KUALA LUMPUR, March 30 (Bernama) -- Bursa Malaysia’s benchmark index closed lower today, in line with most regional markets, as investors adjusted their risk exposure amid spiralling oil prices driven by the ongoing West Asia conflict, now in its second month. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) retreated by 24.75 points or 1.44 per cent to 1,687.90 from Friday’s close of 1,712.65. The market bellwether opened 10.57 points weaker at 1,702.08 and fluctuated between 1,682.79 and 1,702.38. The broader market was bearish, with decliners thumping advancers 956 to 371. A total of 373 counters were unchanged, 1,042 untraded and 134 suspended. Turnover expanded to 3.98 billion units worth RM4.85 billion from last Friday’s 2.97 billion units worth RM3.25 billion.
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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