Dated 2006
Market punters believe there maybe another wave coming as more 9MP-SJER contracts are announced despite last week disappointed Johor Infra projects announcement.
Re-Valuation Play …
It carrier 1000 acres of leasehold land in its books, value at 13.40psf, which is located in Johor. A recent transaction of commercial land in Johor Baru was done at RM110 psf. It also points that the statement is asking for RM380 million or RM221 psf from the federal government for 16ha of land in Bkt Chagar, Johor Baru. Fronting the sea allows Tebrau to price whatever development it has on the land at a premium. Tebrau is reviewing its master plan and will shift its focus from medium-cost residential development to high end products.
With projects like the Eastern Dispersal Link and Johor MRT creating accessibility, land value will surely appreciate over the next few years.
At 60 sen, Tebrau is trading at 0.8 times its NTA of 71 sen. If land were revalued at RM110 psf, its share price is target at RM7.06 per share.
Dated Feb 2007
A special purpose vehicle called Kota Selat Tebrau will be established to undertake the development of the Danga Bay project in the water front of the IDR.
Kota Selat Tebrau’s Shareholdings …
Khazanah Nasional Bhd will be taking a lead role in the SPV with Kumpulan Prasarana Rakyat Johor (KPRJ) and Datuk Lim Kang Hoo, a developer who controls the company with the development rights to Danga Bay .
The shareholding structure is still not firmed up, but Khazanah will invest through South Johor Corp, which will also have the EPF as a shareholder.
Lim will be injecting key portions of his Danga Bay property development project into the SPV. Sources say the transaction is valued to RM350 million and in return for injecting the assets, Lim will get a 20% stake in Kota Selat Tebrau.
Components of Danga Bay …
Assuming that all of Danga Bay ’s 1380 acres are injected into the SPV, this would translate into RM5.74 per sq ft. However, sources say only the prime area of Danga Bay that is being injected into the SPV. The prime portion of Danga Bay comprises 1000 acres of an integrated mix residential, recreational and commercial waterfront properties that face Singapore . If it is this parcel that is sold, then the price psf will be around RM8.
Aside from Danga Bay , other tracts close to it will also be injected into the SPV. Sources say this includes land owned by Khazanah as well as Tebrau Teguh and its parent company KPRJ. Tebrau Teguh and KPRJ own around 10000 acres each, all within a 10km radius of the Causeway.
Gross Development Value …
Kota Selat Tebrau will undertake a massive development of these parcels, including Danga Bay . The indications are that the gross development value of Kota Selat Tebrau will hit RM4 billion stretching over five years.
Highway …
A 40km coastal highway (linking Nusajaya-Danga Bay , the Immigration centres and Quarantine complex and Pasir Gudang highway) may also come under the purview oof Kota Selat Tebrau. It is learnt that the coastal highway job will go to a privately held company within the UEM Group.
Dated July 2007
It is currently bidding for construction projects worth over RM1bil under the Ninth Malaysian Plan (9MP) and in the Iskandar Development Region (IDR).
It is currently bidding for construction projects worth over RM1bil under the Ninth Malaysian Plan (9MP) and in the Iskandar Development Region (IDR).
All the tendered projects were in Johor and the company was confident of securing at least 30% worth of the contracts. They included the RM900mil river-cleaning project and the new Permas-Pasir Gudang coastal highway.
The river-cleaning project involved three rivers in the Johor Baru district – Skudai, Segget and Tebrau – which were badly polluted. The RM12bil allocation from the Government to improve the infrastructure in IDR over the next five years would also offer many opportunities.
Tebrau Teguh still had 1,200ha of river-fronting undeveloped land within the IDR and it would fully utilise the property to benefit from the growth area.
Financial Results …
For the financial year ended Dec 31, 2006 (FY06), Tebrau Teguh recorded pre-tax profit of RM1.43mil on revenue of RM64.49mil compared with RM660,000 and RM34.24mil respectively in FY05.
Dated 2007
The Johor state government is compulsorily acquiring a 4.62ha vacant parcel of land in Plentong, Johor Bahru, from Tebrau Teguh Bhd subsidiary Bayou Bay Development Sdn Bhd (BBDSB) for RM17.77 million.
BBDSB had received a notice from the Johor Bahru land administrator for the compulsory acquisition and had accepted the offer with an objection on the valuation of the land. BBDSB had submitted a valuation report prepared by a registered valuer to the land administrator to support its claim for higher compensation.
The disposal to the state would result in earnings of about RM9.04 million for the group and accordingly would increase its earnings per share and net tangible asset per share by 1.35 sen.
Crescendo Corp Bhd
The river-cleaning project involved three rivers in the Johor Baru district – Skudai, Segget and Tebrau – which were badly polluted. The RM12bil allocation from the Government to improve the infrastructure in IDR over the next five years would also offer many opportunities.
Tebrau Teguh still had 1,200ha of river-fronting undeveloped land within the IDR and it would fully utilise the property to benefit from the growth area.
Financial Results …
For the financial year ended Dec 31, 2006 (FY06), Tebrau Teguh recorded pre-tax profit of RM1.43mil on revenue of RM64.49mil compared with RM660,000 and RM34.24mil respectively in FY05.
Dated 2007
The Johor state government is compulsorily acquiring a 4.62ha vacant parcel of land in Plentong, Johor Bahru, from Tebrau Teguh Bhd subsidiary Bayou Bay Development Sdn Bhd (BBDSB) for RM17.77 million.
BBDSB had received a notice from the Johor Bahru land administrator for the compulsory acquisition and had accepted the offer with an objection on the valuation of the land. BBDSB had submitted a valuation report prepared by a registered valuer to the land administrator to support its claim for higher compensation.
The disposal to the state would result in earnings of about RM9.04 million for the group and accordingly would increase its earnings per share and net tangible asset per share by 1.35 sen.
Crescendo Corp Bhd
Dated Mar 2007
Although Crescendo Corp Bhd has landbank within the Iskandar Development Region (IDR), its shares are laggards when the IDR play is concerned. Its share price had appreciated only about 9.7% whereas counters like Tebrau Teguh Bhd and Mulpha International Bhd, which also have landbank within IDR, had soared 73% and 31% respectively in the same period.
Even before the recent plunge in the stock market, Crescendo shares had only appreciated some 23% while Tebrau surged 129% and Mulpha 55%. This is surprising as the three counters should gain similar merits.
Financial Health …
For the nine months ended Oct 31, 2006, Crescendo made a net profit of RM14.6mil on revenue of RM57.7mil. Earnings per share stood at 10.26 sen.
The company was committed to maintain gross dividend at 7% per share for FY07.
Going forward …
One of the main projects in 2007 will be the Nusa Cemerlang Industrial Park (NCIP), which forms part of Bandar Nusajaya. The NCIP, which covers about 527 acres of gross industrial land, is divided into three major phases and will comprise 353 medium industrial factories when fully developed.
Crescendo, which has already bought 64 acres in the NCIP, has been given the development right to the remaining land with the option to buy over within eight years from Dec 1, 2005.
Construction at the first sub-parcel of the first phase (Phase 1a), consisting 46 factories, had started and was expected to be completed by October. Phase 1a has a gross development value (GDV) of RM74.7mil while the GDV for the whole development is close to RM1bil.
It had anticipated response for Phase 1a to be positive given the attractive incentives for the IDR, coupled with its strategic location. NCIP could cater to medium industries that are supporting the big factories at the Port of Tanjung Pelepas . If the take-up rate for the project is good, our performance in FY08 (financial year ending Jan 31, 2008) should be quite good as well.
The impact of Phase 1a was likely to flow in during the later part of FY08 and FY09, he added.
Crescendo also has substantial landbank in Ulu Tiram, where it is planning to develop its Bandar Cemerlang project and is expected to sustain earnings in the next 12 to 15 years. The project was likely to take off in two years to coincide with the construction of the interchange that would link the mixed development and the Ulu Tiram highway.
Mulpha
Although Crescendo Corp Bhd has landbank within the Iskandar Development Region (IDR), its shares are laggards when the IDR play is concerned. Its share price had appreciated only about 9.7% whereas counters like Tebrau Teguh Bhd and Mulpha International Bhd, which also have landbank within IDR, had soared 73% and 31% respectively in the same period.
Even before the recent plunge in the stock market, Crescendo shares had only appreciated some 23% while Tebrau surged 129% and Mulpha 55%. This is surprising as the three counters should gain similar merits.
Financial Health …
For the nine months ended Oct 31, 2006, Crescendo made a net profit of RM14.6mil on revenue of RM57.7mil. Earnings per share stood at 10.26 sen.
The company was committed to maintain gross dividend at 7% per share for FY07.
Going forward …
One of the main projects in 2007 will be the Nusa Cemerlang Industrial Park (NCIP), which forms part of Bandar Nusajaya. The NCIP, which covers about 527 acres of gross industrial land, is divided into three major phases and will comprise 353 medium industrial factories when fully developed.
Crescendo, which has already bought 64 acres in the NCIP, has been given the development right to the remaining land with the option to buy over within eight years from Dec 1, 2005.
Construction at the first sub-parcel of the first phase (Phase 1a), consisting 46 factories, had started and was expected to be completed by October. Phase 1a has a gross development value (GDV) of RM74.7mil while the GDV for the whole development is close to RM1bil.
It had anticipated response for Phase 1a to be positive given the attractive incentives for the IDR, coupled with its strategic location. NCIP could cater to medium industries that are supporting the big factories at the Port of Tanjung Pelepas . If the take-up rate for the project is good, our performance in FY08 (financial year ending Jan 31, 2008) should be quite good as well.
The impact of Phase 1a was likely to flow in during the later part of FY08 and FY09, he added.
Crescendo also has substantial landbank in Ulu Tiram, where it is planning to develop its Bandar Cemerlang project and is expected to sustain earnings in the next 12 to 15 years. The project was likely to take off in two years to coincide with the construction of the interchange that would link the mixed development and the Ulu Tiram highway.
Mulpha
Dated Dec 2006
Any impact on the SJER means an upside for Mulpha. Development will be accelerated if foreign parties are allowed to invest and develop the area. They want to increase their landbank in this area. Mulpha’s exposure in Johor is through its Leisure Farm Resort, which is slated to be one of Malaysia ’s most prestigious gated resort development. This 1,371-acre free hold high-end development in Gelang Patah is within SJER. The resort includes a 36-hole golf course, a clubhouse and equestrian facilities.
With a gross development value of RM2.08bil, the Leisure Farm project includes 1,200 residential lots, commercial area, hotels and condominiums to be developed over eight years. If RM12.2bil is to be spent on SJER, this could lead to higher land and property prices. Leisure Farm has 700 acres of landbank that has yet to be developed.
Mulpha has been in talks with the government on its landbank expansion, and sources say it is looking at about 1000 acres, more than double its existing landbank.
Mulpha has constantly held talks with the government. They want to be the Damansara of SJER. At RM40 per square feet (psf), their property is already selling well. Even if land prices increases to RM100 psf, this is still cheaper than land in Singapore .
Any impact on the SJER means an upside for Mulpha. Development will be accelerated if foreign parties are allowed to invest and develop the area. They want to increase their landbank in this area. Mulpha’s exposure in Johor is through its Leisure Farm Resort, which is slated to be one of Malaysia ’s most prestigious gated resort development. This 1,371-acre free hold high-end development in Gelang Patah is within SJER. The resort includes a 36-hole golf course, a clubhouse and equestrian facilities.
With a gross development value of RM2.08bil, the Leisure Farm project includes 1,200 residential lots, commercial area, hotels and condominiums to be developed over eight years. If RM12.2bil is to be spent on SJER, this could lead to higher land and property prices. Leisure Farm has 700 acres of landbank that has yet to be developed.
Mulpha has been in talks with the government on its landbank expansion, and sources say it is looking at about 1000 acres, more than double its existing landbank.
Mulpha has constantly held talks with the government. They want to be the Damansara of SJER. At RM40 per square feet (psf), their property is already selling well. Even if land prices increases to RM100 psf, this is still cheaper than land in Singapore .
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