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Crescendo - Riding the Data Centre Wave in Johor

Publish date: Sat, 02 Dec 2023, 11:00 PM

Johor is fast becoming a data center hotspot as developers and operators look to secure overspill from Singapore amid ongoing capacity issues.

It is estimated that in 2024 alone, Johor will see RM17 billion worth of new investment in data centres. 

Recently, Amazon Web Services, one of the world's largest cloud service providers, made a US$6 billion commitment to build new data centres in Malaysia.

Crescendo (stock code: 6718), one of the biggest landowners in Johor, looks set to benefit from the data centre boom. 

It owns more than 2,500 acres landbank in Johor which are mostly acquired in the 1990s and early 2000s. 

Current market values of these landbanks are multiples of its net book values. As of 31 July, Crescendo has a net book value of RM3.37 per share.

Last month, Crescendo announced three land deals that will raise a total of RM543.19 million in just 10 days! 

It would be selling a total of approximately 100 acres land in Nusa Cemerlang Industrial Park to Microsoft Payments (M) Sdn Bhd, Yu Ao Sdn Bhd and STT GDC Malaysia 2 Sdn Bhd. 

The selling price is RM120-RM125 per square foot while the land costs RM16 per square foot.

It expects to book a total net gains of RM310 million from the disposals.

Click to view: First deal ; Second deal, Third deal

Will Crescendo declare a special dividend after completion of the land disposals? 

Looking at its track record, dividend pay-out ratio ranged from 52% to 63%. 

Dividend pay-out ratio

If the company maintains the historical payout ratio, investors can expect a special dividend of 57-70 sen per share from the land sales. 

Crescendo is 70% owned by the founding Gooi brothers, who also have a controlling stake in plantation group Kim Loong Resources Bhd.

It will be interesting to see if Crescendo will continue to unlock the values of its huge landbank in Johor.

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