Saturday, 17 December 2011

IJM Is Coming To Town

You better watch out, you better not cry, better not pout I'm telling you why, IJM Land's first project in Bukit Mertajam - Permatang Sanctuary is coming to town. 

Permatang Sanctuary is developed on a 130-acres freehold land at Alma area near Permatang Tinggi. It is a guarded but not gated neighborhood consists of 488 units of 2-storey linked semi-ds, 188 units of 2-storey semi-ds, 134 units of linked bungalows, 10 units of bungalows, a row of shoplots and low cost apartment. Phase 1 is made up of 78 units linked semi-ds and 92 units semi-ds. So far only part of phase 1 is open for sale.

      Permatang Sanctuary location

A special feature of this project is the retention pond in the middle of phase 1. The retention pond area is originally a playground with grass, but when it rains, the rain water will fill it up to become a pond.

      Retention Pond

From the brochure, the land size of linked semi-d is 32.8 x 82 ft, built-up 20 x 47 ft. For the semi-d, the land size is 32 x 98 ft, built-up 22 x 48 ft. I am not sure whether these are the standard land size or not. The price of  linked semi-d starts from RM438,000 while the semi-d starts from RM 485,000.

      Floor plan

There will be RM20,000 discount for early buyers and all the stamp duty, legal fees and disbursement are fully borne by developer (Zero Entry Package). Booking fee is RM10,000 and the rest of the 10% will be paid upon signing of S&P.

Alma is an area which sees lots of residential and commercial development at the moment. Nevertheless, the  concern for Permatang Sanctuary is the nearby broiler farm, which is just adjacent to its phase 1 development. No one will know exactly how it will affect the area until one start to live in there. Nearby Desa Impian 2 by Asas Dunia is also surrounded by a few broiler farms, but the sales is still good.

     AEON Jusco Alma site: land is already cleared

IJM Land does not provide Permatang Sanctuary's site map in their brochure and website yet. I just simply sketch the site map base on what I can remember from the showroom. However, this map is not very accurate and may be wrong.

      Possible site map, future phases will be further from chicken farm

From the sales chart, it seems like not many units are left in Day 1 except the bumi lots. All those with standard land size have been grabbed in the morning hours itself. Is it the IJM factor?

Friday, 16 December 2011

Who Gets Sungai Nibong Kecil?

Bayan Baru and its adjacent Sungai Ara are exploding with new property launches for the past few years, and the trend will very likely to continue into 2012, amid global economy uncertainty.

I notice that there is a big piece of "interesting" land opposite Bukit Jambul complex. This is a Malay village called Kg Sungai Nibong Kecil. Its location is quite strategic. I guess it will surely be developed in the near future. Which developer will be so fortunate to acquire this land?

    Sg Nibong Kecil site

Back in year 2009, it was reported that Hunza has acquired a 42-acre land at Bukit Jambul area. It seems like it might be the Sungai Nibong Kecil land. Today after its AGM, Hunza says that it will submit the development plan to the local authorities next year for a mixed-development project in Bayan Baru with a GDV of RM6-7 billion. This time it is mentioned that the 16.2 ha (= 42 acres) land is opposite Bukit Jambul complex. So, pretty sure that it is Sungai Nibong Kecil.

     BJ Complex - once a penangites popular mall, now a foreign workers heaven

The land is currently sardine-packed with many squatters homes (around 800). Thus it will not be easy to relocate all of them. Hunza says today that it has acquired 2ha out of the 16.2ha to develop 1000 units of low-cost homes for the affected households. This is yet to be approved.

It is believed that Hunza will build a mall, performance arts centre, hospital, international college, amusement park, 2 hotels (3 and 5-star) and serviced apartments on this precious land. It is earlier reported that the land acquisition cost is at about RM200 million inclusive of transaction cost, squatter compensation and land conversion costs.

RM200mil for a GDV of RM6-7 bil! What a business!

So this land has gone. Probably the last piece of prime land in Bayan Baru area is the one between PISA and Sunway Tunas. Who actually owns it?

Wednesday, 14 December 2011

Xinquan: How Low Can It Go?

XingQuan held its 3rd annual meeting on 2rd Dec 2011. Immediately after this day, XingQuan's share price has tumbled 23% in just 7 trading days!

If we look at the financial results, XingQuan is a very attractive company. Its revenue and profit keep on increasing each year since being listed. It has a lot of cash and little debt. It is expanding its business well in China. However, like all other China stocks in Malaysia & Singapore, the share price does not perform like it should be.

XingQuan was listed in Bursa back in mid 2009 with a retail IPO price of RM1.71. Yesterday, it closed at RM0.68, down 60% from its IPO. How can this happen to such a "great" company?

As most of us know, Malaysia's Warren Buffet Mr KYY also holds 11% of XingQuan's shares.

Why XingQuan's share price suffers sudden fall recently after the AGM? If we check the announcement made that day, we can see that its 2 non-executive directors age 61, who are also members of audit committee retire, replaced by 2 young bloods. Are those 2 new fellows notorious for something? We can also learn that the CEO is ambitiously talking about the great financial performance and expansion plan of  XingQuan.

Is it because of fraud in its account?

     Can we trust this face?

Like all China based companies, the accounting fraud issue is a real concern. XingQuan is known for its low dividend payout, which is only 10-20% of PAT. For such a cash-rich company, this makes investors puzzled. Perhaps China-man are all "kiam siap"? In Aug 2011, it even proposed new issue of security to raise more fund. Money not enough? From XingQuan's most recent quarterly report, it has cash of RM400mil and bank borrowing of only RM38mil!

With the current share price, XingQuan's PER is well below 2. Cheap isn't it?

With such a sharp fall, I think its share price will rebound to some extent, and may continue to drop if bad news emerge. Speculators may want to catch this falling knife, but don't catch the blade and hurt yourself. Timing is key.

Anyway, what is the actual reason for its recent drop?

Friday, 9 December 2011

HaiO Buys Itself

I notice that HaiO has been busy buying back its own shares since end of March this year. Recently the share buyback is carried out in almost daily basis. Is share buyback good for investors?

Share buyback or share repurchase refers to a company buying its own share from the stock market, either through open market or tender offer. It means that the company actually invest in itself. The shares that have been bought back are usually kept as treasury shares.

A company carry out share repurchase for a few reasons:
  • When it feels the company is undervalued in the market
  • To reduce the outstanding shares in the market, thus increasing existing shares value
  • To reduce the threat of company being taken over by others
When the number of outstanding shares is reduced, then earning per share (EPS), dividend per share etc will increase. This is good for the shareholders as the value of their shares increase with each share repurchased.

Treasury shares (treasury stock in US) have no dividend nor voting rights. Some companies will create some treasury shares upon listing so that it can raise fund easily in the future. The treasury shares can be either cancelled (retired), sold or used for employee share scheme.

For HaiO, its share price has tumbled from about RM4.50 to RM1.78 for the past one and half year. From the period of 29 Mac 2011 to 8 Dec 2011, HaiO has bought back 650,700 shares from open market, to increase its treasury shares from 2,544,688 to 3,195,388.

HaiO's net profit drops by 60% for FY2011 and it seems to have stabilized. I am not sure how well its network marketing is doing now. If it is improving, then the company's earning should improve as well.

HaiO is going to announce its FY2012Q2 results soon. Can it make a U-turn from here?

Thursday, 1 December 2011

ACE IPOs 2011: Wrong Timing?

This year as we know there are quite a lot of bad IPOs in the ACE market. Some of them even make loss after listing, especially XOX. From a total of 11 of them, only 2 register a current share price higher than their IPO price, which are Asia Media and Boilermech. Is it too easy to get listed in the ACE market?

Share Price Latest Q profit

IPO Price 30Nov Price Change % RM ' 000
Amedia 0.23 0.290 26 3400
Mpay 0.16 0.155 -3 -780
Smartag 0.31 0.260 -16 -907
Boilerm 0.33 0.770 133 3626
Mclean 0.52 0.175 -66 307
Ijacobs 0.27 0.190 -30 434
Xox 0.80 0.245 -69 -6536
Inari 0.38 0.375 -1 3959
Catcha 0.75 0.620 -17 -2274
Plabs 0.30 0.145 -52 358
Idmensn 0.38 0.275 -28 78

Masteel: On the Right Track?

For the period of July-Sep 2011, most of the Malaysia's steel companies are still facing a hard time. They are either making loss or earning less for the quarter.

Masteel is the last to announce its 2011Q3 earning, guess what, it's a decent one.

For the period mentioned, Masteel's net profit surged 240% YoY and 5% QoQ to RM300mil and RM16.2mil respectively, though its revenue fell 5% QoQ. For the first 3 quarters of 2011, Masteel's revenue and profit rise 29% and 97% respectively.

Since Masteel-KUB joint venture for commuter project in Iskandar area get the green light from the state government, Masteel announces that it has held a series of meeting with the PM, ministry of transport and KTM. Their next meeting is scheduled in the first quarter of 2012.

KUB (in which our finance minister owns 22%) just recorded loss in the most recent quarter.

RM mil 2011 (Jul-Sep) 2011 (Apr-Jun)
Rev Profit Rev Profit
Lion 1327 30 1481 48
Ssteel 734 16 903 50
Ann Joo 625 -24 555 33
Kinsteel 404 -26 485 -21
Perwaja 356 -16 382 -15
Masteel 300 16 338 15