KUALA LUMPUR, Jan 7 (Bernama) -- Bursa Malaysia’s benchmark index rebounded from earlier losses to close at its intraday high on Wednesday, gaining 0.27 per cent in late trading as buying interest returned to selected heavyweights. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) advanced 4.48 points to 1,676.83 from Tuesday’s close of 1,672.35. The benchmark index opened 0.88 of-a-point lower at 1,671.47 and subsequently hit a low of 1,665.94 during the mid-morning session before gaining momentum toward closing. On the broader market, losers led gainers by 565 to 512, while some 526 counters were unchanged, 1,046 untraded, and 10 suspended. Turnover improved to 2.73 billion units worth RM2.76 billion versus Tuesday’s 2.66 billion units worth RM2.76 billion. Dealers said that investors were cautious following geopolitical developments in Asia.
The Group announced the early receipt of HKD200m from Zhuhai Holdings, being the final of 4 deferred payments from 2014 to 2017 pursuant to its sale of Lamdeal Consolidated and Lamdeal Golf and Country Club Limited to the latter in a HKD1.65bn (RM681m) cash and share deal. This comes as a pleasant surprise given that the amount is not due till end-2017, though very much welcomed toward the strengthening of its balance sheet, while also according shareholders a special dividend. We see the Group primed for sustained growth in the coming few financial years, underpinned by the on-going launches of its affordably-priced properties. We maintain our Outperform call with an unchanged target price ofRM2.08 based on a 30% discount to its fully-diluted RNAV, the lower discount justifiable in our view given the ability of the Group to easily monetize its land bank in the current market environment, relative to its peers.
Recall that the transaction entered into in 2013 was to have been satisfied by 1) HKD500m in cash, 2) HKD300m for 225.5m shares in Zhuhai Holdings at HKD1.33 per share (LBS has since sold some 1/3 of its shares at prices ranging between HKD1.40 and KHD1.75 each) and 3) HKD850m of promissory notes, with the following settlement schedules:-
| Tranche | HKDmn | Remarks |
| 2014 | 250 | Settled |
| 2015 | 200 | Settled |
| 2016 | 200 | Received 16 March, 2016 |
| Total | 850 | Received 3 June, 2016 |
A bulk of the proceeds will be utilized to pare borrowings (HKD123.8m of RM66.3m) while about 30% (as planned) will be paid out as a special dividend (HKD65m or RM34.8m (6.2sen per share)).
Big plans in China. Local government approvals are being procured to upgrade and transform the racing circuit land it still owns into an integrated tourist attraction. On it will be a commercial mall, an exhibition hall, a sports center and a hotel, all built in the vicinity of the racing circuit which will be maintained. The upgrade will also include a Melaka cultural museum, a one-stop tourist center and exhibition hall.
LBS does have various options with regard to the land. Offers are already on the table, partnership with a China-based developer to jointly develop the land parcels amongst one of them. An outright sale has not been entertained as yet, though is not ruled out either. Conservatively ascribing the similar selling price which was transacted in 2013, the 264-acre parcel is worth some RM411m to shareholders of LBS, close to half its current market capitalization.
Source: PublicInvest Research, 06 June 2016
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