Plenitude has two major potential profit contributors – property development and hospitality.
Property development has been contributing to the bottom line, even in the 2020/21 pandemic years. With the opening of the economy, I expect the contribution to be better. The property development segment was the major contributor to the Group’s performance.
Plenitude started as a property developer but in 2001 diversified into the hospitality business. Today the hospitality business is the largest segment in terms of the Total Capital Employed. But it was not profitable since 2013.
The hospitality segment’s poor performance was due to competitive pressures. The Group had refurbished and rebranded the hotels to address this. At the same time, it had also focused on efficiency to improve the margins.
There are signs that gross profit margins are improving but the jury is still out on whether revenue will improve. The hospitality business is a turnaround case. Because of its size, the creation of shareholders’ value will depend on a successful turnaround.
Good QR overall. Plenitu also did well in preceeding quarter. Assuming this is more of a norm moving forward, current price of1.24 is still too low. It should at least be worth 2.00.
One of the three LRTs radiate out from JB Sentral (RTS terminal) will proceed all the way to Impian Hills, has a station at Tebrau City. Both Tebrau City and Impian Hills are developed by Plenitude.
So what should be the impact on Plenitude share price?
I am holding Plenitude share below rm 1.00 Will hold it at least until RTS is ready. If LRT really take place and has a station at Tebrau City, then will hold the share until that LRT become operational.
Plenitude is the most valuable hidden gem in Malaysian property counter due to extremely low land cost. Very good FCF. Very capable and credible BOD. Very solid major shareholders.
To make 50% profit from this counter within 6 months is sup sup water.
Don't miss the forest for an old tree. Just look at the probability of making 50% profit from Plenitude vs 50% profit from a grossly overpriced stock (from 4 ringgit to 6 ringgit). Weigh the risk of losing big when you only see a table-size cookies drawn in the air.
Plenitude will continue to make good profit from property development as land cost is extremely low. Hotel operations are just addition toppings. More important considerations are the sustainable property development over many more years into the future and the strong cash flow.
Hotel business's revenue increase almost to half generated in property development.. its strategic investment and divestment into the hospitality business in Malaysia, Japanese and Korea is paying.. Inbound Tourist into all these country been exploding in recent years.
Latest QR no good due to write off 13.9 million impairment upon disposal of a subsidiary. No idea which subsidiary was sold as there was no Bursa announcement. Also make me puzzle why there was 20 million increase in administrative charges which no increment in revenue. Any how net profit was 16.7 sen compared with 11.5 sen for previous year. Believe Plenitude will still declare 4 sen dividend by 20 Sept.
The Group registered a revenue of RM134.3 million and net profit of RM0.5 million for the current quarter ended 30 June 2024 as compared to revenue of RM131.2 million and net profit of RM19.9 million in the corresponding quarter of the previous financial year. The lower profit recorded in the current quarter was due to provision of an impairment loss on assets held for sale of RM13.9 million resulting from the disposal of an indirect wholly owned subsidiary company.
The performance of Plenitude over the past decade was nothing to shout about with an average ROE of 4%. But this was because not all its cylinders were firing. Plenitude had 2 main businsses – property development and hospitality.
The hospitality business used up about half of its capital. For most of the time over the past decade the hospitality business delivered losses. The profits for the group were contributed by property development.
But over the past 8 years, the group had been refurbishing and improving the operating efficiency of the hospitality business. Then in 2023, this business began to deliver profits. I would expect growing contribution from the hospitalilty business.
Can you imagine the potential returns when both property development and hospitality pull their own weight? I think the market price has yet to reflect Plenitude’s turnaround.
When both property development and hospitality pull their weight and contribute to the bottom line, I would expect significant improvement to the return. The profitability picture as well as its strong financial position suggest that Plenitude is not a value trap. --Dato Eu
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....
frankco
195 posts
Posted by frankco > 2021-10-13 12:22 | Report Abuse
Price on uptrend in wave pattern .. hold tight.