Keuro is a deep undervalue RNAV play, here is my simple calculation:
1.)WCE concession - refer to IJM -CIMB Research report dated 25.04.2014 pg.4, the value of WCE concession(20%) is 485.2 m,which turn into 1,948,000,000(80%) for Keuro stake.
2.)Rimbayu land value -19.03.2014 Ecoworld bought Rm35/sq ft for a piece of LEASEHOLD land at K.Kemuning, which mean the land value of Rimbayu should be 35 x 1879 x 43560 = 2,864,723,400 ; Keuro have 28% effective share holding at Rimbayu, so the share value should be 2,864,723,400 x 28% = 802,122,552
3.) Talam Transform share - 1,143,169,550(as at 03.06.2013) x 0.10 = 114,316,955
the total value of Keuro : 1,948,000,000 + 802,122,552 + 114,316,955 - 22,652,000(net loan as at 31.01.2014) = 2,841,787,507
fair value of Keuro = 2,841,787,507 / 572,991,765(share issue as at 25.04.2014) = RM4.96 per share.
conclusion - IJM share close at RM 6.39(22% discount to RNAV RM8.18 - as per CIMB research),SAB share close at RM 5.63 (39% discount to fair value RM 9.20 - as per Public research),GADANG share close at RM 1.88 (30 % discount to T/P RM 2.67 - as per JP Apex), MRCB share close at RM 1.61(36% discount to RNAV RM2.50 - as per CIMB research) .How much discount to Keuro you give?
note that Keuro will have to fund the Wce.....first rights issue, then the traffic projection have to come through, the actual money is in the construction in the shorter term and IJM will be main beneficiary, and lastly this project has bedeviled us for more than a decade and thr rights have been postponed to end of year. There seems to be a problem with funding.
Further to our announcement made on 23 December 2013, the Company wishes to announce that the Government of Malaysia (“GOM”) has vide its letter dated 19 May 2014, approved the appointment of a consortium comprising of IJM Construction Sdn Bhd and Kumpulan Europlus Berhad (known as the “Consortium IJMC –KEURO”) as the Turnkey/Engineering and Procurement Contractor for the construction of the West Coast Expressway (“WCE”) project for a fixed sum contract not exceeding RM5.044 billion.
The appointment of the contractors for the construction of Sections 1,2,6,7,10 and 11 of the WCE project, at a cost of RM2.216 billion will be on an open tender basis in accordance with the Concession Agreement dated 2 January 2013. An independent costs consultant approved by the GOM will be appointed to verify the costs of these Sections.
Simultaneously, the GOM has approved the appointment of IJMC as the contractor for the construction of Sections 3,4,5,8 and 9 of the WCE project at a cost of RM2.828 billion which will be verified and confirmed by Lembaga Lebuhraya Malaysia (“LLM”).
None of the Directors or major shareholders of the Company, or persons connected with them, has any interest, direct or indirect, in the said appointment, save and except for IJMC which is a wholly-owned subsidiary of IJM Corporation Berhad, which in turn is a major shareholder of the Company.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
thesteward
6,781 posts
Posted by thesteward > 2014-03-05 22:12 | Report Abuse
tomorrow break rm1.30...possible