Tuesday 14 June 2011

Tambun: Generous Dividend


Tambun Indah on 9th Jun 2011 annouced an interim single tier dividend of 4.6 sen (tax-exempted!), which translates to 6.5% yield at share price of RM0.705. No wonder its share price shot up just before the annoucement.

From Tambun Indah's IPO prospectus, it promises to pay between 40-60% of its net profit as dividend. Analyst projected a dividend yield of 7%. Now only after Q1 Tambun Indah already gives out 6.5%. How about the final dividend then?

However, for a company set for growth, sometimes it is not so good to splash the cash to shareholders as dividend. Shareholders may hope that they use the money to expand its business, buy more lands etc. But who really care?

Tambun Indah's current flagship project - Pearl City in Bandar Tasek Mutiara Simpang Ampat has gained quite good response. It plans not less than 4500 units of residential + commercial properties in Pearl City and to date about 800+ units launched with take up rate I estimate almost 90%. Previous launch since end 2009 are Pearl Garden & Pearl Villa (700+ gated guarded residential unit) and last month Pearl Square (100+ commercial unit). Next to come very soon is Pearl Indah 2ST (non gated/guarded) which should be quite affordable to the general public.

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