Tuesday, 11 November 2014
Tambun: Land Acquisition Terminated
Tambun Indah's share price falls for 7 consecutive days from RM2.46 to RM2.18. Now it looks like there is a reason behind it.
Today Tambun announced that it has terminated the SPA to purchase 209.5 acres of land adjacent to its Pearl City from TPPT, due to "non fulfillment of a condition precedent".
I wish I can know the exact reason.
It is expected to get the refund of RM15mil deposit paid earlier within 21 working days.
Its share price will surely take another beat tomorrow.
TPPT land south of Pearl City - cut by 2 power transmission lines
The proposed land acquisition was first announced in June 2014. The land was supposed to be acquired at RM150mil or RM16.50psf.
Surely all shareholders will be disappointed with the termination of this land acquisition. However, Tambun still holds the largest landbank in Penang. It still has over 400 acres with estimated GDV around RM3bil left to develop in its Pearl City.
So the termination of land acquisition from TPPT will not affect Tambun's earning in the next few years.
Nevertheless, analysts from investment banks will surely revise Tambun's target price downward from RNAV point of view.
I will keep my target price as its top & bottom lines will not be affected. The only concern is how much property sector will slow down next year.
Straits Garden progress - early Nov14
After the termination of this SPA, Tambun might be able to return to net cash position soon. Hopefully it will keep looking for more strategic land.
Tambun will announce its FY14Q3 financial result this month, and it might as well declare an interim dividend at the same time.
I hope that its latest quarter PATAMI can stay around RM25mil.