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.
Created by sosfinance | Jul 14, 2018
Based on Hektar Reit 2016 annual report, subang parade with a net lettable area of 500k has a market valuation of 420m at an occupancy rate of 93%. WCT paradigm mall JB with a NLA of 1.3m cost rm 1b to build. Ekovest cheras mall situated in the prime location of kl and linked with mrt. Investors can do the math.
2017-12-28 19:15
Flinstones@ your estimation of EkoCheras Mall is reasonable.
So, Construction segment is about RM2b, Properties should worth about RM2b (including Cheras Mall), SUKE is about RM1-2b.
"The trick in investing is to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot and when people are yelling "swing, you bum!" ignore them.
2017-12-28 20:08
Whoops! It's Shahril (not Wahid). Mixed up with PNB took over SILK. Let me correct it. LOL.
2017-12-28 21:05
Good piece of article. Pleaze use the same lense and valuation for MUIIND. It will make ekovest look like child play
2017-12-29 08:04
Not SUKE lah... It's actually DUKE 3 aka SPE (Setiawangsa-Pantai Expressway)
2017-12-29 09:58
Even though it went up from 93 sen to 102 sen today, it's still super-undervalue.
This is similar to WCEH, total cost of construction of RM6b, while Ekovest's Duke 1+2 = RM2b (Duke 1 collected toll for many years, Duke 2 collecting toll recently) and Duke 3/SPE under construction = RM4b.
2018-01-03 16:12
Up again today to 118 sen. Came down very fast, up also very fast. EGM in early Feb.
2018-01-08 09:49
Those who love roller coaster will love Ekovest.
1) Up from 93 to 118 - 25 sen up
2) Down from 118 to 108 - 10 sen down
3) Up ? Down ?
Enjoy the ride as long as you know the final destination is about 200sen and above. Evokest is like IJM Corp & Gamuda many many years ago, from contractor, diversify into property, and then, toll roads. If your kids are going to university in 5-8 years time, this company can give a CAGR of 15-20%.
2018-01-11 18:47
Super undervalue? Man, selling at dirt cheap price like a junk.if you can identify the golden crown with diamond from junk, you will make tons and tons of Money. I believe the waiting won't be long
2018-01-11 19:07
Flintstones
Dont forget about the upcoming 600k net lettable area cheras mall situated in a prime location. This mall alone is worth at least another RM 500-600m based on comparison value method.
2017-12-28 19:01