development with estimated GDV up to RM20bil for 15 to 20 years, Tropicana Aman,which is to be launched in year-end, is expected to be highly profitable as the developer acquired the land from PermodalanNegeri Selangor Bhd (PNSB), the development arm of the Selangor state government, at a bargain price of RM25.41 psf.

The land in yellow is Tropicana Aman. The land is strategically situated next to IJM’s Bandar Rimbayu and near Kota Kemuning and accessible by major expressways.

Let's have a quick look at the technical chart of Tropicana.
Tropicana is seemingly looking to put the value trap behind and poised to see its share price climb to reflect its true value as we can see more huge volume are showing interest in the stock after sliding off from a peak of RM 2.20 back then at middle of May 2013. I believe that the consolidation had see a saturation and will be looking set to see new trend in the making soon. Subsequently, I am anticipating more volume to participate in the coming few days as the prices of the stock maintain at this range of RM 1.30 to RM 1.40.

Trop's performance had continue to showcase a stronger revenue in FYE 2013, with an EPS of 34.31 cents backed by RM1.475b in revenue. Currently, the NTA is RM 2.32, which is around 40% discount from it's NTA that is full with strategic land banks in the Klang Valley and Iskandar region. Based on a skeptical PER x8 at the back of 34 cents as EPS, Trop could be easily sitting at RM 2.72, which further see the current price of below RM 1.40 as being a huge discount.

In my opinion, with such huge projects in the line, good and reputable brand name, consistent result and prudent management team, Trop should be look set in thundering forward in the coming days as they are greatly under valued. Recent interest in the stock will be going to reflect Trop's higher value soon. A short term outlook will see Trop challenging RM 1.50, while a longer term outlook will put Trop above RM 1.90.

Bone's short term TP: RM 1.50

Friday, 14 March 2014

Lbicap - Focusing Towards Hospitality

The 2014 had been quite a bumpy ride since January 2014, where the market had been burdened by the rising concern on global debts, country debt ceiling and obligation, the Feds measurement in the quantitative easing with the current being the standoff between Russia and Ukraine over Crimea and the speculation of the tapering from the Feds in the coming March meeting.

On a volatile market, it had been a good time to do some bargain hunting as most of the stocks had got battered lower as the shareholder starts to shift their equities out to hold cash until the outlook got a little stable.

However, despite the sentiment, LBICAP had somehow captured my attention as a niche market developer that had been doing quite well in a slow and steady manner.

Let's have a look at LBICAP recent price chart.

The recent purchasing streak by Dato Ng Tiong Seng had fired the stock upwards towards reaching RM 1.70. Till date, NG TIONG SENG CORPORATION SDN BHD had accumulated 62.12% (approx 40m) of LBICAP shares.

A brief history on Lbicap

LBI Capital Berhad is an investment holding company where its subsidiary and associated companies are principally engaged in property development, rubber molded products manufacturing. LBI main contribution is attributable from its property division. While the market had been in rough water at the moment, I will still remain positive on LBI Capital Berhad due to its past solid track of record in property development.

LBI Capital Berhad had undertaken more than RM470m in GDV for the past 7 years, of which successful projects includes:

-      - Taipan 1, located at Ara Damansara with a GDV of RM78m
-          - Taipan 2, located at Ara Damansara with a GDV of RM134m
-          - Putrawalk, located at Taman Pinggiran Putra with a GDV of RM73m
-          - Le Putra Avenue, located at Taman Pinggiran Putra with a GDV of RM58m
-          - Taman Pinggiran Permata Semi D, located at Sri Gombak with a GDV of RM23m
-          - Puncak Lagenda, located at Johor Baru with a GDV of RM62m

All the projects had been successfully sold off and smoothly delivered within expected time frame.

The current project and future project that LBI Capital is looking to delivered includes:
       - Desa Saujana, located at Saujana Putra with a GDV of more than RM60m
-          - Desa Saujana II, townhouse, located at Saujana Putra
-          - i-HUB at Puchong, GDV of more than RM150m
-          - Gohtong Jaya, Genting Highland, JV with LBS Bina Group Bhd for 3 blocks of service apartment and 1 hotel block for a GDV of RM370m.

Under the management of Dato Jeffrey Ng, the company had been doing steadily despite being slow. Dato Jeffrey approach which doesn't want to over stretch the company too much had been focusing in delivering a projects in a complete and good manner before taking up another projects. The company had been doing well with well to do dividend back to the shareholders, with the latest dividend being 5 cents.

Their latest FYE 2013 had reflected a rather stronger display of EPS compared to last term with an increase of 40% to 15.3 cents EPS, while NTA increased to RM 1.42.

Currently, Lbicap is sitting on some prime land bank at
- Telok Panglima Garang, Kuala Langat, 10 acres
- Signal Hill, Kota Kinabalu, Sabah, 3.6 acre
- Batu Feringghi, Penang, 4.5 acre
- Tebrau, Johor, 1 acre

Changing Towards Hospitaility
Dato Jeffrey is a person that had a vision and is a good planner. As Dato Jeffrey understand that Lbicap is a niche market property developer, hence the concern of sustainability in the long run had been always in his mind. Despite building great property and selling them off for a one off business transaction, Dato Jeffrey is transforming Lbicap towards building and keeping the building for a recurring passive income that will be very much rewarding for the corporate in the long run.

His vision is in line with his action as we can see that Dato Jeffrey is going to develop the land in Batu Ferringghi into a possible mixed development with boutique hotel in the coming days. They will also be looking to development service residence suites in Sabah in the coming days.

Currently, Lbicap is in a joint venture with LBS Bina in developing the land in Gohtong Jaya with a GDV of RM 370m, in which Lbicap will be entitled for RM 55.5m of the GDV with a cost of acquisition of the land at RM 5.5m some years back. The RM 55.5m GDV will represent a RM0.84 gain for each share in Lbicap with approx 65.88m shares issued. With Genting Highland upgrading their facilities, Gohtong Jaya, a 30minutes drive to Kuala Lumpur will be a good spot for holiday makers wanting to breath some fresh air over the week.

In my opinion, I believe Dato Jeffrey move in creating sustainable income for Lbicap in the future is leading the company very well. Under his leadership, I believe that Lbicap will be able to stand firm on their ground in the future and might emerge as a REIT player in the future.

Given the recent purchased by Dato Jeffrey Ng towards RM 1.68 and the proposed private placement, I believe that Lbicap will be looking for greater progress in the coming days. I am looking Lbicap to challenge above RM 2.00 in the coming future, while a short term outlook will see Lbicap at RM 1.60 to RM 1.70 after seeing great prospect and greater leadership under Dato Jeffrey Ng.

Bone's short term TP: RM 1.65

Cheers and have a nice day