NWP Holdings Berhad (NWP - 5025) is currently known for it's timber products in Sabah, carrying more than 15 years of history of operation. NWP also offers klin drying, timber treatment, contract logging and contract saw-milling services. While the local timber industry is growing rapidly for the past 1 year with the likes of Focus Lumber, Mieco, Evergreen and Hevea, NWP had been at the darker side of the boom. However, the latest development in the entry of new shareholder could start to spark a new lease of life for NWP.

Dato Seri Nelson Kee

The consortium of Dato Seri Nelson Kee and Marcus Mak from GS Realty Sdn Bhd had altogether took up a combined stake of 17.73% in NWP. Unofficial number would suggest that Dato Seri Nelson Kee with the key team leaders from GS Realty could see more than 30% in controlling stake of NWP.

GS Realty Sdn Bhd is a no stranger in the realm of the real estate market in Malaysia. Started humbly from a corner shop in Mahkota Cheras more than 5 years ago, to date, GS Realty headquarter is situated at Fraser & Neave Business Park at Jalan Loke Yew, with branches in all over of Malaysia.

In the beginning, GS Realty started out in the sub-sales market. However, with the rapid growing property market for the past 4 years, GS Realty had worked with a good number of developers for the sales and marketing of their new under construction properties.

GS Realty is prime sales and marketing to several branded developer such as i-Bhd, Hatten City and KSL, just to mention a few. Albeit the property market condition, GS Realty had achieved a total RM 11.7million sales commission for the month 31st May 2016 (Average of RM 585 million in sales value based on 2% commission). As of to date, there are more than 18,000 agents in GS Realty.


Bringing Real Estate to another Level

It had been the dream and vision of Dato Seri Nelson Kee to bring the arena of real estate into another level. The usual practice of most real estate firm will be focusing on sub-sales market and new development properties that are built by developers. For a real estate agency to be able to sell their own property project is another new level altogether.

While doing so, retaining key people will be utmost important in the real estate industry. With GS Realty owning a public listed entity, this will enable key leaders as well as key sales people to have the opportunity to be part of the owner of the company through shareholding.

With NWP being the public listed vehicle for GS Realty, there will be great beginning and interesting journey ahead.


NWP to see corporate exercise and joint venture

NWP could be looking to see more corporate exercise in the coming days. While balance sheet of NWP is quite clean with borrowing of less than RM 1million, we could be looking at right issue with free warrant as a mean of raising fund for new land acquisition as well as working capital at 2H 2016.

NWP will also be able to see joint venture opportunity with developers for their new launch project, such as i-Bhd.



On a technical outlook, NWP could be looking interesting with a potential breakout on an ascending triangle that could see saturation at RM 0.40 level. A successful break out at the key level of RM 0.40 will then be able to see NWP trading towards RM 0.50.

Although the current fundamental of NWP doesn't support the current price valuation, however, the current changes in the shareholding, foreseeable corporate exercise in raising working capital and for new acquisition as well as new business direction from a proven team of management in GS Realty could breath a new lease of exciting life in NWP.

While on a wild thoughts, should cash cow GS Realty Sdn Bhd be injected into NWP, that will definitely cause a market frenzy. Who knows?

Bone's short term TP : RM 0.50

WZ Satu Berhad (WZSatu - 7245) had been running under the spot light lately as corporate announcement are knocking on the doors in packs. The steel player had saw much diversified business with the emergence of strategic shareholder, which saw new businesses in large infrastructure construction (Highways, Bridges and Sea Ports), as well as mining concession in bauxite extraction.

When royal meant business

The rise of WZSatu is much attributable to Dato Sri Tengku Uzir bin Tengku Dato Ubaidillah, which is the executive chairman and CEO of the group. DS Tengku Uzir had been buying back shares of WZSatu from the open public since 2014 even at the peaking heights of RM 2.70 before the bonus issue. The latest sighted buy back from DS Tengku Uzir saw his stake growing to almost 25%. (Excluding warrants)


We would reflect that DS Tengku Uzir consistent buy back despite of the fluctuation price in the open market will be a good sign of confidence that there will be even greater event and future that is set in for WZSatu.

WZSatu going strong in infrastructure construction

It is notable that WZSatu only had appetite in infrastructural construction, especially on highway.
Last year, WZSatu had bagged in a RM 499 million worth of highway construction contract from IJM for a 26km stretch in the WCE. Other notable contracts that are bagged in during year 2015 will be the RM 124 million elevated bridge structure over Bayan Lepas from UEM Construction as well as a RM 58.22 million contract for extension work in Kuantan Port expansion project from Fajarbaru Builder.

For 2016,  WZSatu started to add on to it's book order with RM 65.37 million RAPID contracts (RM 46.75 million for installation of pipes and fittings, and RM 18.62 million for pipe spool pre-fabrication) and a RM 43 million highway upgrade work at Perak (Teluk Intan - Kg. Lekir) for 24 mths, commencing 10th June 2016.
The total book order is currently standing at a healthy level of RM 790 million.

We expect WZSatu to be able to clinch more construction work in the 2H of 2016, especially for highway packages from DASH, SUKE, EKVE and SKVE. Aside from contract in the peninsula Malaysia, WZSatu had formed a JV with PKMM Bina Sdn Bhd to bid for a portion of upgrade work in the Pan Borneo Highway.

Barring unforeseen circumstances, familiar sources are optimistic on WZSatu pushing book order near to RM 1 billion by the end of 2016.

WZSatu Silk Road

The latest announcement of the sale of Silk Highway to WZSatu had received mixed reaction from the public. While the Silk Highway had yet to see positive operating cash flow, it would soon become a silk road for public in the mere future with emerging township new township in Bangi, Semenyih and Kajang.

Adding the highway into the group asset portfolio will definitely open up window of opportunity for cornerstone investor in the future when the highway become profitable. This could be one of the core reason in the consistent open market buy back from DS Tengku Uzir.

The latest stint in the local Malaysian market had saw a change shift of appetite in EPF investment style, with preferences towards company with steady revenue such as highway concession. Ekovest had been tipped off in the market on EPF buying in due to it's DUKE highway concession and DUKE Extension, which is a core reason that saw Ekovest share price appreciated greatly.

SILK highway resemble a gem that is going to be uncovered in the future. When it turn profitable under the belt of WZSatu, the company will definitely see a great re-rating on share price valuation.

Although the share price chart will reflect WZSatu trading on a long term declining trend, we would like to point out on a possible turnaround event on WZSatu as the stock had broken away from a long term resistant line as highlighted in green.
The possible rebound will be backed by
- Project Book Order of RM 790 million secured in 2H 2015 until current 1H 2016.
- Restart of bauxite mining activities in 15 July 2016.
- Potential corporate exercise for fund raising activities in future for asset purchase.

WZSatu will be an interesting company to be looked out. Beside it's growing construction business, we continue to see bullish demand in the global need for aluminum, which raw material is bauxite. WZSatu will be able to see a restart in Bauxite Mining after 15th July 2016, where the extended ban will end.

A short term outlook will see WZSatu hitting a possible RM 1.20, with a longer term outlook at RM 1.50.

Bone's TP : RM 1.20

Superlon Holdings Berhad (Superln - 7235) had a history dated back to 1992, where the company started it's venture dealing with nitrile butadiene rubber (NBR) foam, a core insulation material. In 2007, Superlon became public listed in the second board, raising RM 8.9 million from the IPO. Till date, Superlon is carrying a market capitalization of approximately RM 160 million after 9 years of public listing.

However, a detailed analysis on Superlon saw the company started to pick up on revenue during 2014, which had lasted throughout 2015, and doesn't seem to see any stop in 2016 as well. While the global market remain challenging due to volatile raw material prices as well as currency fluctuation, what is the strategy that Superlon is going to employ to ensure the continuation of the growth of the company ?

Growing with the Asian Market

The Asian market had saw much accelerated growth for the past 5 years. Emerging market continue to boost industrial output and consumption due to rapid infrastructure development. According to Transparency Market Research, the insulation (fiberglass, plastic foam, mineral wool) market for residential construction, industrial, HVAC as well as non residential construction appliances will see a CAGR of 8% between 2014 to 2020. The market is projected to rise to USD 64.91 billion in 2020, in which much of the growth will be focused in the Asian, especially the emerging market. While Fiberglass will account for more than 42% of the overall insulation material, following tightly behind will see Plastic Foam, which is almost 40%.

Due to the rapid development of the property and construction segment in the emerging Asian market, there had been massive spillover effect into the demand on building's facilities work. As for Superlon that provide solution and services related to the HVAC & R (Heating, Ventilation, Air-Conditioning & Refrigerator), it will resemble one of the main beneficiaries from the continuation of this growth. With the rising demand for air-conditioning from building to heat and sound insulation of the passenger car, Superlon is well positioned currently to capture this growing market.


One of the proven beneficiaries from the rising development of property and construction sector is United U-Li Corporation Berhad (Ulicorp), which offers cabling system for buildings and infrastructure.

Ulicorp had been rising since middle of 2014 from a price range of RM 1.00 to the current price of RM 5.49 at 3rd of June 2016, with a total dividend of RM 0.25 per share paid back to investor during the 2 year period.

Superlon - a potential replication of Ulicorp

There are much potential to see Superlon repeating the feat of Ulicorp. Several similarities that are identical includes :
- Adequate share base to provide liquidity without huge dilution in the earning of the share. (Ulicorp 145.2 million shares, Superlon 80million shares)
- Beneficiaries from the rapid development of property and construction in the Asian market region
- Good dividend policy that reward shareholder with at least 2 dividend per financial year.
- Strong and solid management
- Net cash company


According to technical reading, Superlon will continue to trade with the uptrend line due to solid and consistent growth. The current pricing of Superlon could be attractive after a few months consolidation at the price range of RM 2.00. Another point to note is that Superlon is also intersecting with the support line of the uptrend, which will possibly suggest a upward push.

Superlon Global  Distribution Network

With the consistent strong display of financial result on the 3rd Quarter FYE 2016, Superlon should be able to hit a high note for the final quarter of FYE 2016. According to sources, FYE 2016 will be looking to see revenue hitting near to the RM 100 million mark, with EPS hitting above 20 cents per share. Valuation at PER x 12 (factor in growth at current pricing) should give a fair valuation of RM 2.40 in near term for Superlon.

Moving forward, Superlon will continue to expand it's foothold in the Asian region, targeting on emerging market segment. The penetration into the India market will be a great opportunity for push Superlon into a greater growth in the future.


Bone's Mid Term TP : RM 2.40