Posted by kancs3118 > 2014-12-11 00:00 | Report Abuse

Furthermore, in relation to point #1 as to why the company draws down an additional RM100.0M loans within 6 months?
I believe the major chunk of the loan is to pay off for Da'Men. Based on the prospectus, Da'Men is
- 56% completed, and
- estimated gross development cost = RM1.0B
Simplistically, this means they need an additional loan of RM1.0B x 0,56 = RM550.0M (maximum) to bank roll Da'Men.

I think what happens next is that they will either
- hive off the shopping complex to Pavillion REIT. Based on Icon8888's article, the Da'Men shopping complex itself is worth about RM500M, or
- keep the mall for recurring rental income.
Then again, there is no risk of insolvency given their top brass are from Malton/ Pavillion. They definitely know how to run a premium mall and match its rental income against the financing charges.

Having said all of the above, it seems to me that the company needs the cash proceeds from the rights issue and land disposal to finance its future growth rather than just to keep it afloat and service its loans.

Posted by kancs3118 > 2014-12-11 00:01 | Report Abuse

It seems that the company is in need of funds to gear up for project launches in 2015:
JV with Lembaga Getah: GDV RM1.2B.
Seri Kembangan: EQ City & Villa Heights: GDV RM401.0M,
Batu Kawan: GDV RM662.0M,
Sungai Long land: GDV RM200.0M.

Hence, we are looking at a company which is on a fast growth track and in need of loans to expand. Next year 2015 is going to be very challenging for Malaysia. What if their projects do not sell well?
The other positive points:
Both the land at Seri Kembangan and Batu Kawan is cheap relative to the market and will afford fat gross margins.
All the projects due to launch for 2015 are located at prime locations.

But this is just my guess.

Posted by optimuss > 2014-12-11 00:03 | Report Abuse

next year who buy property leh? everywhere lelong properties. ppls buy lelong properties with half-price.

gob cannot perform. dont dream.

Posted by Rich118 > 2014-12-11 00:39 | Report Abuse

Kancs3118: Actually, I do not really know the integrity of its management. Have not attended the AGM previously to at least know who they are.

The risks are always there : Management integrity, high loan with potential hike in interest rate. To be very honest, I am not so comfortable with its high borrowings.

As for project not selling well in 2015, this would be much mitigated as the three projects (Damen, Springville and Galleria) have good take up rate, so payments from buyers (banks) will be less of an issue.Do you know how much is its unbilled sales?

As for JV with LGM, this will not proceed so soon given the softening of property market. I am actually quite surprised there is no visibility of Batu Kawan project in 2015 (no planned launches).

Please remember the important point highlighted by Iska before, i.e. too many retail shareholders holding more than 50% of its shareholding. Retail investors with their relative weak holding power will throw their shares at any onset of panic selling - as you can see the more than 30% drop in share price in less than 2 weeks. On a positive side, you may want to suspect the "intentional" BIG investors may quietly building up their controlling interest.

Out of the 65% shareholdings held by 213 accounts, only 1 account holds more than 6.5% with the remaining 212 accounts holds between 100,000 to 11.3 mln shares.

6,260 accounts hold the next 23% of shareholding totalling 77.3 mln shares with shareholding of 1,000 to 100,000 shares per account.

So, the share price will be very easily manipulated by someone with strong financial backing wanting to control the company. The rights issue and the recent free fall of share price could be manipulated for these ppl to scare off retail investors from subscribing their entitlement, and leaving a lot excess shares for these BIG investor to increase their shareholdings at much cheaper price. Just some thoughts, I may be wrong.

what is your view of the recent Seberang Prai Selatan land transaction by Vitrox (RM 32 psf)?

Posted by kancs3118 > 2014-12-11 07:30 | Report Abuse

@ Rich118, thanks for your posting,... what other risks can you foresee besides the following?
- high borrowings?
- management integrity?
- possible delay in JV with LGM?
- no visibility of Batu Kawan project?
- too many retail shareholders holding more than 50% of its shareholdings?
- anything else you want to add?
We may try to assess these risks one by one...

By the way, please teach me where to get the information on the number of accounts and percentage of shareholdings in each accounts? Like where to get the data:
<Out of the 65% shareholdings held by 213 accounts, only 1 account holds more than 6.5% with the remaining 212 accounts holds between 100,000 to 11.3 mln shares. 6,260 accounts hold the next 23% of shareholding totalling 77.3 mln shares with shareholding of 1,000 to 100,000 shares per account. >

Posted by iska > 2014-12-11 08:03 | Report Abuse

Thanks Rich118 for your contribution. I have also subscribed for the rights. I scanned through the price performances of Bursa property stocks and noticed that GOB's price loss in recent weeks is in line with losses in many small cap property counters, so I am not too worried that it has company-specific risks that i should be concerned about.

Obviously, stocks which are not tightly held by strong holders will lose more in a market-wide sell-off, especially if it's not coupled with a good dividend payout that make longer term shareholders more likely to ride out the storm.

Despite all the worries i have seen expressed about the Malaysian property market, comparing the scene in Malaysia with that in Singapore, I think your property market has better prospects and is safer. Malaysia has a wider geographical mix, and demand could rise with organic population growth. Singapore's demand growth is reliant on immigration, which in recent times has upset many of its citizens. So the continued growth via immigration is a question mark.

I am therefore taking the recent selloff in my stride, and in fact I am looking at other property counters to own (I am keeping my GOB shares of course), spreading my money to companies that perhaps consistently dish out dividends so that i do not have to be solely reliant on capital gains (ie, selling off my shares) for my total returns.

I would appreciate if anyone can point me to good property counters that he/she has looked into and share your insights.

Posted by optimuss > 2014-12-11 08:06 | Report Abuse

----I would appreciate if anyone can point me to good property counters that he/she has looked into and share your insights.



all brainwashed by property 5 yrs bull. the property sector is going into 5 yrs bear. at least. how u gonna find a good property counter?

Posted by iska > 2014-12-11 08:11 | Report Abuse

Btw, re the Vitrox land purchase, i believe there is good reason for the lower price: the lease is for 60 years only, and there are restrictions on its usage.

According to HLB report:

"The asset is subject to 60-year State Lease and shall be used
only for research, design & development, manufacturing of
advance automated MVS & equipment, intelligent robotic
vision system & modules and electronics embedded system
for semiconductor, automotive, electronics, medical and
healthcare industries."

Vitrox is therefore likely to use the land for its own business, rather than develop it for sale. There is also no information on plot ratios, which is a far greater determinant of land value, especially if it is bought for development purpose, as that will affect the GFA and NSA (net saleable area) of a site.

Posted by watchme > 2014-12-11 09:36 | Report Abuse

my preference property counters are KSL, MKH, one with steady recurring income and the other with palm oil estate maturing over years with increasing contribution to revenue, both are trading at very attractive value currently...buy at your own risk....

Posted by watchme > 2014-12-11 09:37 | Report Abuse

another 2 counters are Plenitude with high cash pile and attractive high NTA and Huayang with low PE

Posted by Rich118 > 2014-12-11 09:47 | Report Abuse

Kancs3118: these are the risks I think more pronounced. Will be good if you can provide more insights of your assessment of such risks.

As for the shareholding analysis, you can refer to "Analysis on Shareholding" page of the latest Annual Report.

Iska, fully agreed with your views above.

Posted by kancs3118 > 2014-12-11 10:11 | Report Abuse

@ Rich118, do they have an online website which provides an update of "Analysis on Shareholding" ? Rather than having to wait until the end of the year....

Posted by Rich118 > 2014-12-11 10:27 | Report Abuse

Kancs, no. It does not have such service. But if u look at the line of executive directorship,
Mr Wee was formerly with Pavilion. Mr Ta is only 20+ years old. Without strong backing, do u think a young chap can gain a board seat in the company.

What do you think of the risks I highlighted before ?

Posted by kancs3118 > 2014-12-11 10:30 | Report Abuse

@ Rich118; about the industrial land by Vitron.
My company recently expanded into Batu Kawan (BK). From what i know, the price of the industrial land being acquired approximates the price paid by Vitron. But there is a catch being that construction must be completed within a certain time period, failure of which will incur penalty and the land must be returned to the state at a cheaper price than being acquired. What this means is that you cannot benefit from price appreciation (and will lose) by playing with state land zoned for industrial purpose at BK.

I believe you cannot just compare between industrial land (leased by the state government) versus the typical 99 years leasehold land owned by GOB. The end game is different.

The state government is looking at the investment packages offered by the MNCs and the benefits/ multiplier effects generated by these investments and how the benefit will spill over to the state. The state government will be willing to "lease" at cheaper prices per square feet if the package is deemed to benefit the state economy in the long run. This end game is different compared to GOB who is more than willing to go slow. Like launching projects at BK by phases and increasing the selling price per phase to maximise revenue.

All of it will be good for the shareholders...provided if management takes care of minority shareholders and stop creating tsunami waves in the counter.

Posted by Rich118 > 2014-12-11 12:14 | Report Abuse

Kancs, do you have an idea of where Icon8888 is in this forum? He has been extremely silent, quite strange for a strong proponent of GOB. Don't u think?

Posted by kancs3118 > 2014-12-11 16:49 | Report Abuse

Hi Rich118, do you subscribe for the GOB rights issuance in full? do you apply for excess as well?

Posted by iska > 2014-12-11 17:43 | Report Abuse

Thanks watchme. I will look at the counters your suggest.

Posted by CAF-POW > 2014-12-11 20:19 | Report Abuse

How do we apply for excess, what is the precondition? Anyone? Is it for the people who purchase the GOB-OR from the market and subscribe to the rights?

Posted by iska > 2014-12-12 08:39 | Report Abuse

CAF: i believe if you don't own any entitled rts, but buy rts only from the mkt when they are listed, then u r not entitled to subscribe for excess (this is the ruling in singapore, and i think it applies to bursa too). for those who own bursa rts and hold them in singapore, we simply fill up the form given by the brokers, and fill in the quantity we want to apply for (the ones we are entitled to as well as any excess).

Unfortunately, based on past experience, when we apply for excess rights, we are never given. Perhaps this is due to the broker in singapore "kapo-ing" our successful applications. So i have stopped applying for excess rights.

Posted by goldenshares > 2014-12-12 09:32 | Report Abuse

We expect 2015 property transaction volume to fall by 3-5% on the back of slower economic growth and high loan rejection rate, while property prices to stay flat, as developers will likely have difficulties in passing on incremental costs.

Expect 1H15 transaction volume to fall by 5-10%. We expect overall residential and commercial property transaction volume to fall by 5-10% in 1H15 (vs +2.8% HoH in 1H14) and 3-5% for 2015. The decline should be more severe in 2Q15 immediately after the implementation of GST from 1 Apr 2015. Based on Singapore’s experience, after the GST rate was raised to 7% from 5% in July 2007, residential property transaction volume contracted by 41% HoH in 2H07. We expect the Malaysian market to experience a similar trend

Sentiment hit.

RHB economics team has cut its 2015 GDP growth forecast to 5.0% from 5.3% (vs 5.8% in 2014). The slower economic growth and the recent sharp drop in equity prices are hitting market sentiment. We expect this to dampen the demand for property next year.

Average new sales to drop by 10-20%. We believe both buyers and developers will adopt a wait-and-see attitude, and hence launches and take ups will likely be slow.

Posted by Justin Ngo > 2014-12-12 09:36 | Report Abuse

more information from here
http://www.investalks.com/forum/forum.php?mod=viewthread&tid=9324&page=31#lastpost

Posted by Rich118 > 2014-12-12 10:05 | Report Abuse

Kancs: yes to your questions above. How about you?

Posted by JN88 > 2014-12-12 10:22 | Report Abuse

Property down, stock down and all these millionare will come out sapu .....rich become lagi rich....haiz....If you say malaysia market next year will be very bad i dont think so....
http://www.themalaymailonline.com/malaysia/article/kuala-lumpur-tops-global-rich-list-with-13800-millionaires

Posted by kancs3118 > 2014-12-12 14:11 | Report Abuse

@ Rich118, i applied for the rights. Mind to share what is your average cost for GOB?

Posted by kancs3118 > 2014-12-12 14:13 | Report Abuse

@ Rich118, i am scouring through the prospectus and noted that there are some shitty litigation cases going on involving GOB which are listed in the appendix...what is your opinion? This is the type of shit that make you cannot sleep at night.

Posted by watchme > 2014-12-12 17:38 | Report Abuse

how to make my million back which disappear in thin air over the last 30 years?

Posted by james700 > 2014-12-14 23:35 |

Post removed.Why?

Posted by optimuss > 2014-12-14 23:48 | Report Abuse

icon, i swear its not me. i m serious.

Posted by james700 > Dec 14, 2014 11:35 PM | Report Abuse

Icon8888 the idiot missing ???

Posted by Icon8888 > 2014-12-14 23:51 | Report Abuse

Never suspected you.

Posted by bukithot > 2014-12-15 12:29 | Report Abuse

Icon8888, what is your view on Property counter outlook due to increasing interest rate environment?

Posted by optimuss > 2014-12-15 12:43 | Report Abuse

aiyoyo..

Posted by watchme > 2014-12-15 12:58 | Report Abuse

need to take a break lioa...

Posted by Raymondwood > 2014-12-15 16:58 | Report Abuse

gob at 50sen!!! right issue price!!!

Posted by Raymondwood > 2014-12-15 17:01 | Report Abuse

OR sold = happy; OR not sell = sad.

Posted by optimuss > 2014-12-15 17:33 | Report Abuse

optimuss next year who buy property leh? everywhere lelong properties. ppls buy lelong properties with half-price.

gob cannot perform. dont dream.
11/12/2014 00:03

Posted by ykgykg > 2014-12-15 18:31 | Report Abuse

Less launches likely after factor in the GST .The developers are unlikely to give discount as the interest expenses creep in.

Posted by watchme > 2014-12-15 21:52 | Report Abuse

tomorrow got 53 sell lo

Posted by Raymondwood > 2014-12-16 15:20 | Report Abuse

53 is soon

Posted by sethoylo > 2014-12-16 19:07 | Report Abuse

How to subscribe the right sifu? tomorrow is last day right? too bad I get the OR at 0.12...

Posted by chshzhd > 2014-12-16 22:27 | Report Abuse

i still support u icon8888 n gob!

Posted by chshzhd > 2014-12-16 22:28 |

Post removed.Why?

Posted by kancs3118 > 2014-12-17 11:36 | Report Abuse

i support Icon8888. By the way, i am a chartered accountant and i find what icon8888 said in his posting about GOB makes alot of sense. By the way, i am not his lackey.

Posted by Icon8888 > 2014-12-17 11:38 | Report Abuse

thanks everybody !!!! btw, the world is very big, don't just focus on GOB, shop around for other beaten down stocks

cheers

Posted by dragonking > 2014-12-17 12:10 | Report Abuse

mahsing???

Posted by Icon8888 > 2014-12-17 12:14 | Report Abuse

I would avoid big developer. Property demand soft now. Small developers like GOB can survive as they can survive by booking in RM300 mil sale per annul (peanut, one condo project can rake in that amount). But big guys like mah sing needs to continue to generate billion ringgit of sale. So you can imagine the risk they face

Posted by dragonking > 2014-12-17 12:16 | Report Abuse

I avoid all,,wait until market uptrend,,,can buy load,,,,cash is king man.

Posted by optimuss > 2014-12-17 16:09 | Report Abuse

shame stock GOB. mkt up 18pts also cannot move up 1 cent.

but drop 1 cent.


very very not right leh.

Posted by GoldenShares > 2014-12-17 16:26 | Report Abuse

i heard corporate governance issue, just rumours, don't know whether is true or not

Posted by optimuss > 2014-12-17 16:29 | Report Abuse

collapsed below right issue price....

very fishy...

Posted by GoldenShares > 2014-12-17 16:30 | Report Abuse

for batu kawan exposure, i prefer tambun indah