http://klse.i3investor.com/blogs/PublicInvest/51896.jsp

it is public bank report today TP: RM7.22

Daiman Development (Daiman), an experienced Johor-based property player, has been sitting on inexpensive landbank in Johor with good accessibility and freehold land status. Underpinned by the booming Johor property market thanks to the Iskandar Malaysia development, we see deep underlying value in the company as it could be worth at least RM1.5bn or RM7.22 per share. We also see exciting near-term catalysts for the company with the upcoming JV development in Plentong which seeks to replicate the successful Publika project in Johor Bahru as well as the opening of “DoubleTree by Hilton” hotel in July 2014 which is expected to grow its recurring income over the long term.

 A 42-year old property player in Johor. Daiman was founded by the late Dato’ Sri Tay Kia Hong in 1972 with the first property project in Taman Sri Tebrau. Today, the group has completed more than 24,000 residential, commercial and industrial units. Listed in 1992, the Johor property player is currently under the helm of Tay brothers, who collectively own about 51% of Daiman. Property development is the largest earnings contributor in FY13 (June) for the company, accounting for 73% followed by property investment, 18%.

 Sitting on inexpensive land cost. The group owns about 2,965 acres landbank in Johor spanning across Kota Tinggi (2,645 acres), Tebrau (118 acres), Plentong (158.3 acres) and Senai (43.9 acres). The most interesting part is its 103.7-acre golf course land in Plentong, which sits on commercial land status with a book value of RM7.20 psf. There is a huge potential to redevelop and monetize the golf course. Based on our estimation, we believe this piece of land is worth around RM70 psf given its prime land status. In Kota Tinggi, it has about 2,458 acres, which is approved for mixed development, is sitting on book value of RM2 psf. Based on the market value of RM10-RM15 psf, we believe it is worth at least RM1bn. All-in, we think its land bank and properties in Johor stand at market value of not less than RM2bn, which is a far cry as compared to its current market capitalization of RM676m.

 Pro-active effort to monetize land bank and to increase recurring income. Daiman’s 12.3-acre JV with Rainbow Crest (led by Dato Tong Kooi Onn and Dato Allan Lim, both ex-Sunrise top executives) to replicate the Publika concept in Johor Bahru will significantly enhance the value of its golf course land. To reduce reliance on cyclical development earnings, Daiman increased its investment portfolio by acquiring Menara Landmark comprising office building with NLA of 285,000 sq ft, medical suite podium with NLA of 105,000 sq ft and hotel (336 rooms, 4-star) to be run under the ‘Double Tree by Hilton’ brand.

 Solid balance sheet with attractive dividend payout. Daiman’s balance sheet and operating cash flow are healthy. As at 31 Dec 2013, it has a net cash & S-T liquid investments of RM169m or 80 sen/share. The group has been paying out gross dividend with a minimum of 10sen p.a. (40%-70% payout) in the past 5 years, which translate into 3.1%-3.7% dividend yield

Pls see the huge cash pile they have. This company is cash-rich. oso pay very decent dividend

Public Investment Research seems like quite power despite they are so new in the research... They can move the share price so much. Power~~~

MPHB also a very good company and similar story with huge plot of land located in Pengerang

Any counter that have similar story like this ? With deep undervalued book value and huge plot of land in Klang Valley ..pLs recommend ? It could be another SAB, Brem and Daiman