Malton – Transforming to a shopping mall operator?

This writeup will focus on the Bukit Jalil project. You can easily find information regarding the property development segment and construction segment, but in my opinion, what makes it attractive is the jewel in the crown, The Pavilion Bukit Jalil.

Pavilion Bukit Jalil is a part of the development of Bukit Jalil City with GDV of RM4 billion. It has a NLA of 1.8million square feet. Targeting to open in 2020, it will be comparable to Mid Valley (1.8m NLA) and Sunway Pyramid (1.6m NLA). The 2017 earning of the two comparison is as follow:

Sunway Pyramid: RM 229.6m

Mid Valley: RM 277.9m

Assuming occupancy rate in line with the comparison, Pavilion Bukit Jalil will have an earning in the range of RM230m to RM 280m.

In 2017 alone, Malton is making a revenue of RM830.7m and a profit after tax of RM63.2m. At 9 months FY 2018, Malton already making RM544.2m revenue and PAT of RM55.5m, with estimated 12-month annualized PAT at RM75m to RM80m. With 2017 construction orderbook of RM859m and latest RM1 billion unbilled sales from property segment, it is highly likely that the current financial result will be sustained for another few years.

Valuation:

With a NTA of RM1.73, it is currently value at one third of book value. It seems as if the soon-to-be completed mega-shopping mall are left unnoticed, let alone the impressive order book and sales from the construction and property segment.

Disclaimer:

This writeup is not a buy or sell recommendation. If you buy shares in Malton Berhad, you are doing it at your own risk.