Stevent Hee

Author: StallionInvestment   |   Latest post: Mon, 13 Jul 2020, 12:11 PM


What do i see in Iwcity

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Government to Reinstate Bandar Malaysia Project

Source obtain from https://www.pmo.gov.my/2019/04/government-to-reinstate-bandar-malaysia-project/

he project is expected to generate tremendous impact on urban development for Malaysia drawing foreign direct investments and generating an expected gross development value (GDV) of RM140 billion.

It will draw major international financial institutions, multi-national corporations (MNCs) and Fortune 500 Companies to locate their regional headquarters in Bandar Malaysia. In addition, tech giants such as Alibaba and Huawei have also manifested interest to establish their ICT centres.

In line with the Government’s policy of ensuring that such a development will be people-centric and will add substantive value to the economy, the project will include the construction of a People’s Park, 10,000 units of affordable homes, Bumiputra participation throughout the project, and priority for the use of local content in the construction process.

These measures will no doubt add further value to the economy via substantive job creation, acceleration of retail and institutional demand for commercial and residential space, moving SMEs up the value chain and stimulating demand for Malaysian produced construction materials, technology and home-grown talent in advancing sustainable urban growth.

The Government welcomes the commitment by IWH-CREC to make an advance payment of RM500 million in addition to the original deposit sum of RM741 million to be paid within sixty (60) days from the date that the Government officially reinstates the project. 

Suppose to 19 Jun 2019.

Bandar Malaysia will be a trailblazer in urban planning, being a transit- oriented development (TOD) that will optimise the amount of residential, business and leisure space and contribute 
towards a greener environment by facilitating and incentivising the use of public transport over private vehicles.

In an international open tender exercise participated by over 40 world renowned companies, including from Japan, Australia and the Middle East, the JV to take up 60% of Bandar Malaysia Sdn. Bhd. was awarded to a consortium, IWH- CREC Sdn. Bhd. (ICSB).

Like the ECRL, the Bandar Malaysia project should be viewed within the larger context of fostering and cementing long-term bilateral relations between Malaysia and China while ensuring that such projects add maximum economic value to the country. These two major projects will also be a significant contribution to the Belt and Road Initiative which Malaysia expects to be able to tap on and exploit its multiplier effects along the value chain.

It should be stressed that the principle of integrity, accountability and transparency will remain paramount at all times. No corruption or any form of shady deals will be tolerated. This approach will prevent leakages, questionable dealings and abuse of power and will translate into massive savings for the government.

Above is information obtain from PMO official statement.

Let take iwcity for a study. When announce bandar malaysia revive , it shoot up as high as 1.28 then drop back to near to 0.715 level and drop it rebound to 0.94. If this is a sure thing, then it not suppose to go below 1.00 earlier even due to trade war issue because this got nothing to do with trade war. Logically said that, it should have mild pull back or even move against the downtrend to go higher. What we are seeing here, there is nearly 46% pullback which technically to say that it successful wipe out all those retail client who don’t have holding power or afraid strong pull back. 

Why am I saying iwcity is trading grade stock instead of investment.
1. ICSB suppose to pay downpayment to government. If you are property buyer, you want to secure a unit before other take it, what will you do? Pay the booking fees first, am I right? So, why are they not paying the booking fees till now?
2. Does China counter party facing any cash flow problem due to recent trade war? We got no access to China JV company to evaluate their financial status, so this is question which you guy need to think about it.
Some google search related to CHINA JV COMPANY for your own study.
3. Earlier offer by Ekovest to buy offer Iwcity at the price 1.50 but this offer being rejected which mean major shareholder think it just worth this much and why don’t the the major shareholder bought it back and hold it strong when ppl are selling much lower price at 1.50?
So, which mean big player only willing to offer at this price but not more than this.
4. Entire bandar malaysia project take 15-25 years to complete. So long duration and many uncertainty. Earlier before the cancellation of bandar malaysia. Iwcity it went up as high as 3.30 due to some one claim that that it worth this much. Crazy analyst who give such target price base on fundamental. You see nothing yet and you give such price for 15-25 year project. This so call target price is taking into consideration entire project completion. So, at any point of time, iwcity I personally don’t think it worth more than 2.00 even there is resumption of the project. 
5. On top of that, bandar malaysia costing between the JV company need to renegotiate within 60 days. Does the top management reach the mutual agreement, did they make a public statement saying that they are optimistic with this project and they will do so? Just google to find it yourself. 
Base on above point of view, I would categories iwcity under trading grade instead of investment grade.
Disclaimer: above is my personal point of view, does not solicit any buy sell recommendation. Trade at your own risk
Telegram : https://t.me/steventhee628


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Chris Khoo Steven, its either CREC want to pay or dont want to pay...compare to those mega projects in China, Bandar Malaysia is too small and CREC only holding 40% of the IWH-CREC. And since revival of Bandar Malaysia has been openly blessed by leaders of China and Malaysia, there will be no issue on additional additional deposit of RM500mio

Moreover, RM741mio has been paid earlier. RM500mio is obviouly a small amount for IWH-CREC. The delay of announcement on payment most likely not due to available of the fund, instead, the mechanism of how to cooperate and profit sharing structure!

Many worries by trader / speculator / gambler, in substance is not about the payment! But (1) fluctuating price due to previous few u turns (2) whether IWCity will benefit from the BM as previous announcement denied so!
12/06/2019 5:27 PM

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