NP Icon. Looking at Pavillion REIT, it seems that they have the first right of refusal to purchase DaMen and inject it into the REIT. GOB could be looking at hiving off the DaMen to PavREIT which could bring in RM300-400m.

Icon, DaMen is slated to open in 2015. GOB will have a NLA of 420k sqft of recurring earnings. Will you do a Part 5 on the GOB series of write ups on this area?

warsurfer, I do not have a short term price objective as I am in for the long run. If you have read my earlier write ups on GOB, I think it is easily worth RM3 or more base on the new valuation at the Batu Kawan land and the recently concluded Seri Kembangan land sold by Ekson.

Icon8888, yes let's enjoy the ride up. Everyone huat with GOB!!!

This is from AmSecurities this morning:

- Meanwhile, we are bullish on the Penang real estate market. The newly completed Second Penang Bridge with its vastly improved accessibility to the island is fueling strong buying interests from developers looking to arbitrage land value in the Batu Kawan area on the mainland. The Bridge is driving an economic transformation with the associated job creation underpinning inward residential migration to the Batu Kawan area. Aspen Group, a private developer, has established a joint-venture with Ikano to construct an integrated retail mall anchored by IKEA while Paramount will be building a new KDU college.

- We expect Batu Kawan to be transformed into the Northern Region’s newest urban centre. Given its significantly lower base compared to residential prices on the island, sustained economic development and rapid urbanisation will narrow the price gap in the area, we believe. Another key appeal here is the availability of landed homes at significantly cheaper prices compared to houses on the island.

- Global Oriental is the largest developer in the Batu Kawan area. Its flagship project Bandar Cassia (350 acres) is strategically located about 1.5km from the Batu Kawan Interchange of the Second Penang Bridge. As of end Dec-2013, its book value stood at RM1.19/share. GOB recently proposed a rights issue of 227.3mil shares (1:1) together with 113.7mil free warrants (2:1).

GOB is attracting the right attention. I foresee a new research coverage on GOB by AmResearch soon.

Today's traded volume at 11:40am of 9.5m shares has nearly surpassed yesterday's total volume of 9.8m shares. And the buy rate is almost 80% indicating an accumulation phase is currently ongoing. We can expect GOB to rise further.

likewise my friend.

Well written my friend.

firebird, i apologize i do not follow protasco.

I am in GOB for the long haul. I would at least like to have doubled my money on this investment. On the question of how much exposure you have, if you do not sleep well at night, then I suppose it is too much.

Yesterday's volume of 8.37m shares transacted was huge with a large percentage of buyers. Today we see a follow up of someone with deep pockets or a fund loading up GOB. Volume as at 3:05pm is already 7.4m shares transacted with a 75% buy rate. Seeing that Tambun Indah and the other property counters with huge exposure to Seberang Perai Selatan have gone up significantly, everyone is jumping into the GOB bandwagon before it takes off.

The Hatten Group name popped up when you google Capital City. They are pretty established in Melaka. Not too sure about their track record.

CAPITAL 21 @ CAPITAL CITY OFFICIAL LAUNCH

Launched on Sat, 28th Dec 2013, the first phase of Capital City, Capital 21 attracted crowds of foreign and local investors who flocked to the airplane-themed Official Launch. Ushered by ‘airline staff’, guests ‘boarded’ “Airways Capital 21” for an investment journey – departing from ordinary property launches, this was a teaser of the project’s originality and the excitement to come.

The vibrant show gallery, located at No. 1132, Jalan Tampoi, Kawasan Perindustrian Tampoi, Johor showcases 5 major capitals namely, Tokyo, London, Switzerland, Hong Kong and Madrid.

Offering freehold retail lots with a guaranteed 15% rental yield for the first 2 years and units ranging from 120 sq ft to 5,000 sq ft; priced at RM380,000 onwards, Capital 21 is slated for completion in 2018.

This was what UOB KH had to say:

Gadang Holdings Bhd (Jan 24, RM1.13)

Maintain buy at RM1.15 with a target price of RM1.50. For the second quarter ended Nov 30, 2013 of financial year 2014 (2QFY14), Gadang reported revenue of RM141.2 million (+24.5% quarter-on-quarter [q-o-q], +13.9% year-on-year [y-o-y]) and core net profit of RM8.3 million (+15.3% q-o-q, -30.2% y-o-y).

Its core net profit of RM15.4 million for the first half (1H) of FY14 was about 45% of our full-year forecast. Going forward, we expect earnings to catch up, especially when progress billings of its property division kick in. Earnings were boosted by higher contribution from its property development segment. Pre-tax construction margin improved y-o-y due to the commencement of the mass rapid transit (MRT) construction jobs while the property development margins
remained flat.

Gadang’s construction order book remained healthy at RM1.18 billion. On the construction front, most of itsconstruction projects will be coming to a tail end when the MRT project is completed in 2016 to 2017. We estimate construction revenue to make up 75% (RM344 million) of FY14 total revenue, with the bulk coming from the MRT project.

Currently, the company has an outstanding construction order book of RM1.18 billion. We estimate that these construction jobs would contribute about 7% to earnings before interest and tax margin for FY14. The next key driver will be its project in Tampoi, Johor. In December 2013,
Gadang entered into a joint venture agreement with Capital City Property Sdn Bhd (CCPSB) to co-develop a site in Tampoi. Gadang will act merely as a landowner in this deal and in exchange, it will receive RM57.5 million (or RM110 psf) for the proposed land, which will be redeveloped.
Gadang will also receive additional gross development value (GDV) proceeds of up to RM324 million, or 16.7% of the final GDV of RM1.8 billion, which translates to a net gain of about RM219.7 million, or 73 sen per share.

In terms of financial impact, assuming the Jalan Tampoi development is progressively launched over the next five years, Gadang could potentially recognise RM40 million yearly, which represents about 1.1 times of our FY14 earnings forecast. Maintain “buy” and target price of RM1.50, based on eight times fully diluted FY15F price-earnings ratio (PER), on a par with its FY12 and FY13 average forward PER.

Gadang has the potential to rerate upwards, driven by strong earnings growth visibility and lucrative concessions that provide stable cash flows. In a blue sky scenario based on sum-of-the-parts valuation, we believe the company could be worth RM1.90 per share. — UOB
KayHian, Jan 24

If I am not mistaken, PNT is the sole distributor of luxury table wares such as Corelle, Vision & Pyrex in Malaysia. I believe GOB will be able to tap the marketing of these products via stores in Pavillion and the upcoming malls in their property investment portfolio.

CIMB Research today has issued a report on TROP entitled "A developer to be reckoned with". Fully diluted RNAV is RM5.11. Applying a 30-40% discount, it is valued in the RM3.07-3.58 range.

Go ahead Icon.

Happy to share here. I have performed further analysis of their Quarter on Quarter reported earnings and for their financial year 2014, the topline(turnover) has grown from RM70.4m in Q1 to RM82.5m in Q2 and to RM92.9m in Q3. The profit margin(profit before tax) of the property development sector has risen from 11.8% in Q1 to 18.8% in Q3. Looking at their minimum estimated GDV of RM1.09b of launched projects i.e. Springville, Galleria, DaMen residences, EQuator and Villa Heights, GOB should record sequential increase in property earnings. This has yet to take into account the Batu Kawan projects and land price appreciation since the IKEA and Ekson transactions at Batu Kawan and Seri Kembangan respectively. Anything below RM1 is a steal if you ask me.

hope GOB will make its shareholders a windfall

I too see huge value in GOB. I posted this last month. Current prices are an opportunity to collect more GOB shares.Here are my reasons:

a) Batu Kawan land at really low prices.
PDC recently concluded 1 transaction for a 245acre Batu Kawan land to Aspen Vision Land Sdn Bhd-Ikano Pte Ltd JV for RM483.9mil. This works out to c.RM45/sqft.

In the 5thFeb2014 published article "Bridge of Opportunity for Ecoworld" in the Business Times (http://www.btimes.com.my/Current_News/BTIMES/articles/20140204235000/Article/index_html), the reserve price set by PDC is RM45/sqft.

Just this week, Paramount purchased 30acres for close to RM50/sqft. Land prices at Bandar Cassia are rising fast. But GOB has a distinct advantage of having very cheap land cost and another 145acres pending to be transferred to them at RM3/sqft.

Now GOB own 240.8acres of land base on their latest 2013 AR. The book value of these 2 parcels of land which sits in the heart of Batu Kawan is a mere RM102.7mil. If revalued base on the RM45/sqft, this works out to RM472mil or RM2.08/share.

There is more upside if you studied the 3rd quarter financial report release under item 13 which states the following: The Board of Directors has approved capital expenditures in respect of acquisition of lands in Batu Kawan, Seberang Perai Selatan, Penang at a cost of RM19.3 million. If you are to revisit the older announcements, there are 2 additional parcels (Parcels 3A & 3B) of land at Batu Kawan totalling 145.34acres awaiting to be transferred to GOB's wholly owned subsidiary, Penanga Pesona. Once this transaction materializes, GOB will own 385acres of land in the heart of Batu Kawan. Pricing it at RM45/sqft, GOB's surplus valuation is RM633.4m vs the what's recorded in the book. So the Batu Kawan land itself is worth RM3.32/share.

b) Proximity to IKEA, Premium outlet mall, Hull University, etc.. RM45/sqft is what was transacted with PDC. But once the land is developed, its value will rise further. They could easily double or triple in value due to its closeness to these landmarks.

c) GOB also owns some land at Seri Kembangan. The 2 larger ones are at 52 and 56 acres with a book value of only RM3.34 and RM17.35 per sqft respectively. If you recall, Eksons recently concluded a sale of a 14.64acre parcel for RM140.27mil (or RM220/sqft). The land sold is within the vicinity of the GOB land. If those 2 parcels are revalued or sold at RM50/sqft, GOB is further valued at RM1.03/share. What if it is RM200/sqft? You do the math.

d) JV with Lembaga Getah to develop prime land in the heart of KL.

SEBERANG PERAI - The double-storey link homes shaping up amid Batu Kawan’s oil palms will fetch million ringgit price tags in 10 years, property firm Henry Butcher has predicted.

Budget-conscious home buyers, unable to afford houses on the island, have steadily driven up the price of property on the mainland in recent years, in anticipation of Penang’s second bridge at Batu Kawan, which opened last week.

“New residential double storey terrace houses in Batu Kawan are now being priced at RM400,000 per unit and is set to increase steadily, to reach RM500,000 in three years’ time; and 10 years from now, a unit could cost about RM1 million,” said Fook Tone Huat, an associate director at Henry Butcher Malaysia’s Seberang Perai office.

Home prices in and around Batu Kawan are expected to skyrocket further once Swedish furniture retail giant Ikea opens a planned store there in 2020.

“If you want to buy a home in Seberang Perai, the best time is now before prices climb over the next decade due to the planned developments in Batu Kawan,” Fook told a news conference here today.

Outside of Batu Kawan, he said double-storey terrace houses on the mainland were currently priced between RM200,000 and RM500,000, compared to similar houses on the island that cost upwards of RM500,000.

As such, the total value of transaction for development land on the mainland has risen, Fook noted.

The price per square foot (psf) has also shot up; 30 acres of land in Batu Kawan was sold recently at RM50 psf, 50 acres in Bukit Tambun (at RM40 psf), 76 acres in Jawi (at RM12.80 psf), and a parcel of land in Jalan Ong Yi How in Butterworth went for a whopping RM115 psf, Fook said.

“These ventures by major developers, especially in the southern Seberang Perai, will further boost the mainland with more new developments coming up,” he said, and attributed it to the opening of the bridge linking Batu Kawan and Batu Maung, an industrial zone on the island close to the Penang International Airport.

The boom will be seen in five main areas, Fook said, listing Alma, Bukit Mertajam, Batu Kawan, Simpang Ampat and Jalan Baru in Perai.

But other areas will also enjoy the spillover effects, he added, and named Byram and Changkat in Nibong Tebal as future growth zones.

“Another future growth area to take note of will be the Royal Malaysian Air Force Base area in Teluk Ayer Tawar which is in the vicinity of where the proposed undersea tunnel is supposed to link the island to the northern side on the mainland,” he said.

Penang is planning a 7.2km long undersea tunnel as its third link to the mainland, connecting island tourist hotspot Gurney Drive and Bagan Ajam on the mainland north.

http://www.themalaymailonline.com/money/article/batu-kawan-to-be-next-millionaire-home-says-realtor

i see mr scaremonger with a hidden agenda has deleted all his posts.

some people just don't get it. companies can't raise rights below the par value. trading below rm1 par value, they could not raise a rights above it. no one would pay a premium. that's why there is the par value reduction to 50c. the reduction in par value in no way went to offset any accumulated losses.

Many companies that are doing well raise rights issues to fund their objectives and expansion programs. Mah Sing did it in July 2013 and so did Sunway in April2013. When Sunway announced the cash call at RM1.70, it was at a huge discount to the last traded price of RM3.16.

If you were to read RHB's write up on GOB, you will understand why they need the cash and what it will be used for.

chipster1234, the par value reduction does not reduce the share price. the issuance of the rights does. In this case, it is a 1 for 1. So depending on the issuance price, the price will trade accordingly. Say the price for the rights is 50c and the last traded price is 80c. Therefore the new price is 65c on the ex date.

GOB is in a healthy financial state with its gearing ratio only at 0.28x.

There is no change to share price. The par value reduction is not used to reduce any accumulated losses like most distressed companies who did this. e.g. KBB. Good companies do reduce their par capital. Digi in 2006 reduced the share's par value from RM1 to RM0.10 to undertake a capital repayment to shareholders.

GOB stated the following on the par value reduction:
Currently, the Existing Shares are being traded below the existing par value of RM1.00 each. As at 21 February 2014, the closing price of Existing Shares was RM0.85, which is below the existing par value.

The current market value of the Existing Shares is therefore not conducive for GOB to embark on any fundraising or corporate exercises which involve the issuance of new shares. Accordingly, the Proposed Par Value Reduction is intended to provide the Company with greater flexibility to implement corporate proposals which entail the issuance of new shares at a price which better reflect the current market value of the Existing Shares.

The Board has taken into consideration that the Proposed Par Value Reduction will not result in any change to the net asset position of the Group.

The credit arising from the Proposed Par Value Reduction of RM113,669,160 is proposed to be credited to the Company‟s capital reserve, which may be utilised in such manner as the Board deems fit and as permitted by relevant and applicable laws.

As for the rights issue, it is used to retire some debts and for working capital to fund purchases of land and finance existing projects.

the directors and major shareholders own less than 20% collectively. The top 30 shareholders own less than 50% of the total shares. I doubt there will be any privatization.

With land prices rising, selling prices for the homes will also rise in tandem. There will be a huge profit margin expansion for GOB in the coming few years. This will be the re-rating catalyst backed by strategic landbank and recurring earnings from malls.

I see today's fall in prices as more of an opportunity to collect GOB shares.Here are my reasons:

a) Batu Kawan land at really low prices.
PDC recently concluded 1 transaction for a 245acre Batu Kawan land to Aspen Vision Land Sdn Bhd-Ikano Pte Ltd JV for RM483.9mil. This works out to c.RM45/sqft.

In the 5thFeb2014 published article "Bridge of Opportunity for Ecoworld" in the Business Times (http://www.btimes.com.my/Current_News/BTIMES/articles/20140204235000/Article/index_html), the reserve price set by PDC is RM45/sqft.

Now GOB own 240.8acres of land base on their latest 2013 AR. The book value of these 2 parcels of land which sits in the heart of Batu Kawan is a mere RM102.7mil. If revalued base on the RM45/sqft, this works out to RM472mil or RM2.08/share.

Now there is more upside if you studied yesterday's quarterly release under item 13 which states the following: The Board of Directors has approved capital expenditures in respect of acquisition of lands in Batu Kawan, Seberang Perai Selatan, Penang at a cost of RM19.3 million. If you are to revisit the older announcements, there are 2 additional parcels (Parcels 3A & 3B) of land at Batu Kawan totalling 145.34acres awaiting to be transferred to GOB's wholly owned subsidiary, Penanga Pesona. Once this transaction materializes, GOB will own 385acres of land in the heart of Batu Kawan. Pricing it at RM45/sqft, GOB's surplus valuation is RM633.4m vs the what's recorded in the book. So the Batu Kawan land itself is worth RM3.32/share.

b) Proximity to IKEA, Premium outlet mall, Hull University, etc.. RM45/sqft is what was transacted with PDC. But once the land is developed, its value will rise further. They could easily double or triple in value due to its closeness to these landmarks.

c) GOB also owns some land at Seri Kembangan. The 2 larger ones are at 52 and 56 acres with a book value of only RM3.34 and RM17.35 per sqft respectively. If you recall, Eksons recently concluded a sale of a 14.64acre parcel for RM140.27mil (or RM220/sqft). The land sold is within the vicinity of the GOB land. If those 2 parcels are revalued or sold at RM50/sqft, GOB is further valued at RM1.03/share. What if it is RM200/sqft? You do the math.

d) JV with Lembaga Getah to develop prime land in the heart of KL.