I am here to ANSWER a simple question. Why Fututech?(Part 2)

Update on Vista Residence @ Gohtong Jaya, Genting Highlands 

Refer part 1: http://klse.i3investor.com/blogs/undervalue/59718.jsp

Estimated EPS in 2015/2016/2017/2018

Construction and manufacturing - 18.2sen (Based on 30/6/2014 and 30/9/2014 result) [(4.2sen + 4.9sen)x2]

Gohtong Jaya - 12.4sen

Estimated EPS - 30.6sen

Revised Target price - 

PE8 - RM2.45

PE10 - RM3.06

Current Price - RM1.10 (as per 23 Jan 2015)

Potential upside -

PE8 - RM1.35 (upside 123%)

PE10 - RM1.96 (upside 178%)

(Monterez Golf and Country Club have been removed from the EPS estimation as I did not received any update about the development)

On 5/1/2015, Sinchew Newspaper have posted an articles on Kerjaya Prospek and Fututech Berhad. For your information, Kerjaya Prospek is the private company for Fututech's Executive Chairman, Tee Eng Ho.

On 20/1/2015, Fututech Behad have posted their advertisement via propertyguru. 

link: http://www.propertyguru.com.my/property-listing/vista-residences-gohtong-jaya-genting-highlands-fo-8646164#contact-agent

After more than 3months waiting (from my first post), finally the Vista Residence lauched. 

Detail of the project are as below:

Vista Residence @ Gohtong Jaya, Genting Highlands

Developer : Bazarbayu Sdn Bhd (A Member of Fututech Berhad Group)

Tenure : Leasehold

Province : Mukim Bentong, Pahang

Land Size : Approximately 1.33 Acres

No.of Storey : 33 Storey (1 lvl Facilities + 23 lvl Service Residential + 3 lvl Shoplots + 6 lvl Carparks)

Total Units : 378 units of Service Residential (17 units per floor), 31 units of Retail Lots + 11 Kiosk

Development : Service Residential

Built up : 53 Typical Layout (844sf - 3,144sf)

Completion date : 48 months from SPA date

Ceiling Height : 3,200mm for Service Residential (Floor to Floor)

Sea Level : 920mm above sea level

Temperature : 21c - 28c

Distance From KL : 45 Minutes

As mentioned in the part 1 (refer to http://klse.i3investor.com/blogs/undervalue/59718.jsp), Genting Malaysia Berhad are planned to build new RM1billion 20th Century Fox World theme park. The theme park is scheduled to open in 2016 and is expected to boost the number of visitor. Gohtong Jaya, which is one of the place that nearby to the cable car station (refer to the picture above), are set to benefit from the project. As Genting Malaysia Berhad also plans to upgrade the cable car and a shuttle service will also be provided, the activity in this area will set to increase. According from the sales agent for Vista Residence, there will be free shuttle bus to cable car every 30mins.

The target markets for the project are:

1) Investor who are interesting to tap the tourist market

2) Mature group between 40 to 50 years old

3) Corporate client

With the future development of GDV RM300million, as the project will be completed in 4 years time (expected to be complete on end of 2018). The profit margin for the property development are stood at around 10% to 20%. Assumed that the profit margin stays at 15%, with each year generating revenue of RM75million, profit will be around RM11.25million only for the Gohtong Jaya's project, which translated into EPS of 12.4sen per year for four consecutive years.

Also, as per announcement on 21 Jan 2013, the land only cost RM8million, which is only 2.66% from the total revenue of RM300million. Hence the profit margin will be expected to be more than the normal profit margin of property developer. 

Current progress of Vista Residence, Gohtong Jaya, Genting Highlands - as per 15 December 2014

As per picture above, the ground activities had been started since Dec 2014.

As this is a maiden project launched by Fututech Berhad, as an investor we will afraid on whether the company is able to handle such a huge project. 

But I am fully confident that Fututech Berhad will be able to complete the project due to the reason below:

Executive Chairman, Tee Eng Ho have recently launching their project via Kerjaya Prospek.

a) One of the project named The Shore, Melaka (Hotel Kerjaya Lonjak) is one of the successful project launched by Kerjaya Prospek (highest building in Melaka)

News link:

http://mykampung.sinchew.com.my/node/332332

http://www.thestar.com.my/News/Community/2014/12/01/The-Shore-Shopping-Gallery-opens-in-Malacca/

https://www.youtube.com/watch?v=BpnCYEtghUo

https://forum.lowyat.net/topic/2828114/all

b) Viridian Cheras Idaman

These project have been hand over on Sept 2013.

c) Residence V - still in progress

Fundamental of the company

Other than that. the company now currently trading at  PE 7.27 Dividend yield: 3.64%, which is relative cheap compared to other developer company. Also, the company has involved in sectors such as construction, manufacturing, kitchen and lighting.

Using the latest 4 quarter of result, the company profit margin stood at between 22.5% to 25.76% for construction, manufacturing and kitchen and lighting.

http://ir.chartnexus.com/fututech/news.php#1

As per thebusyweekly newspaper report above, the company currently (as per June 2014) have above RM130million project on sector construction, manufacturing, kitchen and lighting.

With the reason about I am fully confident that Fututech Berhad will be reaching my target price some days.

Correct me if I am wrong.

Happy trading and trade at your own risk!!!
 

Other links:

http://www.thestar.com.my/Business/Business-News/2014/06/24/Fututech-goes-into-property-It-will-launch-its-RM300mil-maiden-project-in-Genting-Highlands/?style=biz

http://tw.gigacircle.com/2830235-1

http://ir.chartnexus.com/fututech/news.php#1

http://ir.chartnexus.com/fututech/news.php#4