ECOFIRST - The Next Symlife
Author: StockAlliance | Publish date: Thu, 8 Jun 2017, 07:10 PM
My Comments :-SOUND BUSINESS GROWTH AND GREAT POTENTIAL

On-going high end project in Ipoh with GDV RM302M(sold out and completed last month which mean 20 to 30% of its unbilled sales will have been captured in its coming 4Q results ending 31/5/2017).
Another on- going project 87 acres of Freehold lands in Prime Location in Ampang Ukay KL ( in the vicinity of KLCC Petronas Twin Towers commercial/shopping/entertainment Tourist Belt) will generate RM5 Billions GDV over the next 10 years.
1st Phase with 3 Towers (GDV RM606M) had achieved sales of 90% since launched in March 2017.
POSITIVE INDICATIONS FOR THE COMING 4Q RESULTS/PROFITS (to be announced next month)
1. The revenue recognised from completion of Upper East (GDV of RM302mil) will be recognised in next quarter. Imagine.... Minimum of 10-20% of progress revenue recognised could easily reach RM30-60mil.
2. The revenue recognised from good take up rate from three towers @ Ampang Ukay (GDV of RM606mil) and completion of earthwork and piling works will be in next quarter. Again... Minimum of 10-20% of progress revenue recognised could easily reach RM60-120mil.
PLUS :- Sale of 1Segamat Mall for RM104M cash (net capital gain RM2.4M)
Its South City Plaza, Sri Kembangan, is generating higher recurring rental incomes increasing to RM16M pa (from RM12M)

More prospects:
EcoFirst Consolidated Bhd (EcoFirst), which is partnering IGB Corp Bhd (IGB) to develop a high-end condominium project in Jalan Batai, Damansara Heights GDV of RM400mil, hopes to launch the four-acre project in the third quarter of this year (3Q2017).

Technical Analysis:
ECOFIRST has broken long resistance @ 0.305 and striving to unchartered area with big volume. RSI has crossed 50 indicates bull signal. ECOFIRST will strive to next TP at 0.35.

FUNDAMENTAL ANALYSIS
We concluded from above findings, ECOFIRST is no different with SYMLIFE. You can try to google where is Ampang Ukay and distance between it with KLCC. It is in the centre of Klang Valley. We are very certain the value will soon resurface VERY SOON especially next quarter result out.. Mark our words. With big project valued at RM5bil, upcomin collaboration with IGB of RM400mil and consistent result performance, with market capitalisation of only RM240mil. This is 90% discounted. Think about it. ECOFIRST would at least valued at RM0.70 - 0.80.

(above extracts and comments are purely for exchange and sharing of market info)

ANALYSTS GOOD REPORTS BCOS :
GOT GOOD BUSINESS AND PROFIT GROWTH.
FORWARD P.E.s BRIGHT.
1H PROFITS UP 73.6% TO 10.9M
PAYS QUARTERLY DIVIDENDS PLUS SPECIAL DIVIDENDS FREQUENTLY.

I maintain my dignity by not being personal in my comments on other readers. I will focus on the markets n the counters. "TO EACH HIS OWN" Each investor has his strategies on stock selections and their timing . Its normal for any investor have his own timing for enter a stock. Everyone do this and practise bargain hunting.
Stock marts are dynamic. Hence there will always be different opinions and changing strategies.
Hence while Kenanga use a P/B of 0.63x , UOB applied a lower P/B of 0.55x to arrive at its fair value price of 2.55 for Affin. Each have its own reasons. Nobody can be sure who is right or wrong.

STOCK MARKETS ARE DYNAMIC AND CHANGES ALL THE TIME.
HENCE WE MUST LIKE-WISE ALSO ADAPT AND ADJUST OUR SHARE INVESTMENT DECISIONS. THAT'S THE REASON MANY WELL KNOWN INVESTMENT GURUS ADVISE US TO CONSTANTLY MONITOR/REVIEW AND ADJUST OUR PORTFOLIOS AFTER TAKING INTO ACCOUNT RELEVANT NEW INFO AND DATA

I TAKE PRIDE THAT I AM NOW ABLE TO ADOPT SUCH ADVICE

I HAVE NO REASON TO ERASE MY EARLIER COMMENTS AND ASSESSMENTS OF ANY STOCK.
HOWEVER I , LIKE ANY INVESTOR INCLUDING CONTRARIAN, HAVE A RIGHT TO REASSESS AND CHANGE MY OPINIONS AND STANCE TOWARDS ANY STOCK.

ANYWAY I AM A NOBODY AND READERS NEED NOT SHARE AND AGREE WITH MY PERSONAL VIEWS/

TRUE. BUT MY HAD SINCE REASSESSED FROM MY PREVIOUS BUY CALL TO A K.I.V. (AND LOOKING FOR A LOWER ENTRY PRICE ) AFTER MY DEEPER UNDERSTANDING OF NTA (WHICH I HAD ELABORATED ABOVE. )
MOST IMPORTANTLY I NO LONGER ACCEPT ANY ASSIGNED NTA FOR ANY BANK AS FIXED OR REALISTICALLY REPRESENT THE ACTUAL OR TRUE VALUE. ANY BANK'S LOAN ASSETS BECAUSE SUCH ASSETS CAN SIGNIFICANTLY DETERIORATE. THAT IS WHY ANALYSTS DO NOT JUST BLINDLY USE 1x Price to Book to compute fair value pricing for banking stocks.

UIOBKAHHIAN IS A REPUTABLE STOCK ANALYST AND THEY HAVE GOOD GROUNDS TO HEAVILY DISCOUNT AFFIN'S NTA BY USING 0.55x P/B TO ARRIVE AT ITS FAIR VALUE PRICE OF 2.55

UOBKAYHIAN REPORT HIGHLIGHTS ON AFFIN'S 1Q RESULTS

(I) Sharp spike in Gross Impaired Loans (GIL)
Asset quality deteriorated significantly while LLC (loan loss cover ) fell sharply to 38% by far the worst in the industry
(ii) projected a 10% YoY contraction in earnings.

AS warned by blogger, JAY, our Malaysian Banking Sector will be facing greater NPL pressures due to the coming implementation of F....9 effective July 2017. More stringent measures to govern the classification of NPLs?GILs. Will hit the bottom lines of banks especially those with poorer loan assets qualities. Need to cautious on the outlook of banks's earnings for the next few quarters which may be depressed by bigger provisionings for GILs

KYA : U may get your targetted 2.50 which is just below UOB's 2.55.
May be helped by the overdue correction that analysts are now calling for the Dow and S&P
due to the Friday burst of the Technology NASDAG Bubble which dived 3%. Asian n EU
marts are now in the red.

(It is all our hope that as we gain more knowledge through sharing of info in this Forum we will all be better equipped to make better investing decisions and become more successful/happy investors)

A CRITICAL LOOK AT NTA (NET TANGIBLE ASSETS)
=======================================
NTAs given to any listed company is an indication only. Not fixed.
They can be grossly undervalued (understated) or grossly overvalued (inflated) although NOT intentionally)

Different financial implications for NTAs of different business sectors.

NTAs for Property Devt companies can be undervalued when their landbanks bought decades ago had not been revalued.
But NTAs for Banks have an inherent danger of being overvalued/inflated.
Banks’ NTAs comprised their loans assets whose values can only be equal to their NTAs (assuming 100% good quality loans portfolios/no NPLs (which is impossible ). Banks with poorer quality loan assets will find their NTAs being heavily DISCOUNTED by Investment Analysts. In the case of Affin, UOBKAYHIN applied a Price to Book of 0.55x to its NTA to arrive at its Fair Value Price Target on 2.55.

Hence I would agree with the comments by Nikiecheong and Kok Wee Kiat above as well as UOBKAYHIAN’a Report (reproduced here) WHO ALL OPINIONED THAT BASED ON P/B at 0.55x Affin’s Fair Value should be only 2.55 and therefore overvalued at its current price.
Affin Holdings: 1Q17: Sharp Spike In Operating Cost And Gross Impaired Loans
Author: UOBKayHian | Publish date: Mon, 29 May 2017, 10:09 AM
________________________________________
(AHB MK/SELL/RM2.86/Target: RM2.55)
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Affin’s 1Q17 results came in 8.4% below our estimates with operating cost pressure being the key drag. More importantly, asset quality deteriorated significantly while LLC fell sharply to 38%, by far the lowest in the industry. Following our earnings revision, we lower our TP to RM2.55 (0.55X 2017F P/B, 5.7% ROE) and downgrade the stock to a SELL. We are projecting a 10% yoy contraction in earnings.
Source: UOB Kay Hian Research - 29 May 2017
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ON POSSIBLE BANK MERGERS (involving Affin)
=====================================
(i) Existing major shareholders will gladly sell their stakes at P/B of 1x i.e. at 4.54. But who will be willing to pay at this grossly inflated price based on a grossly overvalued NTA. Will there be any buyers? Acquiring Banks are not stupid but are very professional and calculating and will not overpay.
(ii) POLITICALLY NEGATIVE FOR UMNO to sell Affin , a Bumi owned bank to Alliance Bank which is controlled by Singapore Institutions. UMNO/BN will face a severe political backlash. Besides such a proposal will be opposed by Malay NGOS
SUMMARY/CONCLUSION
NOT POSSIBLE FOR AFFIN TO BE INVOLVED IN ANY MERGERS (under the present conditions)

PAST AGMS WERE MOSTLY HELD IN AUGUST

GOOD INVESTMENT GURUS HAD ALWAYS ADVISED US TO REGULARLY REVIEW OUR PORTFOLIOS.TO ADJUST THEM AND TAKE HARD DECISIONS EARLY TO AVOID MORE PAIN LATER ON. I FAILED TO FOLLOW SUCH TEACHINGS AND I PAID HEAVILY FOR MY TROPICANA. ITS SHARE PRICE JUST FAILED TO RECOVER AT ALL EVEN IN THE MIDST OF OUR CURRENT STRONG BULLISH MARKETS

TRUE THAT MY OVER CONCENTRATION ON TOO FEW COUNTERS IS A BAD STRATEGY. BUT MANY ARE ATTRACTED TO UNDERVALUED SHARES PREMISED ON THEIR MARGIN OF SAFETY. HENCE EVEN IF I WERE TO DIVERSIFY N EXPAND MY PORTFOLIO TO 8 COUNTERS I CAN STILL BE BOGGED DOWN IF MY SELECTIONS INCLUDE MAINLY UNDERVALUED SHARES BASED ON THEIR CURRENT PRICES AGAINST THEIR NTAs.
HENCE FROM NOW ON I WILL NOT GIVE TOO MUCH IMPORTANCE TO NTAs. BESIDES ANALYSTS DO (AND THEY ARE RIGHT TO DO SO) ASSIGN BIGGER DISCOUNTS TO NTAs BASED ON THEIR KNOWLEDGE ON THEIR FACTUALLY POORER QUALITY OF THEIR NTAs i.e. SUCH NTAs COMPRISED LOW QUALITY ASSETS . NOW AFTER A FURTHER STUDY OF UOBKAYHIAN REPORT SHOWED THEY GAVE A PRICE TO BOOK RATIO (P/B) OF ONLY 0.55x TO AFFIN'S NTA TO ARRIVE AT ITS FAIR VALUE PRICE OF 2.55 FOR AFFIN.
HENCE ITS NOT A GIVEN THAT IN ANY BANK MERGERS OR TAKEOVERS (IF THIS EVER HAPPENS AT ALL AS KOH WEE KIAT HAD RIGHTLY OPINIONED ON ITS UNLIKELIHOOD DUE TO LACK OF FINANCIAL SYNERGIES) THAT A P/B OF 1x WILL BE USED. THIS IS A INVESTMENT PRINCIPLE I HAD NOW PICKED UP WHICH IS NOT TO TAKE ANY NTAs AS GOSPEL TRUTH. ALWAYS NEED TO APPLY APPROPRIATE DISCOUNT FACTOR.
IN PRACTICE NOT EASY TO TOTALLY AVOID "VALUE TRAP" COUNTERS. BUT MY LEARNING NOW IS THAT IF UNFORTUNATE TO BUY SUCH COUNTERS THEN ITS BETTER NOT TO CONTINUE TO HOLD THEM FOREVER. MY CASE IN POINT IS MY TROPICANA

THE ABOVE SITUATION MAY ALSO EXPLAINED WHY ITS SHARES FAILED TO RALLY DESPITE THE BIG HEADLINES THAT FOREIGN FUNDS ARE BUYING INTO OUR BANKING SECTORS. BUT THEY ONLY BUY OTHER BANK SHARES LIKE MAYBANK PUBLIC BANK, CIMB RHB. AND WORST. EPF KEPT SELLING. FINALLY AND NOW AFTER DEEPER THOUGHTS, I MAY HAVE TO FOLLOW SUCH SMART MONEY FUND MANAGERS. SAD. ( ABOVE ALL MY PERSONAL VIEW POINTS AND MY OWN UNHAPPY INVESTING EXPERIENCES. JUST TO ILLUSTRATE THE IMPORTANT INVESTING PRINCIPLE WHICH I HAD JUST LEARNT AND HAVE TO ACCEPT: "AVOID VALUE TRAPS" )

SAD SITUATION AS DESCRIBED BY VIEW POINTS ABOVE. BUT MAY HAVE TO AGREE WITH THEM. THESE REASONS COULD EXPLAIN THE UNDER-PERFORMANCE OF ITS SHARE PRICE DESPITE ITS NTA OF 4.54. THIS BRINGS INTO MY MIND A SIMILAR SAD SITUATION I HAD EXPERIENCED IN ANOTHER SHARE. I HAD REGRETTABLY INVESTED 70% OF MY FUNDS INTO TROPICANA WHICH HAD HIGH NTA (NOW 2.24)AND PAYING REGULAR DIVIDENDS. BUT IT DROPPED FROM 1.80 TWO YEARS AGO TO BECOME A PENNY STOCK AT 0.965 AND LANGUISHED BELOW PAR FOR A LONG TIME. EVERY TIME ITS PRICE REBOUND A BIT EVERYBODY THREW. LOST A LOT HERE. VERY FRUSTRATED WITH SHARES HAVING HIGH NTA BUT ITS SHARE PRICES REMAINED UNDERVALUED FOR THE LONGEST TIME. WITH MUCH OF MY FUNDS TIED DOWN LIKE THIS, I MISSED OTHER OPPORTUNITIES TO BUY OTHER SHARES WHICH HAD GONE UP A LOT. MANY WITH 100% TO 300%. HENCE I MAY HAVE TO FACE FACTS AND REALITY NOT TO HAVE TOO MUCH HOPE IN SHARES SELLING AT PRICES WELL BELOW THEIR NTAs.MY BITTER LESSON :- MUST AVOID VALUE TRAPS. MOVE ON TO OTHER COUNTERS

REFER TO VARIOUS RESEARCH/PRICE TARGETS BY INVESTMENTS BANKS IN THIS i3FORUM :-

MIDF TARGET 3.30 (CHANGE IN FOCUS BEARING FRUIT)
KENANGA 2.90 (ANOTHER ROUND OF SURGING FEE INCOMES)
HLG 2.80 (CLEAR THE AIR ON ASSET QUALITY)

REVIEW & RE-ASSESS
==================
AFIN'S SHARE PRICE TOUCHED A RECENT HIGH OF 3.00 N RETRACED DOWN TO 2.68 YESTERDAY.
REASONS :
--------------
ALTHO 2016'S PROFIT OF 123.2M WAS 6.6% HIGHER YoY, ITS 1Q 2017 PROFIT GROWTH SLOWED DOWN DUE TO (1) HIGHER STAFF N OPERATING COSTS FOR ITS AFFINITY & BUSINESS TRANSFORMATION PROGRAMS TO BOOST EFFICIENCY AND PROFITABILITY.
EXPECT HIGHER PROFITS IN THE COMING QUARTERS/YEARS. (2) ITS NPL INCREASED BUT IT WAS CONFIRMED THAT IT WAS DUE TO ONE REALTY AC LOAN OF 200M. FULLY SECURED AND STILL PERFORMING BUT BCOS IT IS BEING RESTRUCTURED & RESCHEDULED (R&R) ITS A PROCEDURE TO MAKE A PROVISION AND TO WRITE IT BACK TO PROFITS UPON ITS COMPLETION.
(ACTUALLY AFFIN'S 1Q 2017 PROFIT WILL HAVE BEEN VERY GOOD IF NOT FOR THESE 2 REASONS. BUT THERE ARE POSITIVE ASPECTS IN THEM)

HENCE AFFIN'S PROFITS WILL JUMP UP IN THE COMING QUARTERS DUE TO (1) AND (2) ABOVE.

(PLSE REFER TO THE ABOVE HEADLINES/RESEARCH AND PRICE TARGETS BY INVESTMENT BANKS PROVIDED FROM 29/5 TO 30 MAY)

WELL, IMAGINE AN ESTABLISHED COMMERCIAL BANK WITH A GOOD ISLAMIC BANKING DIVISION WITH EPS OF 29.2 SEN AND A HIGH/SOLID NTA OF 4.54 ( SELLING NOW AT 2.68)

ANOTHER POSSIBILITY IS THAT KENANGA HAD ALREADY FULLY DISPOSED ITS HOLDINGS BY NOW

TODAY I IS LIKELY THE TAIL END OF ANY SALES OF THIS STOCK BY KENANGA (ITS CALL WARRANTS ALREADY EXPIRED.)

ALSO EPF HAD REDUCED ITS SALES. ITS LAST REPORTED SALE WAS ON 24 APRIL 2017.
MAYBE THEY WILL NOW HOLD THEIR STOCK BALANCE FOR LONG TERM CORE HOLDINGS

NOT COMPLETELY CORRECT. THE LOANS QUALITY MUST ALREADY BEING CLASSIFIED DOUBTFUL E.G FELL INTO 3 INSTALMENTS ARREARS , WHICH THEN REQUIRE PROVISIONS FOR BAD & DOUBTFUL DEBTS. SUCH IMPAIRMENTS ARE REAL N HAD ALREADY NEGATIVELY IMPACTED AFFINS PROFITS FOR 1Q RESULTS. OF COURSE IF SUCH IMPAIRED LOANS IMPROVED LATER THERE WILL BE WRITE BACKS.
BUT UNTIL THAT HAPPENS SUCH GILs WILL HIT THE BOTTOM LINE . THATS WHY I OBSERVED AFFINS EARNINGS RECOVERY HAD BEEN SET BACK BY GILs IN ITS 1Q COMPARED TO THE PREVIOUS Qs.

CAUTION. ISIS NOW DRIVEN OUT OF MIDDLE EAST AND RELOCATING ITS TERRORIST CENTRE/HAVEN TO THE PHILLIPINES.
SERIOUS ARMED REBELLION ALREADY SEEN IN MINDANAO LATELY

NEXT AGM IS EITHER LATE JULY OR AUGUST.
STILL FAR AWAY.

CAN WAIT FOR FURTHER PRICE RETRACEMENTS AND CONSOLIDATION BEFORE BUY

EARNINGS RECOVERY HAD SLOWED DOWN A LOT DUE TO SPIKED GROSS IMPAIRED/BAD LOANS AND HIGHER OPERATING EXPENSES/COSTS AS SEEN IN THE LATEST Q RESULTS

YEAH. THANKS FOR THE CORRECTION.
MAY ALSO DO DOLLAR AVERAGING TOMORROW N NEXT MONDAY

LAST FEW DAYS THE SELLING PRESSURE SEEN IN THE AFTERNOON SESSION.
LIKELY KENANGA SELLING ITS 4M SHARES IN THE AFTERNOON
AFFIN CW EXPIRY NEXT TUESDAY

GOT TOTAL 3 CWs

ALSO CW TOTAL COST EXCEEDS MOTHER SHARE PRICE.

but both CW AND CV are down today.

ONE IMPORTANT LESSON I LEARNT TODAY. WHEN BUYING ANY SHARES, NEED TO CONFIRM IF SUCH SHARES ALREADY HAVE CWs ISSUED AGAINST THEM AS THESE ARE NEGATIVE FACTOR HINDERING THE SHARE PRICES OF THE MOTHER SHARES

BUT AS FAR AS WE KNOW, FOREIGN FUNDS PRESENTLY DO NOT HOLD ANY AFFIN SHARES.
SO FAR THEY ONLY BUY THE OTHER BANK SHARES ESPECIALLY MAYBANK AND CIMB

IN ADDITION WE ARE ALREADY FACING SELLING FROM EPF.

THE SELLDOWN OF THE 4M MOTHER SHARES WILL BE AN OVERHANG PRESSURE ON THE MOTHER SHARE PRICE

IF THIS THE WAY CW WORKS, WE HAVE TO BE CAREFUL AS ITS DOES NOT SEEM FAIR TO CALL WARRANTS INVESTORS

IS THIS HOW CALL WARRANTS WORK?
THE ISSUER OF THE CW HAS TO INITIALLY BUY AND HOLD THE SHARES AS COLLATERAL FOR THE CW ISSUED (COLLATERISED/SECURITY TO BACK UP THE CW IN CASE THE ISSUER LOST MONEY AND HAS TO PAY THE EXPIRED CW ON MATURITY DATE. CASH SETTLED FORMULA.
BESIDES PROVIDING THE COLLATERAL FOR THE CW ISSUED, THE ISSUER ALSO BUYS N HOLD THE MOTHER SHARES AS A HEDGE WITH THE CAPITAL GAINS( MOTHER SHARES BOUGHT AT LOW PRICES AND NEAR MATURITY DATE SELL SUCH SHARES N MAKES PROFITS TO PROTECT ITSELF AGAIN CASH SETTLED LOSSES.
IN THIS WAY THEY ARE ALSO DOUBLY PROTECTED AGAINST LOSSES BY SELLING AND PRESSING DOWN THE MOTHER SHARES SO THAT THE FORMULa will work in its favour

LOOKING AT ITS TECHNICAL CHARTS AND TECHNICAL INDICATORS.
GETTING WORRIED

GOOD RESULTS. PROFITS JUMPED UP BY 174% FROM 10M TO 30M . EPS UP FROM 4.7 TO 11.2 SEN. STRONG SEQUENTIAL QUARTERLY/YEARLY PROFITS ON TRACK.

COMPARITIVE FUNDAMENTALS CONFIRMED SYMLIFE THE BEST/MOST UNDERVALUED
====================================================================
SHARE PRICE NTA P/BV P.E. EPS DPS

SYMLIFE 1.05 2.16 0.49x 10.7 11.2 3
malton 1.55 1.65 0.94X 20.3 8.6 3
lbs 2.06 1.73 1.2x 16.0 14.5 6
ecowld 1.62 1.42 1.1x 21.0 8.7 0

AGREES WITH AZLAN.STRONG PROFIT GROWTH FIRMLY ON TRACK.

CLEAR EARNINGS VISIBILITY FROM HIGH UNBILLED SALES (AND ACCUMULATING EVERY MONTH)

WE CAN DEFINITELY SEE INCREASINGLY HIGHER PROFITS IN EACH SEQUENTIAL QUARTER GOING FORWARD. THIS WILL BE ACCOMPANIED BY HIGHER DIVIDENDS RIDING ON INCREASING PROFITABILITY. NOTEWORTHY IT HAS RM325M IN ITS RETAINED PROFITS AC.

ALSO AGREE WITH KANCS3118'S METHOD OF USING THE P.E. RATIO TO ARRIVE AT HIS PRICE TARGET OF 1.51.

PERSONALLY KANCS'S 1.51 IS MY 1ST PRICE TARGET.

MY 2ND PRICE TARGET IS 2.17 BASED ON 50% DISCOUNT ON ITS RNAV OF 4.34

ALSO SUPPORTED BY THE FACT THAT IT IS NOW TRADING AT ITS DEEPLY UNDERVALUED PRICE TO BOOK RATIO(P/B) OF ONLY 0.49x which means its share price will double to around 2.17 (as positive catalysts of robust quarterly profit increases accompanied by higher dividends plus additional growth of its unbilled sales plus progress news for the development of Sg Long project drives up its share price to approach its P/B to 1.0X) in tandem with its peers in the Property Sector

IN TANDEM (TOGETHER)

NOTEWORTHY IMPROVEMENTS INCLUDE ITS UNBILLED SALES HAD INCREASED TREMENDOUSLY FROM RM700M TO A PROSPECTIVE RM2000M (2B). THIS IS GHE MAIN SOURCE OF REVENUES AND PROFITS AS THESE BECOMES PROGRESSIVELY COLLECTED UPON THE COMPLETION OF EACH STAGE OF CONSTRUCTION.
RM2B IS HUGE WHEN U COMPARE SYMLIFE'S PAID UP CAPITAL IS ONLY 310 SHARES AN D ITS MARKET CAPITALISATION IS ONLY RM319M

THIS BIG UNBILLED SALES WILL ENSURE ITS SEQUENTIAL QUARTERLY PROFITS WILL CONTINUE TO GROW STRONGLY.

WE CAN EXPECT ITS DIVIDENDS TO ALSO INCREASE IN TANTUM

ITS ONLY FAIR TO NOTE THAT SYMLIFE'S FUNDAMENTALS HAD IMPROVED SIGNIFICANTLY SINCE THE COMPREHENSIVE ANALYSIS WAS POSTED BACK IN 2015

THE ABOVE REPORT HAD COMPUTED SYMLIFE'S RNAV AT RM4.34

IF DISCOUNTED AT A REASONABLE 50%, SYMLIFE'S TRUE/INTRINSIC VALUE WILL BE RM2.17.

THE 2 MAIN CATALYSTS TO PROPEL ITS SHARE PRICE UP TO ITS INTRINSIC FUNDAMENTAL VALUE OF RM2.17 ARE STATED ABOVE

REVIEW & UPDATING

SYMLIF'S UNBILLED SALES CITED IN THE ABOVE REPORT WAS ONLY RM700M.
THIS HAD NOW GROWN TO AT LEAST RM1.5B AND APPROCHING A PROSPECTIVE RM2B. CLEAR VISIBILITY POINTING TO ROBUST GROWTH IN REVENUES, PROFITS AND GOOD CASH FLOWS FOR MANY YEARS GOING FORWARD. THE STRONG UPTREND IN ITS PROFITS ALREADY SEN IN ITS 9M PROFITS JUMPING UP BY 378% (FROM 4.2M TO 20M). ITS 3Q PROFIT WAS MORE IMPRESSIVE (UP 553% (9.8M AGST 1.5M PREVIOUSLY)
STRONG PROFIT GROWTH WILL PROPEL ITS SHARE PRICE UP TO NEARER ITS INTRINSIC FUNDAMENTAL VALUE.

SYMLIFE'S CURRENT SHARE PRICE AT 1.05 IS DEEPLY UNDERVALUED/UNDERPRICED AS INDICATED BY THE FOLLOWING COMPARITIVE PRICE TO BOOK RATIOS(P/B)

SHARE PRICE NTA P/B
SYMLIFE 1.05 2.12 0.49x
MALTON 1.55 1.65 0.94x
IWCITY 1.81 0.81 2.2x
ECOWLD 1.62 1.42 1.1x
WCT 2.27 2.19 1.0x
LBS 2.06 1.73 1.2x

THE NEXT BIG CATALYST (ITS SG LONG 400 ACRES REVALUATION AND DEVELOPMENT)

ITS BOOK VALUE (PER ANNUAL REPORT/ACCOUNTS) IS ONLY RM8 PSF

Future/upcoming launches

Tijani Signal Hill, Kota Kinabalu (est. GDV RM450mil)
10-acre JV development located in the prestigious Signal Hill area of Kota Kinabalu
Two towers of condominiums of various sizes and 12 units of 3-storey landed luxury villas.
Expect to be able to launch in 1H16. Phase 1 GDV RM150mil.
51% stake via Brilliant Armada Sdn Bhd.

Sunway (est. GDV RM400mil)
On a 2-acre land adjacent to the Sunway South Quay development.
About 600 mainly small unit apartments targeted for students, parents of students and investors due to its proximity to several established universities and medical centres.

Subang Airport Road, Subang (est. GDV RM200mil)
JV project arising from the purchase of 3.2-acre land from Kwasaland by the landowner and is part of the huge RRI land development.
Mixed development concept with retail and residential components that is expected to do well due to its visibility along Jalan Lapangan Terbang Subang.
51% stake via Vital Capacity Sdn Bhd.

Mont Kiara 2, Kuala Lumpur (est. GDV RM400mil)
On 2.2-acre of land located across Jalan Segambut from TWY@Mont Kiara.
Concept will be different from TWY@Mont Kiara but will continue to include innovative features that would differentiate its product in this mature location.

Section U10, Shah Alam (est. GDV RM300mil)
JV project located within a rapidly growing corridor along the Shah Alam-Batu Arang highway with notable developments such as Sunway Alam Suria, Cahaya SPK and Nusa Rhu in its immediate vicinity.
The 25-acre residential development will consist of 444 units of townhouses and terrace houses.
3 years development period.

51G, Kuala Lumpur (est. GDV RM360mil)
On 1-acre land at Persiaran Gurney.
Luxurious condominium project with a private car port in each of its 71 units and a 26-feet wide driveway on each floor which enables residents to drive into their units.
50% stake via 51G Development Sdn Bhd.

* * * * * * * * *

"Despite the challenges, through a combination of innovative products that created some excitement in an otherwise subdued market and competitive pricing, we recorded our highest ever sales of just over RM700 million for the financial year ended 31 March 2015 (FY2015). This has built a solid foundation of unbilled sales that will contribute positively to future earnings of the Group."
– Symphony Life 2015 Annual Report

*Based on my own assumptions/estimates.
**Based on my own assumptions/estimates.

Assuming full conversion of the warrants, I arrived at a fully diluted RNAV per share of RM4.34***. Based on this figure, Symlife shares (at RM0.755) are trading at a discount of 83% to its FD RNAV.

(***Updated 13 Sep 2015: lowered from RM4.75 after some tweaking – no surplus for properties not for development)

Note: For recently added properties, I used back the same net book values. Some of the properties could be under a subsidiary which is not wholly-owned, so Symlife's effective ownership of the properties could be less than 100% and if so should account for less in the RNAV. But most importantly, the Sg. Long land is definitely 100%-owned by Symlife. For the Sg. Long land, I should be using 400 acres instead of 420 acres (I don't know what price the 20 acres will be acquired for), but for the sake of convenience, I'm following the acreage as per annual report.

I also have not included some active developments which lands are not owned by Symlife. Including the DCFs from these projects would increase the RNAV. E.g., Star Residences was not included in the RNAV. This 50:50 JV project has a GDV of RM2.8bn and a 6-year development period. As a rough estimate, if we assume net margins of 20%, use a discount rate of 11%, the NPV would be about RM395mil. Symlife's 50% stake of this would then be worth RM197.5mil or RM0.47 per share (fully diluted).

What would be an appropriate discount to RNAV?

I believe Symlife should trade at a discount to RNAV similar to smaller cap property stocks that are more toward the affordable to mid-market segment. Property players in this segment are less affected by the current property market slowdown.

My rationale for this is that the Sg. Long development, once launched, will be more toward the mid-market segment; the development should also make up most of Symlife’s GDV in the future.

Given the location and target market of the Sg. Long development, there shouldn’t be concerns of oversupply or over competition, unlike regions such as Iskandar Malaysia now.

Market sentiment toward affordable to mid-market housing developers that don’t have heavy exposure to the Johor market seems to be relatively more favourable (in terms of discount to RNAV) than those that do.

As a benchmark, Hua Yang, with a market cap of about RM486mil, is currently trading at 48% discount to RNAV*. Hua Yang's dividend yields are close to 7% and its net gearing levels are ~0.6x. Matrix Concepts (~RM1.3bn market cap) is trading at 34% discount to its FD RNAV*. Matrix's DY is ~6%, while net gearing is relatively lower at ~0.1x. (*based on Kenanga Research's RNAV estimates). Both trade above book value.

Symlife has a market cap of ~RM230mil. Its net gearing is 0.4x, DY ~6.6%, and its stock trades at less than 0.4x P/BV currently.

It is also worth noting that while many developer’s high-end projects are experiencing poor take up rates, Symlife’s higher-end projects such as its TWY@Mont Kiara and Star Residences in the KLCC area have achieved good take-up rates of more than 80%.

In my view, for Symlife shares to trade at 50% discount or less to its RNAV would be fair and reasonable.

Source: PublicInvest Research non-rated report on SHL (dated 22 Jul 2014)

If we use the RM130 psf as guidance, Symlife’s 400-acre (17,424,000 sq ft) land could be worth RM2.27bn, or about RM7.30 per share.

In a July 2015 article by The Edge Property on Bandar Sungai Long (link to article), there was a mention that “the value of residential land in the township is between RM150 and RM300 psf now.”

Another way I would value the land is to use the NPV method.

As a rough estimate, if we evenly spread out the RM7.6bn GDV over a 10 year development period (RM760mil/year), assume net margins of 20% (net profit of RM152mil/year), use a WACC of 11%, we would get an NPV of RM895mil, which comes to about RM51 psf. Based on this, the land is worth RM2.89 per share.

Potential value of Symlife stock

Many of Symlife's properties have not been revalued for some time and hence are carried at low net book values (see Figure 4).

Figure 4: Properties owned by Symphony Life

Source: Company annual report

What could Symlife's RNAV be if we were to value the properties at current market prices?

For my own entertainment, I made some guesstimates to the values of the properties to see what RNAV Symlife could potentially have (see Figure 5). Note that these are just my own estimates and not the market prices. I feel my estimates are conservative, but actual market prices could be lower or higher.

Figure 5: Hypothetical revaluation of Symphony Life properties

The location looks about right judging from the quarry terrain (currently the land is being used for quarry operations, Symlife in FY12 paid about RM143mil to extend the lease of the land to 99 years and to convert the land status to make it ready for property development).

Potential value

Since the land is close to Bandar Sungai Long, which was developed by SHL Consolidated Bhd, land prices in that area could serve as a good indication to what Symlife's Sg. Long land is worth.

PublicInvest Research, in a non-rated report on SHL, indicated the market value/price of land in Bandar Sg. Long was RM130 per sq ft. (The report can be found here on bursamarketplace.com)

Figure 3: Extracts from PublicInvest Research report on SHL

RE-POSTING OF A 2015 REPORT (FOLLOWED BY A REVIEW)
Friday, 11 September 2015
Symphony Life - A deeper look into its deep value
SYMPHONY LIFE BHD
A deeper look into its deep value


Main highlights:
Based on my assumptions and rough estimates, fully diluted RNAV is RM4.34. Applying a conservative 50% discount, the stock has a fair value of RM2.17.
Symlife should start to progressively reflect its true value after FY16 in view of two positive catalysts in 2017-18.
Main catalyst will be the announcement of the Sg. Long land development's launch (slated for 2017/18). If valued at RM50 psf, the Sg. Long land is worth RM900mil (3.9x market cap). GDV for this development was previously estimated at RM8bn (>30x market cap).
The other catalyst will be a jump in profits (and as a result probably higher dividends) driven by its record high unbilled sales of over RM700mil (about 2.5x FY15 revenue). Upcoming/future launches of around RM2bn in GDV (excluding Sg. Long development and ongoing projects) to support earnings.
Despite the subdued property market, Symlife's high-end projects (first phase of Star Residences and TWY) achieved high take-up rates of more than 80%.


The delay of the Sungai Long development and management's guidance for lower sales in FY16 may come as a disappointment to some who follow Symphony Life (Symlife) closely.

But for some investors who are more forward looking, Symlife still remains an attractive property stock to be invested in.

After FYE Mar 2016, about 7 months from now, the stock could start to progressively reflect its true/intrinsic value, in view of the positive catalysts that's about to come in 2017-18.

The main catalyst would be the announcement of the Sg. Long development's launch (which should draw interest of institutional investors to the stock).

The other catalyst would be a jump in profits (and as a result, probably higher dividends) driven by unbilled sales of over RM700mil (the highest ever recorded by Symlife; ~2.5x FY15 revenue).

Much of this sales weren’t reflected in recent quarters and won’t be in the remaining ones of FY16 because Symlife’s recent launches were mostly high rise developments which construction works are now only at the foundation level.

As profits are recognized using the stage of completion method, the bulk of the unbilled sales will only be recognized at further stages of the developments' construction, from FY17 onwards.

Sg. Long development – the main catalyst

The Sg. Long development is now slated to be launched in 2017/2018. The land area for development has now been reduced to 400 acres after around 20 acres was acquired for the EKVE.

With less land, the previously estimated GDV of RM8bn should also be lower now. If we assume a proportional GDV to land area decrease, the GDV would be roughly 5% (20/420 acres) lower at RM7.6bn (but still over 30x Symlife's current market cap)

On the bright side, the EKVE cutting through the development could serve as a positive due to better accessibility/connectivity

Figure 1: Information on the Sg. Long land

Source: Symlife’s IMTN Programme Information Memorandum (dated 16 May 2013)

Location of the Sg. Long land

From the info memo (Figure 1), location details are:

To the south of the Sg. Long land:
- Bandar Mahkota Cheras
- Bandar Sungai Long
- Taman Cheras Vista
- Taman Vista
- Taman Desa Budiman

To the north of the Sg. Long land:
- Taman Bukit Sekawan
- Taman Sri Nanding
- Taman Cempaka
- Taman Perkasa
- Taman Dusun Nanding
- Kampung Sungai Serai

THE REVIEW AND UPDATING WITH THE CURRENT MARKET SCENARIOS WILL SHOW MANY POSITIVE CATALYSTS POINTING TO MUCH MORE MARKET VALUATION AND PRICE UPSIDES GOING FORWARD. THE RECENT PRICE BREAKOUT ABOVE 1.00 IS JUST THE BEGINNING OF ITS PRICE UPTREND. BACKED BY SOLIDLY IMPROVING FUNDAMENTALS

HI. JUST MANAGED TO RETRIEVE A VERY GOOD ANALYSIS ON SYMLIFE WITH ALL ITS POSITIVE DATA AND INFO.

WILL TRY TO REVIEW AND UPDATE IT WITH CURRENT FACTS AND NEWS TODAY DURING LUNCH BREAK OR ASAP.

ANOTHER IMPORTANT POSITIVE IS ITS PROFIT RECOVERY IS FIRMLY ON TRACK.

LATEST FY 2016 REGISTERED A 51% INCREASE Y-ON-Y (UP RM 198M)
THE PROFIT JUMP IN ITS RECENT 4Q WAS VERY IMPRESSIVE. (177M AGAINST LAST CORRESPONDING 100M I.E.HIGHER BY 77%)

AS CONFIRMED AFFIN BANK HAS NO EXPOSURE TO THE DEPRESSED O&G SECTOR.

THE COMING 1Q PROFIT WILL BE STRONGER AND THIS WILL PROPEL ITS SHARE PRICE UP WHEN IT ANNOUNCE ITS RESULTS BY THIS MONTH END

Minister: China’s capital control matter of concern for Malaysia

Second Finance Minister Johari Abdul Ghani says such measures could affect Malaysia’s international trade if investors pull out from China.
Free Malaysia Today

China’s capital controls behind Bandar Malaysia deal collapse
FMT Reporters
| May 7, 2017
Economist Hoo Kee Ping says China had committed to projects since 2015 without fully understanding its worsening financial conditions.
PETALING JAYA: China’s new measures to control flight of capital from its shores contributed to the recent move in Malaysia where the share sale agreement (SSA) over the Bandar Malaysia project was aborted.
Economist Hoo Kee Ping was reported by Channel News Asia (CNA) yesterday as saying that China refused to give permission for its China Railway Engineering Corporation (M) Sdn Bhd (CREC) to participate in the purchase of the project’s shares due to the stringent capital controls.
He said the project, which has an estimated cumulative gross development value of RM150 billion, was among those committed to by China without fully understanding the economic implications.
“All these projects China committed to from 2015 until now were committed without fully understanding China’s worsening financial conditions,” he was quoted as saying.
“(So now), Chinese projects, whether state owned enterprises or private, as long as they’re
------------------------------------------------------------------------------------------------------------------------
not strategic, they’re out. There must be a strategic meaning to China’s geopolitical
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interests.”
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The CNA report added that the Bandar Malaysia investment may no longer have strategic
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importance for China.
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Hoo was also quoted as saying that China may not have wanted to continue with the Bandar Malaysia deal as they believed they would not get the HSR project that Japan has a better chance over.