WHERE IS EKOVEST VALUE?

Is in its concession assets.  Otherwise, Shahril won't acquire 40% of DUKE 1 & 2, risking RM1.1b of EPF's holders retirement. EPF expects an IRR of 10-11.5% p.a. Ekovest's 60% is worth about RM1.7b.  

DUKE 3 is about RM3.9b.

Market Cap of Ekovest now is about RM1.989b @ 93 sen per share.

WHAT ABOUT DUKE 3 or SPE?

I leave it to the analysts.  The concessions period is about 54 years, and project of such size, you can expect Project IRR of 9-12% as a conservative estimates.  Of course, it depends on the execution and the traffic volumes.  This part, I believe the management can handle it.

WHAT ABOUT CONSTRUCTION & PROPERTIES? 

Construction book order is about RM6b.  Properties - I believe its not bad, in the short run, a bit unpopular.  Look at Scientex, its property segment gradually grown to double the size of its manufacturing segment.  And most of Scientex's lands are in Johor, Melaka and Ipoh.

WHAT ABOUT ACQUISITION OF 62% OF IWC?

Very good for Ekovest if Greenland deal can be completed. 128 acres for RM2.4b, make about RM1.8b.  Neutral if the Greenland deal is aborted, buying it at a 50% of market value.

KHOO NANG SENG SOLD 15M SHARES, WHY?

Originally, Mr Khoo owns about 120m Ekovest shares.  In early Dec, he sold about 15m shares, and ceased to be substantial shareholders.  He is 77 years old and co-founder with LKH in 1972.  "Who do you think will get this 5.6%?" "Why did he sell at the lowest point of the roller coaster ride?" 

WHERE IS EKOVEST IN THIS ROLLER COASTER RIDE?

I believe it is at the lowest point (90 sen).  Why? Today's market capitalisation already represented by Duke 1&2, what about Duke 3, Construction segment of RM6b order, Unbilled Sales of RM450m on Properties and RoL, It had came down from 150 sen at the peak (after the split 5 for 2), due to its "noises" not "fundamental".  

In short, we are paying only for Duke 1&2, and getting the following FREE? 

1) Construction Business (Order Book of RM6b & more)

2) Property Business (Unbilled Sale of RM450m & GDV of 7bil to go)

3) Duke 3 or SPE - Project of RM4-5bil (54 years of Concessionaire)

DUKE COST OF CONSTRUCTION (estimates of value)

DUKE 1 - RM980m - 16.8km

DUKE 2 - RM1.18b - 19 km

DUKE 23 - RM3.9b - 29.8km

(Total about RM6b.  If 25% Equity = RM1.5b.  Using Multiple of 3-4x, Value of all all Expressways is RM4.5b to RM6b)

Duke 1 & 2 = RM2.16b, assume 25% Equity = RM540m, total value given by EPF is RM2.8b, so, basically 2.8b/540m = 5x)

Ekovest = Undervalued.