Posted by kancs3118 > 2015-09-11 23:44 | Report Abuse

there is a restriction to the land usage for Taman Midah. Need to exclude it from the RNAV computation.

Posted by equitydiary > 2015-09-12 01:49 | Report Abuse

I see. I heard they're leasing it out to Tesco. Do you happen to know how much Symlife is receiving from them?

Posted by JT Yeo > 2015-09-12 07:56 | Report Abuse

Why would revalued properties contribute to an increase in intrinsic value? Revalued properties doesnt generate extra cash flow.

Posted by equitydiary > 2015-09-12 12:06 | Report Abuse

It would generate future CF because the properties will be monetized.

E.g. the NBV of the 4.46 acres Mont Kiara land is RM51m or RM264 psf.

The TWY development which sits on 2 acres of the Mont Kiara land has a GDV of RM480m. Take-up rate good, exceeding 80%. Assuming 15% net margins, this project would contribute a total of RM72mil in future net profits. DCF at 11% over a 5yr development period, it's ~RM53mil, implying ~RM600 psf (surplus of more than RM300 psf)

For the remaining land at Mont Kiara, there's another project with an est.
GDV of RM400m in the pipeline.

Posted by kancs3118 > 2015-09-12 19:10 | Report Abuse

For the Taman Midah land, it appears that the company leased it to Tesco for 30 years (+ an option to extend another 30 years). It was done before Azman Yahya joins the company and i believe the old Bolton was seriously over stretched and needed the funds. The lease payments was done upfront - one shot. That is why there is no capitalisation of MLPs (Minimum Lease Payments) in the balance sheet (long term asset section).

hence, there is a restriction on the usage of the land. I believe that SymLife will look into possible avenues to bring Tesco to the negotiation table - given that the Taman Midah land is a goldmine - furthermore, the status of the land is commercial.

Posted by JT Yeo > 2015-09-12 19:29 | Report Abuse

If you are talking about yet to be developed lands then yea, but you included already completed projects, how does that generate extra CF?

Posted by equitydiary > 2015-09-13 10:40 | Report Abuse

Ok, have updated RNAV.

Thanks for the input/feedback guys.

Posted by kancs3118 > 2015-09-14 11:45 | Report Abuse

there is something else besides the undervalued land (namely the 400 acres of Sungail Long land) which was factored as part of RNAV computation.

SymLife is headed by Tan Sri Azman Yahya ~ a very well connected and a very smart person.
Also, the management of SymLife is very strong - one just need to look at the qualifications of the directors and Mr. Alan (the chief operating officer for Alpine Return - managing the Star Resi).

During the Q&A session with Tan Sri (at the recently concluded AGM), Tan Sri is really in his elements. From the way he answer the shareholders (about 20+ questions have been fielded), you can see Tan Sri is very hands on with his company and i have huge respect for him after walking away from the AGM. Unlike other companies, the Chairman does not know much and have to defer the questions to his lieutenants.

You can see that this company has very much build in a very robust risk management culture. Key risks like finance charges are properly managed (especially important during such soft property market) resulting in a relatively clean balance sheet (especially the liability session). Furthermore, they have many projects in the pipeline - such as Sunway Quay, the land at Old Subang Airport road, Mont Kiara 2 (MK2) and ShahAlam U10 - and they have cautiously deferred / spaced these projects.

Without Tan Sri's connection, SymLife is unable to get the Subang land (which was a JV with RRI) and the endorsement of the Tourism Ministry for the Star Walk of Fame - a key selling point for Star Residences.

Posted by kancs3118 > 2015-09-16 07:55 | Report Abuse

The land bought for EKVE is at about RM15 per sqf (for 20 acres). It will cut across Symlife's land. Given the proximity of Symlife's land to Bandar Sungai Long and the connectivity offered by EKVE, I think Symlife land should worth at least RM80 per sqf. Also, the state governmeny's decision to relocate the Langat 2 water treatment plant to a cheaper land (not at Symlife's land) serves as a good indicator that Symlife's land is valuable (assuming Tan Sri does not pull his strings).At a conservative RM75 per sqf, the Sungai Long land should worth at least RM 1Billion.

Posted by kancs3118 > 2015-09-16 08:13 | Report Abuse

In addition, I have feeling they have not factored in fully the sales of Star Residences (Retail Tower 1) and the 5 blocks of commercial retails into the RM710M unbilled sales.

Think about it.

The GDV for TWY is at about RM480M (per the Annual Reports 2015). It is 80% sold with no buyers rescinding from their S&P agreement. Assuming a conservative RM400M out of RM710M unbilled sales belong to TWY. Then, the difference of RM710M - RM400M = RM310M belong to Star Residences.

Star Residences is a 50-50 joint venture with UMLand. Hence, total sales should be RM620M accruing to Alpine Return. But think about it. The GDV for both RT1 and the commercial block is RM900M and RT1 is already 90% sold. Hence, at the very minimum, Symlife should be entitled to RM400M.

Hence, we should be looking at unbilled sales increasing to RM800M at the very least for the next Quarter Q2'16 results.