The below is an extract from Hong Leong's report:

RNAV and valuation:
We value LBS based on a SOP approach, which is a combination of: (1) The RNAV of the equity portion of its Malaysian projects; (2) The market value of its 15.95% stake in ZHIG; (3) Its 60% stake in ZIC, based on the previous actual transaction price for its 197 acres of development land sold to ZHIG, which works out to a valuation of RM847m.

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Here is my take:

LBS has a 60% stake of another 264acre land in Zhuhai that has yet to be sold. HLiB used the previous transacted price of RM123/sqft to value it. But land prices have shot up since 2013 and will go even higher once the Macau-Hong Kong-Zhuhai bridge is completed in 2016. But base on the average transacted price in 2013 and 2014 of RM683/sqft, this 158.4acre of land is worth RM4.71B. Divided by the number of LBS shares (fully diluted, say 600m), you will arrive at RM7.85/share.

The below is an extract from Hong Leong's report:

RNAV and valuation:
We value LBS based on a SOP approach, which is a combination of: (1) The RNAV of the equity portion of its Malaysian projects; (2) The market value of its 15.95% stake in ZHIG; (3) Its 60% stake in ZIC, based on the previous actual transaction price for its 197 acres of development land sold to ZHIG, which works out to a valuation of RM847m.

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Here is my take:

LBS has a 60% stake of another 264acre land in Zhuhai that has yet to be sold. HLiB used the previous transacted price of RM123/sqft to value it. But land prices have shot up since 2013 and will go even higher once the Macau-Hong Kong-Zhuhai bridge is completed in 2016. But base on the average transacted price in 2013 and 2014 of RM683/sqft, this 158.4acre of land is worth RM4.71B. Divided by the number of LBS shares (fully diluted, say 600m), you will arrive at RM7.85/share.

If all the land is revalued to the current market price, it shows a value > RM9/share.

HLIB: LBS Bina on solid footing

HONG Leong Investment Bank (HLIB) Research sees LBS Bina Group Bhd on a solid footing domestically as the property developer sits on an undeveloped landbank of some 728.4ha that could yield RM18.2 billion in future gross domestic value.

The research firm said LBS Bina is likely to monetise its Chinese assets worth RM970 million at the market value to acquire more land in Malaysia. The company wants to beef up its landbank reserves that are currently sufficient to last another 10 years.

“After many years of delay, LBS Bina successfully struck a deal to monetise its 60 per cent stake in two plots of land in Zhuhai, China. This is a landmark moment in the group’s history as it allowed LBS Bina to finally monetise its valuable landbank in China, which we expect to fund its footprint in Malaysia,” HLIB Research said in a report yesterday.

The two plots of land in Zhuhai include the 79.7ha of development land and the 136.7ha of Lakewood Golf Club. The lands are worth HK$1.65 billion (RM681.81 million).

LBS Bina is committed to share the proceeds of the Zhuhai land sale with a series of special dividends spread across five years.

The company, founded by Datuk Seri Lim Bock Seng in 1960s, had declared the first eight sen special dividend on August 20 last year and is scheduled to cumulatively pay out another 24 sen of special dividends over the next four years, which translates to a cumulative 14 per cent yield.

The company also has a regular dividend payout of 30 per cent.

“We estimate the combined regular and special dividends to translate into an overall dividend yield of 5.9 per cent and 7.6 per cent, respectively, which is an attractive proposition for investors,” HLIB Research said.

The research firm has a “neutral” call on LBS Bina stock with a target price of RM2.41.

Symphony Life’s plan for RM8b township held back

SHAH ALAM: Symphony Life Bhd’s plan to develop an RM8 billion township in Sungai Long, within Selangor’s Kajang district, is being held back by potential land acquisition by the Selangor government.

According to executive chairman Tan Sri Azman Yahya (pic), the delay was due to the state government’s plan to acquire part of the land for the Langat 2 water treatment plant project and a proposed new highway.

The group’s preliminary projection shows that the 420 acres (170ha) Sungai Long township may carry a total gross development value (GDV) of RM8 billion. The land is deemed a jewel for the mid-sized developer, which has a market capitalisation of RM368.5 million at its current share price of RM1.20.

“The amount of land [in Sg Long] that will be acquired has yet to be finalised. We hope we could get a certainty by the end of the year,” said Azman after the company’s annual general meeting yesterday. Azman owns 22.24% of Symphony Life — formerly Bolton Bhd — as at July 18
this year.

Commenting on the medium-term outlook, Azman was confident the market would return to a steady pace next year, given that the central bank and the government have taken measures to ensure a stable and sustainable property market.

“Although the market had seen signs of softening over the past 12 months, we launched projects with total GDV of RM2.5 billion with excellent take-up rates,”he added.

On the longer term, Azman said the group has projects with an estimated total GDV of almost RM4 billion to be launched within the next five to seven years. Symphony Life’s current or soon-to-be launched projects include Star Residences in KLCC, Desiran Bayu in Wangsa Maju, TWY Mont Kiara, The Elevia Residence in Puchong, Tijani Signal Hill in Sabah and Tijani @ Raja Dewa in Kota Baru.

Meanwhile, the group recently re-planned its Wharf Shopping Mall in Taman Tasik Prima in Puchong to incorporate the concept of a neighbourhood mall. “We are currently in the planning stages and we hope to start the construction of the mall early next year,” said Azman, adding that the mall is expected to be completed by the second quarter of 2017.

In addition, Symphony Life is also looking to redevelop The Langkawi Fair Shopping Mall, by adding two blocks of apartments to cater to affluent locals and foreigners wanting to own a property in Langkawi.

Symphony Life posted a net profit of RM11.01 million for the first quarter ended June 30, 2014, down from RM11.39 million in the corresponding period last year. Revenue, also fell to RM82.73 million from RM98.35 million a year ago.

From HLeBroking: A unique RNAV play

We view LBS as a unique RNAV story offering exposure to both Malaysia and China. Domestically, current valuations suggest investors would be getting its valuable 1,800 acre landbank at a substantial discount, whilst enjoying free exposure to its ZIC Land and 15.95% stake in ZHIG.

Investors can also expect a further 24.0 sen of special dividends, on top of the regular 30% dividend payout, translating into an attractive 6-8% dividend yield.

We see good upside to LBS’ Chinese assets and believe it will eventually monetise these assets to acquire more land in Malaysia , to expand its already substantial 1,800 acre footprint.

Applying a 50% discount to our SOP valuation, our TP is RM2.41.

Any positive news will be catalyst to push Symlife past both resistances.

New shareholder means something is brewing. And he is well connected.

AZRB worth double its value: CIMB Research

KUALA LUMPUR: CIMB Equities Research estimates Ahmad Zaki Resources Bhd (AZRB), with its last traded price at 72 sen, is worth double its value today.

“The share price is a big laggard when compared to the share prices of other small-cap contractors or other small-cap stocks in general, which have surged or even doubled year-to-date,” it said on Monday.

CIMB Research said for AZRB, it applied a 50% discount to AZRB's RNAV/share of RM2.95.

“The 50% discount is fair in our view and it is higher than the 10%-40% we apply to the construction stocks under our coverage. We arrive at an implied value of RM1.48 a share, which implies an upside of 103%,” it said.

CIMB Research said based on its estimates, the stock is worth double its value. The share price is a big laggard when compared to the share prices of other small-cap contractors or other small-cap stocks in general, which have surged or even doubled YTD.

“AZRB's business structure is similar to the likes of Gamuda and IJM Corp i.e. an order book-driven construction earnings, backed by stable and predictable earnings from property development, with more lucrative margins coming from other segments like its oil & gas bunkering facilities. There are also inherent values from its property and plantation land banks.

“Construction and oil & gas are the two major profit generators for AZRB, with contributions coming in at an equal split,” said the research house.

Have patience. You will be rewarded.

This morning it has a 93% buy rate. Some funds are possibly picking this up.

http://www.thestar.com.my/Business/Business-News/2014/09/04/Malton-a-regional-top-pick/

Malton top regional pick in property sector

PETALING JAYA: The Malaysian property sector will remain “overweight” for the third quarter of the year with key drivers being stronger gross-domestic-product (GDP) growth for 2014 and upcoming infrastructure developments, said RHB Research.

Its analysts said the third key driver was the front-loading of big-ticket items ahead of the implementation of the 6% goods and services tax (GST) in April 2015.

Maintaining their sector rating, the analysts said concerns of a rate hike should have already been discounted by the market.

“In line with our expectations, property sales generally recovered from the first quarter. The weak second-quarter results were not a surprise as developers typically report stronger earnings in the second half,” they said in a regional real estate research report yesterday.

RHB’s analysts said their regional key stock ideas were Malton Bhd and Indonesia’s Modernland.

They said Malton would enter a new phase of earnings growth, with its financial year 2015 (FY15) earnings set to be underpinned by RM470mil unbilled sales and RM410mil construction contract value.

Adding that Malton had a compelling re-rating angle, they said that its Bukit Jalil City project would be a major turning point while new launches this year would drive FY16 earnings.

I think next quarter's results is key. If they report vastly improved results, the sp will fly.

RHB issued a report on Malton yesterday entitled "Entering a New Growth Phase".

Malton’s MYR3.5bn Bukit Jalil City project may be a turning point and key earnings catalyst. It has sold MYR400m worth of shop lots in that project while other projects worth MYR1bn will be launched in FY15. The company is now sitting on a MYR84m potential gain from the 187k sqf of
office space in PBD which will be delivered in four years. Based on a 40% discount to RNAV, the stock could be valued at MYR1.81.

MYR400m shop lot sales to kick in. Malton should enter a new growth phase from FY15. Of the total MYR600m GDV for the 120 shop lots in its Bukit Jalil City project, 70% have been taken up. As the shops were launched in last quarter, earnings have already started kicking in from 4QFY14.

Over MYR1bn projects in the pipeline for FY15. We expect stronger sales of MYR500-600m on the back of >MYR1bn worth of launches in FY15. Compared with only two new launches in FY14, FY15 will see more launches being scheduled as many projects are now ready to be rolled out after some delay. These include the serviced apartments in Bukit Jalil and Pantai Dalam, landed houses in Ukay Spring and shop lots in Pengerang. We are of the view that most of these will be quite salable.

Streamlining landbank to sharpen development focus. Malton recently sold two parcels of land – in Sungai Long and Sungai Buloh – so that its management can better focus on other more sizeable
developments such as the ongoing Bukit Jalil project and its commercial development in Batu Kawan. As both parcels were sold at attractive prices, this will boost its FY15 earnings with a total net gain of MYR52m.

Already making profit from office space entitlement in PBD. Although construction on the redevelopment of Pusat Bandar Damansara (PBD) has yet to start, the 187k sqf of office space assigned to Malton by Johor Corp (as part of the settlement for PBD land between JCorp and Tan Sri Desmond Lim) is now worth MYR224m based on a market value of MYR1,200 psf. This suggests a potential gain of MYR84m (+60%) on top of the MYR140m that the company booked as investment asset.

Earnings forecasts and valuations:

Forecasts: We expect Malton’s FY15 earnings to strengthen further even though FY14 earnings were boosted by the MYR140m sale of VSQ. Ongoing projects such as The Cantonment in Penang will be handed over and Nova Saujana in Subang will be nearing completion in FY15, while progress billings from sale of the Bukit Jalil shop lots are due to stream in. The company’s construction division has unbilled contract value of MYR410m, and its property development unbilled sales currently total MYR470m. This will be topped up further over the next few months as the newly launched SK One Residence in Seri Kembangan is 80% booked for Block A.

Meanwhile, FY15 will also see the recognition of the MYR52.3m total net gain from completion of the disposal of the company’s two pieces of land during the financial year. Projects other than that in Bukit Jalil City such as Nova Pantai, landed homes in Ukay Spring and shops in Pengerang should underpin earnings in FY16. Malton’s net gearing currently stands at 28%, in line with the industry average.

Valuations: Malton has a compelling re-rating angle. Its strategic landbank, potential upside in its asset value as well as its value-unlocking efforts via land disposals and property developments suggest that there is deep value in the company. Unlike the volatility in the past, Malton’s earnings should enter a new phase of growth from FY15, with the Bukit Jalil City project being the key catalyst. Based on a 40% discount to RNAV, the stock could be valued at MYR1.81. Note that the potential gain arising from the office space in PBD could add 13 sen to our RNAV/share estimate,
although this is excluded from our valuations for now. At the current price, the stock is trading at undemanding 6.8x CY15 P/E and 0.66x P/BV (NTA/share of MYR1.56), while other small cap developers under our coverage are already trading at 8-9x PE.

Wow, MahSing just paid RM656.9M for 88.7acres or RM170/sqft of leasehold land in Puchong. Very close (~15km) to Symlife's remaining 29.2acres Puchong land. At RM170/sqft, this works out to RM216M or 70c/Symlife share. Symlife has this parcel valued at RM33.9M in its book. Fat margins here.

Star Residence phase 1 GDV is RM900m. The launch is this year.

I think the price will hold steady. Q1 is seasonally lower and the lower profit was already expected when they announced the deferral of several projects in Q4. Looking forward, Q2 should record a one off profit of RM26.4M or 9.3sen in EPS. The unbilled sales are expected to increase significantly when the 3 new projects namely Elevia Residences in Puchong which was recently launched on 8 August 2014, TWY Mon't Kiara and Desiran Bayu in Sri Rampai to be launched in the third quarter of FY2015. FY2016 should be even better when Star Residences start to contribute.

Anyways let us not take our eyes of the prized assets which is the 419acre of Sg Long parcel. This is going to propel Symlife to RM4 or RM5 easily when the analyst start to cover this stock.

To recap, SYF recently paid RM31.08m to the landowners for the 8.1acre Sg Long parcel. This works out to RM88.15 per sqft.

Symlife has 419acres there valued at RM137.4m or RM7.52 per sqft. Using the RM88 per sqft benchmark, this land is worth an amazing RM1.606B or RM5.18/share on an undiluted basis or RM3.85/share with the warrants fully converted.

Then we have another benchmark from SHL Consolidated whose management stated their Sg Long land is worth RM130/sqft base on market value. Now this is worth Rm7.65/share.

If it goes down, that's what you call an opportunity.

Go to his website tongkooiong.com. He updates his portfolio regularly and stated the reasons for buying them. He got them at RM1.25.

Did anyone notice that Tong Kooi Ong bought Symlife shares recently?

I got all of it from the internet.

@kancs, Why did Symlife sell the 200acres of Sg Long land to YTLCement? Did a bit of digging for info over the weekend. Back in 2007, Azman Yahya was cleaning up Symlife's debt by selling all non property related businesses; and the quarry business known as Kenneison Brothers was one of them they exited. Who did they sell this to? YTL Cement and as I understand, the RM24m sale involves all its machinery and quarry lease but not the land. YTL also pays Symlife RM3m per annum for the next 12years (up to 2019). So the relationship between Symlife and YTL were forged pretty early on which led to the eventual sale of the 200acre of quarry land in 2013.

thanks lwalk.

saw this on a blog. not sure how true is it.

Malton: It is undertaking a private exercise to raise funds for upcoming projects. It is expected to raise some rm40 million or a placement price of rm1.10.

Institutions like Malton but the share price is volatile and they cannot get enough shares.

Observers had ascribe a fair value of around rm1.70 give its strategic landbank. Its latest reported NAV stood at rm1.55 a share.

Its net cash in operating activities stood at rm32.3 million as at March 31 2014 versus rm193 million a year ago while its total borrowings stood at rm397 million.

It is posed to play a bigger role in the development of Damansara Tow Centre, expected to be completed over seven or eight years from 2014.

It also has three projects in the pipeline worth rm7.9 billion at Bukit Jalil, Batu Kawan in Penang and Pengerang in Johor. Malton will be building a shopping mall worth rm3.5 billion in Bukit Jalil.

I think they took this route to ensure minimum premium is paid out in the takeover. In order for RHBCap to push through a sale of assets, it will need support from 75% of its shareholders. Aabar owns 21.2% of RHBCap. OLH owns 9.9%. Now these 2 major shareholders won't accept unless the deal is really exceptional.

On the other hand, RHBCap will need only 50% plus one share from its shareholders to buy CIMB Group’s business. Currently, the EPF has a 41.5% stake in RHBCap.

i like both. They have loads of potential.

They will return to shareholders dividends in the form of shares through this buyback. Only one way for the share price which is up.

it's showtime.

But for small cap, perhaps a 60-70% discount. So a TP of RM2.7 is not unreasonable.

My calculated RNAV is around RM9 without including the Star Residences.

Symlife gave out the free warrants last year on a 1 for 4 basis.

I am glad I got into the warrants on time.

OSKProp mother and warrants price skyrocketed with the release of a very good set of quarterly results. PJDev is also expected to record a very profitable quarter. Can't wait for that to happen.

Azman Yahya has 22% stake in both the shares and warrants. I doubt he is after making more money like the OLH and the VT's out there. What he is after is recognition. We all know he has a knack of turning around debt laden companies via his stint at Danaharta and he has proven it again with Symlife reducing the RM500 odd million to RM100 million (net of cash) it is today. The next goal he is hungry to achieve is to be conferred as one of the best (top 10/top 25) performing property developer. All this will be good for the share price.

The message is very clear, we shareholders want fat premiums for OLH's cash if he was to launch a general offer.

PJDev has a paid up cap of 456.2M shares. OLH and his family only has about 31% of the mother share. They hold about the same percentage in the warrants. Any takeover offers for PJDev without a massive premium will end miserably. At this juncture, the warrants offer more upside than the mother share and the longer he waits, the pricier it will be as PJDev is enroute to chalk up fantastic earnings in the coming quarters from the multiple property projects launched last year and the year before. This does not take into account the 2 exceptional earnings recorded from the sale of the PJD tower and Mont Kiara land.

Absolutely. You should clarify with Management during the AGM what plans do they have with the Sg Long lands and what is the market price per acre for those land there and why did they sell it so cheaply with deferred payment.

I agree it is on the low side that the 200acres were sold so cheaply and yet with deferred payment. Only Symlife's management will know why.

SHL's Sg Long land is valued at RM130/sqft. Using a RM50/sqft, you'll arrive at RM871.2M or RM2.80/share. At RM100/sqft, it is RM1.742B or RM5.60/share.

Should be this month.

Currently, the languishing share price presents an opportunity to collect while it is still dirt cheap. When one looks at the property sector, many of the counters have skyrocketed (Guocoland, SHL, SAB) while there are still a few counters that scream buy and Symlife is one of them.

Guocoland share price spiked up because of analyst coverage.

Of course it may not largely influence the price movement in the near term; but for those long term holders PJDev is planning to venture abroad in the future and the warrant does not expire until 2020.

Looks like PJDev's foray into Australia will yield handsome returns. The 2ha Southbank parcel of land bought by PJDev for A$145M will be developed into a $1B commercial and residential development. This area is currently an open-air car park, capable of accommodating six or more skyscrapers.

http://www.theaustralian.com.au/business/property/malaysians-set-for-1bn-southbank-project/story-fnko7zi0-1226961749282?nk=bd93b7f02378685a9affb76e3d093fa0

http://www.smh.com.au/business/property/asian-developer-eyes-large-southbank-site-20140620-3ahk6.html

Looks like PJDev's foray into Australia will yield handsome returns. The 2ha Southbank parcel of land bought by PJDev for A$145M will be developed into a $1B commercial and residential development. This area is currently an open-air car park, capable of accommodating six or more skyscrapers.

http://www.theaustralian.com.au/business/property/malaysians-set-for-1bn-southbank-project/story-fnko7zi0-1226961749282?nk=bd93b7f02378685a9affb76e3d093fa0

http://www.smh.com.au/business/property/asian-developer-eyes-large-southbank-site-20140620-3ahk6.html

i agree, huge upside here for Symlife.

i am glad my strategy to continue buying the warrants have paid off.

That's right freeman. If they set the rights and exercise price at RM0.50, you will stand to make a windfall around RM8k assuming the warrants open at RM0.40 base on the current price of RM1.08.

Looks like a close > RM1 today

I think there is a conversion cost to change the land status from lease hold to free hold and it very much depends if GOB and PDC can strike an agreement.

See page 21 of the circular under section 4.5 Prospects of the GOB Group.

What is interesting in the circular are these paragraphs below:

Basis and justification of determining the issue price of the Rights Shares and exercise price of the Warrants The issue price of the Rights Shares and the exercise price of the Warrants shall be determined by the Board at a later date after all required approvals for the Proposals have been obtained and upon completion of the Proposed Par Value Reduction but prior to the Entitlement Date, after taking into consideration, amongst others, the following:-

(a) the TEAP of GOB Shares based on the five (5)-day VWAP of GOB Shares immediately preceding the price-fixing date;
(b) an appropriate discount to the TEAP of GOB Shares (based on the five (5)-day VWAP of GOB Shares immediately preceding the price fixing date) of not less than 20% and up to 50%;
(c) the new par value of GOB Shares after the Proposed Par Value Reduction of RM0.50 each;
(d) the prevailing share price of GOB Shares and market conditions on the price-fixing date; and
(e) the current and future prospects of the GOB Group.

The range of discount as disclosed in Section 2.3.1(b) above has been determined after taking into consideration, amongst others, the prevailing level of market price of Existing Shares and the basis of pricing of selected precedent rights issue with free warrants exercises for the past one (1) year up to LPD, which the Board deems appropriate and sufficiently attractive to entice the Entitled Shareholders to subscribe for the Rights Shares.

In determining the appropriate discount for the exercise price of the Warrants, the Board would also take cognizance of the fair value of such Warrants which are sufficiently attractive as an incentive to the Entitled Shareholders. For illustrative purposes, the indicative issue price of the Rights Shares and indicative exercise price of the Warrants is assumed at RM0.50 each
respectively, representing a discount of approximately 29.75% to the TEAP of Existing Shares of RM0.7117, calculated based on the five (5)-day VWAP of Existing Shares up to and including LPD of RM1.0293
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If the rights and exercise prices are set at RM0.50, then the subscribers are looking at a huge windfall from the free warrants as they could be valued at RM0.39/warrant using the Trinomial pricing model sourced from Bloomberg.