Hotel Division Riding on the momentum and recovery of the Hotel Division over the last two quarters, the division is expected to deliver its result in Financial Year 2017/2018.
Intensified efforts to innovate, improve our sales and marketing strategies are showing the desired results.
In addition, attention was given to yield, productivity and excellence in its services. The opening of Avillion Cameron Highlands in the 4th Quarter of Financial year 2017/18 will contribute positively in the final quarters.
The Group will continue to pursue new management contracts by leveraging on its internationally recognized hotel brand.
The division is eagerly awaiting the launch of Phase 2; Desa Impian once the issues related to subdivision of the land is resolved with the State and Local Authorities. This will further enhance revenue and cash flows to the Group.
Jalan ampang zouk Club land, previously owned by Bolton Bhd, is now owned by Daim’s family, but many are not aware that RPB also owns a substantial interest in the property.
RPB had acquired a 40% stake in Menara Ampang from Daim’s family for RM36.4 million. However, the announcement, which did not say Menara Ampang owned the Zouk land, went largely unnoticed.
The major shareholders of RPB are chairman Datuk Gan Eng Kwong and his wife Datin Irene Tan. Others include Daim’s family vehicle, Ibu Kota Developments Sdn Bhd, and Datuk Mukhriz Mahathir
The company has been loss making for the past 12 quarters. All its 3 main segments have been reporting weak results for the past 3 financials years. The group luxury hotels and resort brands has won a lot of recognition but in terms of financial performance, it still fails to record any profit due to the low occupancy rate outside of the holiday period. The biggest revenue contributor to the group is still the travel agency business (which mainly focus on Singapore and HK markets) but has seen revenue decrease year on year as the numbers of Chinese tourist has fallen since its peak recorded in FY16 (even then it fails to make any profit). The group decision to focus on the Johor property market will take some time before it will be able to deliver any profit to the shareholders given the overall weak market sentiment.
Currently the company is using short term debt to fund their operations. Given the upward interest rate trend, future financial performance of the group might be affected in the near term (need to pay higher interest rate).
That being said there is value in the company’s properties. As of Sep 18, the company has an NTA of RM0.29 per share. But most of its properties and lands has yet to be revalued to the current market price. Take the 25 acres Port Dickson land (for property development) as an example. The land was last valued in 2004 and now carries a value of RM100mil (should have more than double in the past 14 years). If all the lands are revalued (those in KL especially), NTA has the potential to be more than RM0.50 per share which means the company is currently trading at less than half its potential book value. However, investors might need to have a longer investment horizon before these land value can be unlocked (via direct sales or via property development projects).
If you are looking to diversify your portfolio outside of Avillion (due to the earnings uncertainties from its hotel, travel and property businesses), I would recommend you to look at MBMR.
MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.
For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.
Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.
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....
choop818
707 posts
Posted by choop818 > 2016-08-18 11:58 | Report Abuse
Run!