TheUnicornTrader
NCT Alliance Bhd (0056) - Property Development Revival Specialist Business Model That Thrives Even During Bad Times 12052.8% QoQ!!
UnicornTrader
Publish date: Tue, 02 Nov 2021, 01:00 PM
UnicornTrader
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This blog is meant for sharing some market observations and trading idea.
Please consult your financial advisor and always trade at your own risk.
Please consult your financial advisor and always trade at your own risk.
Background: From Grand-Flo Bhd to NCT Alliance Bhd
It has been just over 2 years since the take over of Grand-Flo Bhd by property developer and revival specialist, YBG Yap Consolidated Sdn Bhd. The company has since changed the name to NCT Alliance Bhd (NCT) and sold off its non-property development businesses, making it a full-fledged property development company that specialises in the rehabilitation of abandoned projects.
The new NCT management team has since proven themselves as demonstrated by the company financial performance for the recent past 2 quarters:
1) Since the take over and business transformation by the YBG Yap Consolidated Sdn Bhd in July 2019, NCTs net profit more than doubled to RM5.6million in the financial year ending Dec 31, 2020 (FY2020), from RM2.6million the previous year.
2) The company has returned to the black for the second quarter ended June 30, 2021 after posting a net profit of RM9.48million (12052.8% QoQ!!). This is also the company's record earnings to-date.
What's ahead in store for the group:
1) The recent improved financial performance was primarily attributed by the newly acquired Genting Projects: Grand Ion Majestic (GIM) and Grand Ion Delemen (GID) Projects, with the acquisitions completed in June 2021. These two projects will be the largest earnings contributors to the group in coming years.
2) It is reported that the group has four to five on going projects in the pipeline.
3) The group's currenty low gearing means it has the capacity to take on more property development projects
4) NCT is not your typical property developer. This group buys over dead and abandoned project at a bargain, revive and sell it which gives the company an edge over others in terms of profitability. (The pandemic market probably presents more opportunities for the group to acquire abandon projects at bargain prices and we are moving into the phase of recovery)
Let's take a look at the NCT Alliance Bhd (0056) 1 year stock chart
A Property Development Stock that has its stock price doubled even during bad times!
NCT takes over offer of Grand-Flo Bhd was at 26cents per shares in July 2019. NCT share price has risen more than 200% to 57cents (as at time of writing Noon 2 Nov 2021). NCT's unique business model thrives even in bad times!
The NCT Stock Chart shows an upward trend since December 2020. And since mid August 2021 the stock has been gaining a steady and upward momentum. Something to watch out especially during a post pandemic recovery market.
Conclusion
The team behind NCT has the experience and proven track record in the business of reviving abandoned mega property projects, and this expertise and business model certainly is unique. This is a company that not only makes money for its shareholders, it is also doing good for all stakeholders of the abandon projects.
So ... What and How does this translate to the company business performance and growth potential?
Imagine going to a One Dollar discount shop and buy some stationery at a cheap price, re-package and sell it at a premium... NCT takes over abandoned property development project at a attractive discount (since it is afterall abandoned...), revive the project and sell it at today's market rate (post pandemic). The last two quarters' financial performance as well as its stock price is reflective of this project revival business model that thrives even when times are bad.
Disclaimer: This blog is created only for sharing of trading ideas and it is not in any way or form meant to be a recommendation to buy or sell any stocks. Please consult your financial consultant before making any financial investments and trade at your own risk.
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