Icon, I retired to bed after I hit the like button. I think you are probably right on the profit amount but it is very likely staggered over the next few quarters(perhaps over 6 quarters as opposed to within 1 year) as the loans disbursed by the banks are depending on the progress of the development. If this is the case, we might see a jump in earnings end of this year.

With what you have written, it just serves to whet one's appetite to buy more into GOB as it truly looks like a hidden gem. There are so many irons in its fire - DaMen, Batu Kawan, JV with Lembaga Getah, etc. I do believe RM3 is a realistic target price.

Currently, there is still very little coverage given to GOB by the research houses but I foresee CIMB might do a write up soon. Great job once again!

Hi Icon, great article with the pics. RHB's recent report stated that DaMen will be injected into PavReit for RM550-600m more than what we projected a couple of weeks back. Do you think they are able to complete the mall within 2015?

let's hope it continues to go up to at least RM1.72 in the short term.

no problem. happy to share.

Pls go read up the announcement from the Bursa Malaysia site.

Batu Kawan Development is a wholly owned subsidiary of Abad Naluri.

Looking forward to it.

Abad Naluri was previously owned by GOB. They had disposed it sometime back. GOB is linked to Desmond Lim(DL). His name doesn't show up in the major shareholders list but it is rumored that he controls it. Malton on the other hand has DL on the register.

GOB will focus on both residential and commercial development in Batu Kawan. Refer to my comments on Icon8888's part 6 write up on GOB.

Anything can happen. It could drop like what you said. Or AZRB may announce a large contract win and the share price rockets. We will know soon.

Taking into account the exercise price of 70c and the long conversion period of 10 years, Black Scholes pricing has the warrant priced around RM0.25-RM0.30. Could be more you never know.

More info can be combed from Malton's 2012 announcement. Regardless which side is the govt of the day, the JV cannot be revoked unless Abad Naluri deems Malton does not fulfill the agreement. If the Govt wants to take over the land, they will need to purchase it. At what rate, it could be at prevailing market rate with a discount. Not too sure on that.

All land in Bandar Cassia is leasehold except for the recently acquired 30acre land by Paramount.

Ah Moi, AZRB has already ex-rights. So there will not be any further gap down in the share price once the new rights shares are listed.

- The closing price on 26Mar, the date before the ex-rights date = RM0.845
- Rights is at RM0.500, theoretical ex-price cum rights is (RM0.845*8+RM0.500*6)/14 = RM.697. That was the price on 27Mar.
- Since 27Mar, the sentiment to buy into the shares and the rights has been encouraging with the speculation they would win the Langat2 project. AZRB's share price has risen to RM0.800. If it stays there, then that is the listing price of your rights share on 16May. If there is movement in the price, that will be the new price. In actual fact, one should buy more AZRB-or at RM0.34 and pay RM0.50 for the conversion(before end of this month - pls check with your remisier) as what you get is one mother share and half a warrant. If the price of the mother share remains the same, you will stand to gain a handsome return as the warrants will be in the money and could list around RM0.25-RM0.30, a gain of RM0.25*0.5+RM0.80-RM0.34-RM0.50=RM0.085

If your holding period is 2 to 3 years, I think you will easily more than double your investment. By that time, DaMen mall is up providing recurring earnings. Thier Batu Kawan projects and JV with Lembaga Getah wil be in full swing. And if what RHB reported is correct that they will dispose off DaMen to Pavillion REIT for RM500-600m (> RM1 diluted share), this will put GOB is an extremely comfortable position.

If you look at the map on page S8 of the Seberang Perai special report, you can see that GOB has 73.34acres of commercial land. From my understanding GOB will have a few service apartments/condominium blocks, a mall, office tower and possibly a hotel for recurring earnings. This will be launched once IKEA is established. And these development will have a green lung which is the theme park(eco park) next to it. You can bet that these projects will do very well.

aye to that :D

When I was there last week, i visited GOB to better understand what plans they had for their Batu Kawan parcel and what is to be developed as a whole. They had this scaled down model of the Batu Kawan area and I was pretty much impressed by it.

One thing to note though is that currently the environment is too quiet for my liking. There were hardly any vehicles passing through the Batu Kawan township and it was the same observation when I drove across the 2nd bridge as well. At this point in time, I would not buy any properties here but 2 years from now, I might very well change my mind. Then again, this means I would have to pay a premium for it.

Investing in GOB is the best vehicle in my opinion for now if all I want is to make money.

More attention can only be good.

I foresee either the price of the mother share come down and that AZRB-or remain unchanged or the AZRB-or climb in price while the mother share remain unchanged. I prefer the latter.

AZRB had one poor financial year because of cost over runs on the Al Faisal university project. Many companies that ventured to the Middle East were adversely affected. Now AZRB is solely focusing on Malaysia projects, concession assets and their plantation in Kalimantan.

The par value reduction is to clean up the accumulated losses in its balance sheet (due to the Al Faisal Uni project). As for raising of bonds to the tune of RM1b, this is tied up with the Elevated Klang Valley Expressway in which they have to fork out 80% of debt to achieve financial close.

2015 will mark their turnaround in which their plantation assets will start to bear fruits and work on their concession assets would already have started. Come 2018, they would start collecting toll, billing the Msian govt for the university teaching hospital and plantation assets are now nearing the matured phase. This share is for keeps. So don't miss the boat while it is still cheap.

wow. don't get left behind yeah. everyone better get on board before the train speeds away.

AZRB-or Target Price is RM0.42. There is ~ 20+% upside from the current price.

Their tax rate on their profit paid to the IRB is way too high due to the company structure. It is in the region of 40-45%. This should normalize soon.

fatt168, that is another angle but as you can read from the above, the target price of RM0.96 is rather conservative. So AZRB is not overvalued.

RHB issued a new report this morning commenting on the Langat 2 water treatment win. It is interesting to note that the fair value of RM0.96 is derived conservatively since it only considers the value of the plantation land at 0.7x the book value (RM123m). If the market value of RM250m is used in the calculation, the fair value of AZRB when fully diluted is RM1.24. Without the warrants dilution the fair value is RM1.44. So there is still much upside to AZRB especially once the concession earnings kick in and the plantation arm start to bear fruits.

You pay RM0.33 for the AZRB-or and you fork out an additional RM0.50 for the conversion. Total outlay is RM0.83.

What you get is AZRB worth RM0.81 and 0.5 AZRB-wa worth RM0.26. Total gain is RM0.81+RM0.13-RM0.33-RM0.50 = RM0.08. So this means AZRB-or should be priced around RM0.33+RM0.08= RM0.41.

You want to make money? Buy into AZRB-or now as it is an arbitrage play! You pay RM0.33 for the rights and pay additional RM0.50. What you will get is a mother share worth RM0.81 and a free warrant that is in the money and have a 10 year life. The difference is RM0.02. Now this warrant could possibly trade around RM0.25-0.35. And you are paying only RM0.01 for it. This means that AZRB-OR should trade in the region of RM0.41-0.43.

I am not sure if it is legal for AMresearch to initiate a write up on GOB since they are advising on the rights issue. It would be great if CIMB does come out with a write up on GOB once it reaches RM1.50 and state that it is a STEAL at that price and value it at RM3.50. Just wishful thinking.

5 minutes after 4pm, the transacted shares is now 31.2m. Wow.

wow, broke the rm1 barrier.

Today's volume is ferocious. 22.5m shares transacted up to 4pm with a 68% buy rate.

from the RHB invest portal. Can the admin put this up here?

You must be referencing the older writeup. Today's published report has the TP at RM1.72 applying a 40% discount to the RNAV.

Huge block of shares at 95c has been cleared. Shot passed the 5 year high.

yes. penang lang.

Btw, paid their Batu Kawan sales office a visit over the weekend. Pretty impressed with the upcoming developments there.

RHB just initiated coverage today. TP RM1.72.

Batu Kawan projects to be launched mid of this year. 330 terrace, super terrace and semi d's.

Very likely to surpass it.

Sunway to develop premium outlets in Ipoh
Business & Markets 2014
Written by Levina Lim of theedgemalaysia.com
Monday, 14 April 2014 10:05

KUALA LUMPUR: Sunway Bhd, controlled by property tycoon Tan Sri Jeffrey Cheah, is diversifying its business to include developing and operating premium outlets, the first of which is to be opened in Ipoh, Perak. “Sunway Ipoh Premium Outlet will be our first venture into the outlet shopping concept. We are now in the advanced stages of finalising our plans,” Sunway chief executive officer of shopping malls and theme parks, HC Chan, told The Edge Financial Daily in an interview.

Spanning over 35 acres (14.16ha) of land, the premium outlets will be situated close to the Lost World of Tambun water theme park. They will feature popular luxury brands such as Coach, Michael Kors and Kate Spade. Construction will take two years to be completed. Chan, adviser and immediate past president of the Malaysia Association for Shopping and High Rise Complex Management, said Sunway Ipoh Premium Outlet will be a fully-integrated development modelled after the Sunway Resort City in Bandar Sunway, Petaling Jaya.

“It’s [going to be] like the Sunway Resort City. Apart from the premium outlets, we will also have a hotel, theme park and shopping mall there,” he said, adding that the group is already operating a hotel and theme park in Ipoh, which are the Lost World Hotel and the Lost World of Tambun. Chan said the design and planning works for the development had been finalised and discussed with the relevant retailers.

“The feedback on our premium outlet plan has been positive,” he said, adding that the development will be able to leverage on the traffic flow from the North-South Expressway.
A concept that originates from the US, Chan said premium outlets are usually located some distance away from city centres as customers are willing to travel for a good buy. It also minimises competition in the shopping malls located in the city centres.

A typical premium outlet centre has a single- or double-storey layout consisting of branded goods sold at discounted prices. “There is an emerging trend among young people who like to own a Coach, Michael Kors or Kate Spade at a price that they can afford,” Chan said, adding that he sees a growing shift towards lifestyle shopping. He said the refurbishment of Sunway Putra — comprising Sunway Putra Mall, Sunway Putra Hotel and Sunway Putra Tower — and the redevelopment of Sunway Velocity (formerly Queensbay) in Kuala Lumpur is on track for completion by the end of this year and end-2015 respectively.

The total investment in Sunway Putra is about RM600 million, while close to RM1 billion has been invested in Sunway Velocity. When completed, Sunway Putra Mall and Sunway Velocity will have a net lettable area of 600,000 sq ft and 900,000 sq ft respectively. Chan expects the two projects to contribute substantially to Sunway’s bottom line. “We believe that these two projects will give us strong, healthy returns G I don’t want to put a figure [on it], but we are very confident and
comfortable that the financial returns will be very healthy,” he said. Sunway Velocity is located in a high disposable income area in Cheras and there is a lack of well-planned shopping malls to serve
southern Kuala Lumpur, said Chan.

“As for Sunway Putra Mall, it was a popular shopping mall 25 years ago [when it was known as The Mall]. We want to bring back the glory days,” he said, adding that the mall is strategically located in the vicinity of the upscale Bukit Tunku area, with highway accessibility. For the financial year ended Dec 31, 2013 (FY13), Sunway’s core net profit rose 38% to RM482.7 million from RM350.7 million, while revenue was 15% higher at RM4.73 billion compared with RM4.13 billion in FY12. Chan believes that there is a need to occupy a leadership position in this lucrative, but increasingly competitive shopping mall industry to survive.

“[For example,] there may be 20 shopping centres [around], but customers are unlikely to visit all 20 shopping centres as they have limited budget and time. [Therefore] we have to position ourselves as the preferred shopping mall for the primary market that we are in,” he said. Sunway currently owns five shopping malls. They are Sunway Pyramid, Sunway Giza in Kota Damansara, Sunway Putra, Sunway Velocity and Sunway Carnival in Seberang Perai, Penang. There are also plans to open a shopping mall in Iskandar Malaysia, Johor.

http://www.theedgemalaysia.com/business-news/284838-sunway-to-develop-premium-outlets-in-ipoh.html

Boy, am I glad I took a position in the OR last week at 23 and 24sen.

think long term

That is very true. Their 5k hectares of cultivated palm oil plantation land could be worth as much as RM300m if valued at RM60k/hectare. Going rate is somewhere in the region of RM70k/hectare in Sarawak and RM80k/hectare in Sabah. Current plantation asset book value is only RM125m.

Furthermore, with the concession assets such as the teaching hospital and Elevated Klang Valley Expressway set to provide recurring income in the coming years, AZRB's earnings will grow tremendously from the bottom that it is now.

KUALA LUMPUR (Apr 10): JF Apex Securities has raised its target price (TP) for Gadang Holdings Bhd to RM2.67 from RM1.43 previously, as it sees the construction firm’s 9M FY14 earnings rising 40% year-on-year (y-o-y) to RM25 million.

For the full-year, the research house expects the group’s net profit to soar 63% y-o-y to RM33.4 million. At 11.33 am today, Gadang was traded at RM1.33. In a note today ahead of Gadang’s financial results, JF Apex said it is maintaining a ‘buy’ call on the stock at RM1.30.

“The higher earnings will be largely underpinned by the accelerated progress of MRT V2 package worth RM863.4 million, in line with the overall MRT progress,” said analyst Soong Wei Siang of JF Apex.

“Also, the newly-clinched joint venture project in Capital City, Johor Bahru, could drive earnings in the medium term, with FY15F net earnings poised to skyrocket 123% y-o-y.” Soong said FY15F and FY16F earnings will be nudged higher by 74% and 93% respectively, but FY14F earnings will stay unchanged.

He said Gadang’s outstanding order book of circa RM1 billion will provide earnings visibility in the next two years. It also has an order book replenishment in the pipeline as the group is bidding for projects worth a total RM6 billion.

Soong added he likes the company for its diversified business model with exposure in construction, property, utilities and plantation

you can benchmark azrb-wa with symlife-wb when it opens as the exercise price is slightly above the mother share and the expiry is many years away.

symlife mother share price is RM0.975.
symlife warrant price is RM0.300
Expiry is 11Nov2020.
Exercise price is RM1.10

I think AZRB-wa could open around RM0.25-0.30 or more since the expiry is may2024.

NP. Even though there is profit taking today, you can see the buy rate is at 74%. Some funds are collecting. Smart money is in it.

From Kenanga:

GOB’s technical picture turned bullish after the share price broke above its resistance level at RM0.825. While the chart has confirmed a “Bullish Pennant” formation, trading volume notably been increasing for the past few trading sessions. The increasing trading volume coupled with the positive readings from leading indicators led us to believe that GOB is well positioned to resume its uptrend. Traders who look to buy into the stock should target to take profit at RM1.17 (representing 3 bids below measurement objective) for a respectable 26.5% gain. Meanwhile, a protective stop-loss should also be placed at RM0.81 (3 bids below support).

Resilience on the counter after the circular on the JV was made available at the Bursa website this afternoon. Shareholders to vote on 23Apr. I believe Gadang will also announce their Q3 results on the same day. We may have some promising news. Also the PT is RM1.35 with RM1.25 taken out yesterday.

RHB Securities had this to say on 4th April:
Gadang may climb after getting back above the 50-day MAV line. Traders may opt to purchase the stock if it stays above MYR1.20 today, with a close below MYR1.13 as a stop-loss. If the MYR1.25 resistance is broken, the price target would be MYR1.35. The stock could trend lower if it fails to stay above MYR1.20 and the downside risk will increase if the stop-loss is triggered,.

Here comes the cavalry!!

DaMen pixs can be seen at the GOB website. Target completion is Jan2015 according to some websites but I think mid 2015 is a more realistic date.

I think with Pavillion managing DaMen, the average rental rate per sqft per year is higher than RM80. I am assuming an average RM100/sqft/annum rate and this will give a RM42m turnover/year. With an implied margin of 60%, this translates to a PBT of RM25.2m/year. Assigning a 25% tax rate, this results in a RM18.9m PAT. A 6% yield will value it at RM315m.

All these numbers are purely conjectures. Let's wait for it to unfold. A new golden chapter.