Just to clear up any moronic statements made by others here.

In a private company, there are directors.

Any decision to file suit is made by the directors/management.

As SSB is a holding firm, they don't really have any management to my knowledge. I would assume decision of filing the suit is done by a majority vote of the board of directors.

It is quite evident that Vincent Leaw whilst a shareholder (and I assume a director) of SSB would not be in agreement to the suit.

It would not surprise me if he was not even aware that the other directors agreed to file the suit.

Now some less than stellar imbeciles in this forum will of course be trying to paint a black name against Vincent Leaw on this matter.

We all know who the big culprits in this case are in filing this suit.

It is the two rogue brothers who are also shareholders of SSB (in case some of you have not figured it out). Leaw Tua Choon and Leaw Ah Chye, the former directors of Benalec who were crooks and forced to resign.

The two crooks who were especially adored by the hum yee/chow tau foo user named "where" on this forum.

As some of will recall "where" claimed that these two people "forgot" to declare their RPTs instead of admitting that they tried to rob Benalec blind by selling land to themselves.

And now we can see the photocopy of "where" has appeared on this forum to spout the same kind of crap.

Of course if this latest iteration of "where" believes a crime has been committed by Vincent Leaw in not making any necessary declarations/disclosures, then I suggest he should perhaps grow a pair unlike "where" by filing a complaint to the SC.

I am of course not holding my breath for that to happen.

Feel free to carry on with your bullshit. I tend to make it a point not to bother responding to your posts, but this recent series made me snicker enough that I just had to.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/4729657

Suit by Sentosacove Sdn Bhd (SSB) against Benalec. No damages were specified in looking for relief.

Here's the clincher though, guess who owns SSB? I know who owns 70% of the shares (pretty certain my data is still accurate), but am uncertain who owns the other 30%.

Here's a hint, Vincent Leaw owns 23.3% of that 70%.

A second hint, I very much doubt that Vincent Leaw would agree to sue his own listed firm, so it sounds like a majority rules decision.

Feel free to take a wild guess who occupies two of the majority seats in favour of the suit.

Confirmed, Pengerang status not approved on DOE's EIA site.

Will post an update if I learn more.

As per the above link by latestinfo.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/4722469

Excerpt from the link:

"On behalf of the Board of Directors of Benalec, Hong Leong Investment Bank Berhad is pleased to announce that the Proposed CB Issue has been completed with the issuance of RM200 million nominal value of the CB on 29 April 2015.

This announcement is dated 29 April 2015."

Not bad, for a company that's supposedly going to close shop/the two brothers taking over yadda yadda yadda (plus other appropriate bullshit)...

The bond issue was still completed.

And...

for a company that's supposed to be closed/chap lap...

They could still make an announcement about it to bursa.

CaoCao: Cheers bro. Glad you are one of the rational ones. =)

CaoCao: Could not resist making that last reply lah. I know I shouldn't have but going into a good and satisfying lunch, it was hard to resist. :p

And of course coming from a good and satisfying lunch, I cannot resist making additional comments at some of the statements I have read.

Amazing comparisons being made here.

Benalec compared to Genting? Seriously? Do you even realise what kind of business the two companies are involved in.

One is a casino that has daily revenue coming in. You close it down for a week, your P&L figures take one hell of a hit.

The other is in the business of land reclamation (of which operations are STILL ongoing - only the administrative office is on vacation) and sales of reclaimed land. Closing the office does not affect the P&L figures because (and this is going to be a shocker, you do not sell land like you go and play cards at the casino table/pull the slot machine handle

The stupidity of these comparisons never cease to amaze me.

Losing said "This Taciturn really got problem. People want to instill fear so make profits. No need to instill fear because it is real fear. 1 week later, the MD will say "Guys, I am at Taiwan, sayonara""

Challenge accepted. I'll give you until the end of Friday next week. If none of your scandal/expose/bullshit comes true, I win. If it happens you win.

Loser goes to KLCC and jump off the building. Game?


When a user nickname stinks like a combination of hum yee and chow tofu, you see duplicates appearing.

Quick update:

To reiterate: Vacation for HQ staff for a week is not something terrifying, it is common for most companies to give a paid vacation to their staff members, especially during quiet periods. Also the number of staff in the HQ to my knowledge is very small. I believe it is about two dozen people.

Suppliers would have been informed before hand of any closure.

Also, suppliers would usually send any invoices to the operational/site office in Melaka which IS open.

How do I know this? Because I took the extremely difficult step (very very difficult - I actually has to open a browser window and go to benalec.com.my) of getting the phone number of Benalec's Melaka office. I called them. They are open.

Conversations there indicate that reclamation works is ongoing. I also spoke to someone who confirmed that the Ultra Green/Oriental job in Melaka is still ONGOING. It has not been terminated as someone has tried to portray.

And yet again, I will reiterate, we have a few people jumping up and down trying to instill panic in the share price of the company with completely unfounded and wild allegations.

Please lah, you want to give bullshit stories try to do it with some class. If not it is just plain pathetic.

I generally make it a point not reply to these kind of statements but this is hilarious.

All this sandiwara without any real proof backing tends to leave me facepalming. If you want to come out with bullshit stories, please try to come out with a better quality of story lah.

My questions in return:

1) 720 acres of land in Melaka....what job exactly is that? For Melaka there are (broadly speaking) two activities Benalec is involved with.

a) reclamation of land and/or sale of land for concessions that it owns directly (this is its share for reclaiming works for others). This involves an area of 450 acres as yet unsold. You cannot "terminate" this job to Benalec since the assignee is Benalec, the reclaimer is Benalec, the owner to sell the land is Benalec.
b) The reclamation of 415 acres for Ultra Green Sdn Bhd/Oriental Holdings Bhd for cash payment. Whilst theoretically this job could be "terminated" by the client, this is for one...not 720 acres as claimed in another series of wild allegations. And two.... Oriental Holdings is a listed company. How strange that they themselves have not made a notification on Bursa about the job being terminated.

I.e. since they made an announcement on Bursa when they were in the process of awarding the job to Benalec, it is odd that they make no announcement if if they were terminating" the job.

So again, we have another poster who comes out with outlandish statements and does the simplytembak (tm) method of making allegations to try to instill panic in the company's share price.


2) I have no clue if Benalec's offices are open or closed. If they are closed for a paid vacation, I would shrug and not mark it down as something remarkable. Many companies do take their staff out for an annual vacation.

And for those panicking about how Benalec's operations is completely shut down in this process, I would ask in return (since you obviously know more than the rest of us), does the shutdown involve operational works at Melaka and Johor? I would assume it is not.

But of course, there will be those going, OMGWTFBBQ, they closed for one week!


3) If the "termination" of the "720 acre job" was issued on April 20, why exactly has the share price not tanked? You have two full trading days (Tuesday and Wednesday) since then.

If you are telling me because it is still "confidential" and a "secret", then I am a cousin of Mbotu Seko Seko and I need you to help me move out USD$50m from Zaire, if you could just wire me 5% of that amount first for the "processing fee" I will see to it that you get half the amount.

To reiterate one of my previous posts since the dateline is tomorrow (or should be at least).

Pengerang's DEIA decision is due on 22 April 2015 (Wednesday). Funnily enough, it is in breach of their own KPI of 84 days, which should have made it due on 17 April 2015.

Some of you will recall whilst Tanjung Piai's DEIA was due on 23 January 2015 (Friday), it was only decided in their system on the evening of 27 January 2015 (Tuesday).

So following their efficiency trend (4 days delay, backdate the decision, heh), such a decision may be delayed up to 27 April 2015 (Monday).

Note that Pengerang's story is not exciting as Tanjung Piai and should not be much of a catalyst to things. (Feel free to read my previous postings if you need clarification)

As per always, trade at your own volition.

I feel so loved. This is the second time someone has created a fake account trying to imitate my userid.

Rational readers of this forum, do take note. You know how fake accounts will be like, trying to pass themselves off as the real thing.

One thing is for sure, my England is a lot more powderful. Heh.

vintan: Heh. This is why I tend to avoid replying to such persons.

zero: I know man, it seems Ah-bird Einstein's teacher (me) is a moron. I cannot disagree, since I do feel like a moron in wasting my time trying to explain and rebut his points.

It is a bit like replying to the two anti-spinner celebrities here. Masuk satu telinga, keluar telinga lain.

Slow day lah, what to do. :p

rizerlee+vintan: Sounds like sour grapes to me. Think rizerlee's got it right, trying to spread bad news hoping for a price push down to pick up on the cheap.

ymtan: Lol, I choked when I read that. "roti canai pusing kuat kuat".

I have to remember that line for my own use in the future. XD

And I know this is hard for you to understand, but these are the requirements by the auditors, not Benalec. Not because their land sale announcements are "well play"

This is my final posting towards you. You are quite obviously a troll, not looking to learn something but to replace your missing master(s) on this forum, the anti-spinners.

Carry on with your half-legible garbage. Perhaps someone will actually believe what you write.

I am reproducing one of my earlier postings for one less than stellar individual on this forum.

I doubt he will bother to read it, but who knows, maybe he will surprise me.

He said, "all your facts are just well play that the sale is done and $$ collected ontime and on the way back (sound like 1XXB). where it recorded the revenue in the audited quarterly report? "

1. Lumpy earnings
I need to go into a bit of detail here, so bear with me if your eyes start to droop as you read this.

What does it mean by lumpy earnings? It usually means that revenue is booked in bulk in one go.

To put it in comparison, a company with progress earnings (for example, a general contractor) would usually bill their clients on a monthly basis. A general contractor which does an average of 5% of the whole job every month would book 5% of their revenue each time they bill their client.

If the job is RM100m, 20% net profit, 20 month period, after 3 months (every quarter), the company would have booked RM15m in revenue and RM3m in profit. (This is a rough example)

Now in Benalec's case, here is an example of lumpy earnings [Note that this is just a theoretical example]. Let us assume a piece of land is sold on 31 Dec 2013 at RM60m with a 25% net profit.

The buyer pays 10% down as a deposit.

The land is partially reclaimed that will be fully reclaimed in 3 months time (31 March 2014). Once done, the land title application will be made to the land office. 6 months is usually needed for land title applications (30 Sep 2014).

Once the land title is issued, the title is delivered to the buyer's solicitors. The standard sale and purchase agreement (SPA) by Benalec states that the buyer is given 3 months from the title delivery date to pay the balance of 90% (31 Dec 2014). In the event the buyer does not pay up in time, they get an automatic 1 month extension (31 Jan 2015). However, during this 1 month extension they have to pay interest at the rate of 8% p.a on the balance.

If the buyer does not pay up, it is considered a default. Benalec keeps the 10% deposit and they part ways. This has happened before - buyers Highbond Capital and Gigayear Revenue defaulted.

[http://www.bursamalaysia.com/market/listed-companies/company-announcements/1555185

See item 10.1.a for details]

Of course as a caveat, if Benalec and the buyer so choose, they can come to an agreement (strictly voluntary) for any further extension.

Now when does Benalec book this RM60m as revenue? It is only booked when the final payment is made.

In other words, you have a land sale on 31 Dec 2013 (2QFY14). The 10% deposit is considered a liability (Deferred Revenue in the Balance Sheet) and is not booked as revenue during that period. Assuming that the buyer pays up after the 3+1 month period, 100% of the revenue is booked on 31 Jan 2015 (2QF15). In other words, such a sale takes over 1 full year before it is booked as revenue.

Why is it done this way? To comply with general accounting standards, and to keep the auditors happy. The auditors take the view that a default is always possible, and you only walk away with the 10% deposit. They do not want you to book the whole revenue and then have to reverse it upon a default.

Also not all buyers pay up at the very last minute. Some may choose to pay within the 3 month period (to avoid the interest on the 4th month).

Why are you even asking if PN17 if possible unless you have no damned clue what it even is.

RM485m in losses. If you had bothered to actually read up on what it is, you would know that is what it would take.And hopefully, you would realise that is an extremely stupid question. Is PN17 going to happen or not?

PN17 has absolutely nothing to do with cash flow.

Losses make up PN17.

RM485m, do you know how big that figure is? You obviously do not.

Hence, my point why I consider you to be a moron.


CFO changes
1. Pray tell, who here knows the CFO well? Since I have never met the new CFO,
nor do I know the old one well.

2. You know a company where something fishy was going on and then the CFO changed. Does that mean any time a CFO changes, it means something fishy is going on?

So if say the Public Bank CFO quit tomorrow after getting a job to become the CFO of Wells Fargo, that means that OMG, there must be something fishy going on with Public Bank know?

Career changes/advancement based on your statements are completely unacceptable. Because it might cause people to think that something fishy is going on.

This is why I consider you to be an even bigger moron.


Bond issue
_IF_ the bond issue does not happen, then Johor reclamation slows down a lot. Is that so hard to understand? Or work can even halt there.

Existing land sales have enough cash flow to keep the company running.

Oh I notice I missed his earlier posting on remuneration.

I remember giving my explanation to you as I received it during the last AGM when I asked the board about it. I reproduced their answer here for you to see, as accurately as possible (as I recall, someone on this forum posted after saying that I had reproduced it accurately).

You were not happy with me even though I was just the messenger.

I will reiterate here, if directors remuneration goes out of control, then I believe the minority shareholders will scream bloody murder. But that is something that we will only know once the annual report for 2015 is out (which will only be out at the end of November 2015).

What I find disappointing is that you are alluding to that happening (for FY15) even though it has not been proven as yet. And the fact that you cast aspersions on the new CFO when he has barely started work is even worse.

You have probably never met the person (I have not) and you are already calling him a crook.

Pathetic.

Never mind about everything else lah (since you refuse to accept facts). Please, just explain your point on PN17. I am still waiting (with bated breath) for you to justify your point.

See this is why I consider you a bit of a moron.

From day 1, it is known, Benalec's Tanjung Piai has absolutely nothing to do with RAPID or Petronas.

Petronas is not an investor. Petronas is not an advisor. Petronas has 0% input with how Benalec handles Tanjung Piai.

You on the other hand are trying to show that there is a link between them, whilst none exists.

You can read every analyst coverage on Tanjung Piai since day 1, nowhere is it mentioned that Petronas involved, in fact there are points made that Tanjung Piai is in fact a competitor to Petronas's interests (via RAPID - which again I will reiterate for those with less than able minds - has absolutely nothing to with Benalec.

Ah Ha: I try not to respond to idiots, but I cannot resist since it is a slow day.

1. What do you mean talk without facts?

The land sales I quoted above are facts.

The quarterly reports you can view are facts.

Cash flow is stable for its non-Johor operations.


2. You have declined to respond to my queries. I will reiterate it again.

a) RAPID has absolutely nothing to do with Benalec's Tanjung Piai. What is your point?

b) Petronas has absolutely nothing to do with Benalec's Tanjung Piai. What is your point?

c) RM485,000,000 loss for Benalec to go into PN17. Please elaborate how you came to this conclusion, do not chicken out like your fellow peers (where and ryanteh).

Since you love to talk about facts, please answer the above questions.


3. The convertible bonds are required because the requirements for Johor are above and beyond the company's internal cash flow.

If they were going for the sell first, then start reclaiming option (with 1MYSOT), cash flow is not an issue.

But as everyone knows, 1MYSOT is a dead duck in the water thus Benalec is going ahead to reclaim FIRST and then sell.

So they opted for a bonds issue instead of wasting time shaking their legs.

Is this because they have poor cash flow? Nope, it is because Johor deal is a complete game changer for the company.


4. Your link to the NST article is well known. As I will try to politely reiterate for you, the 1MYSOT deal in my view is kaput.

But this will likely shock and amaze you, but there are other buyers beside going through 1MYSOT. 1MYSOT is not the only option in the market.

Please, do not be like the infamous where, by declining to answer my questions above.


Tell you what, just answer my query on PN17 above. Everything else is secondary. I would _LOVE_ to see you justify your (extremely stupid, IMHO) statement.

vincentan: I try to make it a point not to respond to his statements because I personally think he is an idiot, but since you asked politely...

1. RAPID has absolutely nothing to do with Benalec's Tanjung Piai. What is your point?

2. Petronas has absolutely nothing to do with Belanec's Tanjung Piai. What is your point?

3. There are no "land sale delays" as far as I know. Land has been sold, is still being sold and as far as we know, for the future continue to be sold. As this poster (Ah Ha) seems to be, shall we say (politely), unaware, the following land sales were announced within the past one year period:

9 March 2015 - Arena Progresif - 70.46 acres (fully reclaimed) - RM128.9m
2 December 2014 - Jadex Land & Quality Paradise - 58.63 acres (fully reclaimed) - RM74.69m
19 June 2014 - Jadex Land - 15 acres (fully reclaimed) - RM25.48m
20 March 2014 - Ultra Harmony - 128.52 acres (reclamation works almost completed/fully reclaimed) - RM235.13m

The above sales fully covers Benalec's operating expenses with regards to their non-Johor operations.

The RM200m convertible bond issue is nearing completion and will be used for the Johor operations. With regards to the bonds, Benalec's non-Johor operations will fully cover all interest expenses for at the very least the next two financial years.

What cash flow issues exactly is he talking about?

4. Ah Ha to me now joins the ranks of the truly famous imbeciles of this forums who have famously declared the possibility of Benalec being declared PN17. He is the number three member in that august party (along with where and Ryanteh).

He takes it up a whole new level though since he asks is it possible this year?

For those who are interested to know the full definiton of PN17 (this is something I wish the three people I mentioned above would take the time to read and understand before making what I believe to be completely stupid comments) the details can be found here:

http://www.bursamalaysia.com/market/regulation/rules/listing-requirements/main-market/practice-notes/

To give you a simple explanation of what needs to happen for Benalec to go into PN17 (criteria 2.1 (a) in my link above), Benalec needs to post a net loss of at least RM485m.

That is RM485,000,000. Four hundred eighty-five million ringgit. Empat ratus lapan puluh lima juta ringgit, if you still do not get it.

Why do I call these three people imbeciles? Benalec's audited accounts have shown a net profit EVERY year since listing.

And as far as I can see, based off their already announced land sales (which are on-going) the company looks set to be profitable through FY15, FY16 and part of FY17.

I would be delighted to hear Ah Ha, Ryanteh or where explain as to how they expect Benalec to post a loss of RM485m compared to my (and professional analyst) estimates of the company showing a net profit for the next two and half financial years.

Johnnys: Feel free to ask Ryanteh for an elaboration. He is one of two people (or accounts) who have made that statement.

No doubt he will be delighted to tell you how he came to such a (erroneous, in my view) conclusion.

And another untrue statement.

Then again, it's coming from the person who claims that "if the fund raising failed, i believe this company will be in PN17."

So, I am sure rational readers here can see for themselves whose statements they should take seriously.

Amazing, another one who does not know how to read.

The previous CFO did not resign.

Try to use your brains for once and read the announcement in full before mouthing off with another bunch of inane comments.

Quick update for rational readers of this forum.

1. Pengerang's DEIA decision is due on 22 April 2015 (Wednesday). Funnily enough, it is in breach of their own KPI of 84 days, which should have made it due on 17 April 2015.

Some of you will recall whilst Tanjung Piai's DEIA was due on 23 January 2015 (Friday), it was only decided in their system on the evening of 27 January 2015 (Tuesday).

So following their efficiency trend (4 days delay, backdate the decision, heh), such a decision may be delayed up to 27 April 2015 (Monday).

Note that Pengerang's story is not exciting as Tanjung Piai and should not be much of a catalyst to things. (Feel free to read my previous postings if you need clarification)


2. My personal opinion - The term sheet with 1MYSOT is as good as a dead duck. With 1MDB in a shambles, it is extremely unlikely a deal will be committed by 1MYSOT with the off-taker before June 11 (when the term sheet expires).

On the flip side, the ringgit has depreciated quite a bit versus other currencies making any such deal with other off-takers more compelling as they (the off-takers) are getting a much sweeter deal in return.

I still strongly believe that an off-taker would be secured before the end of this calendar year.


3. RM200m convertible bond - the deal completion should be very soon. The original circular states that estimated completion is within 1HCY2015.


4. Pulau Indah - sorry, no update as yet. I have been fairly busy and have not been able to speak with management to clarify the few points that I still have questions about. Will update accordingly when I do get a chacne to speak to them.


As per usual, I have never once and never will predict the outcome of the share price based off any of my statements (although a few intellectually challenged individuals will beg to differ). Trade at your own volition.

Heh.

I'm still wondering how one is supposed to "kindly monitor and share if any director sell share quietly"?

There are more here who are experts at shooting off with their mouth than those able to use common sense.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/1897505

Land sale announcement by Benalec of 70.46 acres in Melaka to Arena Progresif Sdn Bhd.for RM128,907,979.20.

Salient details of the announcement:

1) The lands in question have been fully reclaimed. Only infrastructure and shore protection works need to be completed.
2) The payment schedule of the land sale is akin to the Jadex sale announce in December 2014.
3) Estimated net profit for this sale is RM33.56m.
4) Estimated date of completion for this sale is in the 1QCY16 (first quarter of calendar year 2016). For those that bothered to read my previous postings, this means that this sale will likely be booked for 3QFY16.

Am happy at this announcement.In terms of timelines, it's a pretty good follow up sale to the 59 acres sold to Jadex in December 2014.

Whilst I still do not think FY15 will be a fantastic year (although it will still be a profitable one), this will push FY16 to a fantastic year, especially if the entire Ultra Harmony deal is booked in FY16. If that is the case, it would push the net profit for FY16 over RM100m.

And this is not taking into account any activities on the Tanjung Piai front (of which I am still confident a deal would be made some time this calendar year).

Overall, very good news.

vintan: Haha, brilliant. Probably true!

losing: Unprofessional? Seriously?

It does not take rocket science to figure out who I am. If bursa wanted to go after me, it's damned easy. The directors/management know who I am.

A retail investor who's just interested in detailed analysis.

Tired of dealing with trolls. Carry on, last posting towards you.

Ah look, it's a troll. Probably one of those with banned accounts.

Yadda, yadda, yadda.

If you think Bursa should have an issue with Benalec, do us a favour. Unlike the spineless someone who accused me of insider trading and who claimed he would report me to the SC, why don't you do so?

Please, report to Bursa/SC. No point raising such questions here _IF_ you actually believe you have a point to make.

Cannot/Will not it? We all know why.

I love how he can claim "ask any o&g analyst", tanjung piai is to be another white elephant.

Do us a favour, tell us which analysts you spoke to? Which one has stated that?

Cannot/Will not do it? We all know why.

Once a liar, always a liar.

Hmm, does the tone/subject matter of these postings sound as familiar to me as it does to anyone else on this forum? :p When a new user account starts screaming, 1MDB! 1MDB! It sounds like an echo of someone else.

Next up, there might be some statements blurted out against "Desmond Boey", the "COO of Benalec".

Oh and for the record, Jho Low is not a substantial shareholder in Benalec. Or if he does, the amount is small (less than 1%) based off the latest shareholder registries.

Calling for all rational readers of this forum to report these postings for abuse.

Constant spamming (with different accounts) is annoying.

Update on Pengerang's DEIA submission:

http://www.doe.gov.my/eia/eia-reports-under-review-peia-deia/

The DOE has finally updated their site to reflect the submission.

Looks like some of the dates I got were off by a few days.

The submission date is stated as 23 Jan 2015. (though management had said it was done on the 21st - might be a miscommunication with the consultant)

Their decision is to be made on 22 April 2015. (89 days versus their KPI of 84 days, heh)

Heh, and whilst I was typing this up, the jenius got suspended (not my doing). Ahh, silence can be golden at times.

...

I have no clue why you would want me to call that number. Ask what?

If you're referring to my analysis posting here and the lack of confirmation of certain bits of information...

Well, of course some people would not realise (or care, I suppose) that it is Chinese New Year. During this period a lot of people are on leave.

I could of course be an ass and call those who are on leave to get answers to questions that I may still have. But I would prefer to be professional about it and only speak to them when they get back to work.

And I have sufficient contact numbers, thank you. I do not know why you felt it absolutely necessary to put that link up.

Please, just be silent. I would be so much happier if that were to happen. Or go to KLCC and jump, as you very crudely told me to do if Tanjung Piai's DEIA decision was not made (which DID happen on the date I specified).

It's bad enough we have jjwong's return to look forward to in two days time, from his latest suspension by the forum. No doubt he will come back with a blaze of glory on directors remuneration once again.

I was so enjoying the silence on this forum without him, the great gasbag and also the jenius of course. Now it is broken.

Oh my god....he used to work for another company! What a horror!

That link shows, last online, 6 years ago...

As per usual, one jenius on this board still insists on making a mountain of a molehill. Although in this case I do not even see what the molehill is.

Since one cannot find fault with Benalec, one has to try and make faults up.

Please, just go away. Come back after March when you said Najib would make a decision on Tanjung Piai's DEIA.

Cheers guys. =)

splendid_ignorance: That is definitely the major catalyst everyone is looking forward to.

As we have less than 4 months to go before the term sheet expires, I do not expect an off-taker to be signed up by then. You can tell that Benalec's management is somewhat frustrated at the pace of things.

In the meantime, I do not really expect any major news to occur, excepting smaller catalysts such as further land sales. Management stated they were in the later stages of negotiations for such sales with different buyers. Whether any deals are made of course remains to be seen.

It is the post-June period I am waiting for. I am making a personal assumption that the term sheet will not be renewed. At that point, even a small off-taker grabbing the first 100 acres in Tanjung Piai would show that there is a real interest in the area.

Once the first sale is struck, then it should be much easier to secure the next batch of off-takers.

Simon Lau: Cheers =)

9. Tanjung Piai (Concession size - 3,485 acres)
Firstly, we have to recognise the fact that there is a binding term sheet with 1MY SOT for phase 1 of Tanjung Piai (1,000 acres). The binding term sheet disallows any negotiations for that part of the concession with anyone else except through 1MY SOT.

No such exclusivity exists for the rest of the concession though.

In the bigger scheme of things though, the term sheet expires on 11 June 2015. From what I have been told, the delay is not on Benalec or 1MY SOT's side, but the off-taker's side (a state investment arm from the middle east).

It is not that far to the expiry date (4 months). It should be interesting to see what happens then. Management has indicated that there is keen interest coming in from other parties, but they cannot do much with regards to phase 1. Should the term sheet be extended once again, then you can be fairly certain that a deal is just around the corner. I do not think Benalec would want to extend it again if they believe nothing is to come of it.

The point here is that ground has already been broken in Tanjung Piai. Whilst Benalec has decent cash flow to look forward to to fund the work (the ultra Harmony payments, Ultra Green monthly progress claims, RM200m convertible bond - funds which are expected to be released before the middle of this year) and they can keep things going for at least the next couple of years, they do have to prove that they can deliver on Tanjung Piai.

Management did not look too concerned regarding 1MY SOT though. With other potential off-takers willing to swoop in to fill the void, I believe that they are confident of securing their first off-taker within this calendar year (2015).

Of course then comes the question of how big a stake would any other off-taker claim. The advantage of having 1MY SOT as an agent is that they would likely be off-taking the entire 1,000 acres to the middle eastern investor. This would give Benalec a strong visibility for at least the next 3-5 years. Compared to someone coming in and grabbing 200 acres which only gives visibility for a year.

One interesting point about Tanjung Piai. In Johor, you can apply for and receive the land title before you have even reclaimed the land. The cost to Benalec here is the land premium. However, it is safe to assume that is a fee that Benalec will be willing to pay for at least part of the concession in order to speed things up.

Also, as a final view of my own, I think it is safe to say that eventually Benalec would probably go the Dialog way in either owning and leasing out oil storage terminals or even joint venturing with others to run terminals of their own. The idea here is to break the cycle of lumpy earnings and at the same time to gain some visibility in the form of more stable recurring income.

However this is likely to come later rather than sooner. An off-taker needs to be secured for a decent size of Tanjung Piai to show that the project is viable. Once that is proven, going the lease/JV venture would be far easier to do.


10. Pulau Indah
I regret that at this time I am unable to post clearly about Benalec's Pulau Indah concession. I thought I had all the answers in the discussions but I was somewhat distracted with my focus being on issues regarding the Johor and Melaka concessions. I could post what I have learned, but I am uncertain of the accuracy of some of the facts that I have on Pulau Indah.

As the CNY period is still on, I will only be able to clarify with management later on regarding this topic. Once I have done so, I will post a further update.

Just to clarify though, Pulau Indah is not a critical part of Benalec's concessions. Its valuations (according to my figures) should be less than RM100m. It is a nice sweetener should it be sold, but if nothing happens on that front, the world should still go on.


11. Conclusion
I hope my postings here have been informative for rational investors who read it as I have tried my best to ensure the accuracy of my postings.

Should you have any comments or criticisms (please lah, rational criticisms if any, would be appreciated, not the #simplytembak one liners) I would be delighted to hear and respond to them.

Also, Kong Hee Fatt Choy to the readers of this board. May this year prove to be an even more prosperous year.

7. Future sales (Melaka concession)
One should realise by now that as an investor in Benalec, you really have to be in it for the long haul. With lumpy earnings, any sales announced now would likely be enjoyed only in the latter half of FY16 or the early half of FY17.

There are not many instant / quickie sales although in some cases you can see that things are done quickly i.e. look at Jadeline Multiple 19 June 2014 to 19 Sep 2014, 90 days. Obviously this is for land whose titles Benalec already holds in hand. (the 6 month waiting period for land applications can be a real killer)

One of the questions I did ask was how much land does Benalec still have in its concessions for sale. Reading the differennt analyst reports, I could never get a sense of an accurate figure.

Finally I got the answer that I wanted.

Accoding to management, within its Melaka concessions, Benalec has 529 acres of unsold land.

Of this total, 289 acres have been reclaimed, whilst 240 acres are awaiting reclamation.

These figures are nett entitlements (meaning after deducting the state government's 1/6th share as well as the original concessionaire's share).

What does this mean in terms of monetary value? At RM42 per square foot (which is Benalec's historically transacted price for the past several sales), the value of reclaimed land awaiting sale is RM528.73m.

The value of the unreclaimed land awaiting sale is RM439.08m.

I neglected to ask if the land titles have all been issued for the reclaimed land, but I am assuming a good part of it has been. (there is a cost involved since you have to pay the state land office the land premium per square foot when you apply for the land title)

Whilst smaller parcels of land that are sold can be settled quickly (Jadeline Multiple's 15 acres for instance), I assume that buyers of larger plots would have a lot more leeway in negotiating for better payment terms (as can be seen with Jadex's 58.36 acres).

According to management they are in serious discussions with several large buyers and hope to close a couple of deals within this financial year.

However, again I have to stress, due to the lumpy earnings nature of some SPAs, one should not be looking for instant gratification in any large deal.

In other words, the unsold value of Benalec's Melaka concessions is:
528.73m+439.08=RM967.81m

of which more than half has been reclaimed.

Now the question on everyone's mind is of course, how much land can they sell? These are trying times that we are going through worldwide.

If you would like to base it on past precedents, For CY2014 (starting from March 2014 - ignoring the Teobros sale which was a resale of land that was rescinded back to Benalec), Benalec has announce SPAs for a little over 200 acres of land in Melaka.

Considering that the company had to get back onto right footing after the mess with the two older brothers, it seems like a commendable figure for the year.

I do not know if they can match it, but I am of course genuinely hoping that they can match if not exceed that figure.


8. Pengerang (Concession size - 1,760 acres)
I was informed that the submission for the DEIA was made on 21 January 2015.

Checks on the DOE's EIA reporting site still do not reflect this. In fact another entry has appeared under the review list since Benalec's submission date for an unrelated project (6 Feb).

I am going to assume that this is typical government efficiency at work (you know how it is, cinta IT, suka IT - tapi tak update IT). Assuming that the submission date is accurate, and based off an 84 day KPI, a decision on the submission should be made by 15 April 2015.

Management has indicated that whilst they are always willing and looking to sign deals, Pengerang may be placed on a back burner somewhat until the Pengerang Integrated Petroleum Complex (PIPC) develops further. I never realised how large the PIPC area is (20,000 acres) but can understand the sentiment of wanting to wait.

As Benalec's Pengerang concession is aimed towards fabricating yards, it makes sense for other investors to move into PIPC first, and then to offer the Benalec Pengerang site as a more attractive prospect (in terms of fabrication services).

5. Jadex Land
On 2 Dec 2014, Benalec signed an SPA for the sale of 19.36 acres of land _to be reclaimed_ to Jadex Land for RM35.42m.

[http://www.bursamalaysia.com/market/listed-companies/company-announcements/1813105]

On the same date, Benalec signed an SPA for the sale of 39.27 acres of land _already reclaimed_ to Quality Paradise.

[http://www.bursamalaysia.com/market/listed-companies/company-announcements/1813109]

Quality Paradise is a subsidiary of Jadex Land.

For informational purposes, prior to this, on 19 June 2014, Benalec signed an SPA with Jadeline Multiple for sale of 15 acres of land for RM25.48m. This was completed on 19 Sep 2014 (which helped the recent 2QFY14 results a fair bit).

This deal was not announced to Bursa since the amount was below disclosure requirements.

Jadeline Multiple is a sister company of Jadex Land with common shareholders/directors.

Just to make it clear, the parcel sold to Jadex Land has since been fully reclaimed.


Again with the issue of lumpy earnings, this one can be a little more confusing.

On signing the SPA, the buyer paid 10% as a downpayment.

Up to 6 months from signing the SPA, the buyer pays another 20%.

Up to 9 months from signing the SPA, the buyer pays another 30%.

Up to 12 months from signing the SPA, the buyer pays the final 40%.

[Yes, yes, lawyerly types can read the fine print and nitpick on this last bit, I am not going to elaborate too much on it, since I am sure many of the readers who have reached this far already have droopy eyes. Hell, my eyes are glazing over reading that last bit in the announcement myself. Feel free to read the bursa announcement if you want to know more]

Note, the buyer can get an automatic 3 month extension if they cannot pay on time (subject to 8% p.a. interest charges).

Soooo, when does Benalec book the revenue? Yep, upon receipt of the final payment.

Here you can see an example of a contract where the cash flow is likely to be ahead of revenue.

Both deals are expected to be completed in 4QCY15 / 2QFY16, resulting in a net profit of RM28.1m.


6. Earnings for FY 2016
Whilst I am somewhat pessimistic about FY15 being a stellar year, I do believe FY16 would be a very good one.

Consider the following as net profit figures from contracts announced and in progress:

Ultra Harmony (assuming all 4 stages are booked in FY16) - RM58.49m
Ultra Green (12 months progress billings at RM1m profit a month) - RM12m
Jadex Land - RM28.1m

Offset against an estimated administrative and operating expenses figure of RM30m for FY16 (and assuming other segments do not drag the bottomline too badly):

58.49+12+28.1-30=RM68.59m

Again these are simply estimates, I cannot say how accurate they are, but I do not think I am too far off the ballpark. Some things are probably incorrect, i.e. the reclamation works for Ultra Green will likely be ahead of, rather than simply on schedule.

Assuming my figures are correct, the PER for FY16 is 9.7.

4. Ultra Green
On 5 May 2014, Benalec was awarded a job by Ultra Green to reclaim 415 acres of land for a cash payment of RM203.89m.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/1614029

For informational purposes, Ultra Green is a an indirect subsidiary of Oriental Holdings. Ultra Green was awarded a reclamation concession for 1,125 acres in Melaka back in 1994. Of this amount, 624 acres have already been reclaimed, all by Benalec.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/1815077

Note, whilst this anouncement here states the reclamation contract is for an area of 275 acres, this in reference to what Ultra Green terms as Phase 2A, Phase 3A and Phase 3B.

An additional area to be reclaimed known as Phase 4 (140 acres) was also awarded to Benalec, although confusingly it was not disclosed by Oriental on 3 Dec 2014. Benalec's announcement on 5 May 2014 (6 months earlier) does refer to Phase 4. Management has confirmed that their contract is for reclaiming 415 acres.

Of interest here is that Ultra Green still has an untouched concession of 64 acres (this is out of an area of 86 acres, of which 22 acres is earmarked as a lagoon). I assume that this could be a future contract for Benalec. Using a simple calculation based off the RM203.89m for 415 acre contract, this 64 acres would be worth around RM31.44m if it should be awarded in the future.

As a note of interest, all previous reclamation jobs that Benalec did for Ultra Green was settled via payment in kind. It looks like Oriental wised up though to the fact that profit wise, it makes more sense for them to assume some of the risk via a cash contract (especially since Benalec has been delivering on their jobs all this while).

In Benalec's announcement for this contract, they assumed commencement of works in the 3QCY15. Unfortunately, it took Ultra Green somewhat longer than that to get regulatory approvals from the different authorities to get the work order.

Benalec has taken possession of the site in late January / early February 2015.

They have 30 months to complete the job. As this is a cash job, there will be monthly progress billings by Benalec which will be booked as revenue, and this should mitigate the issue of lumpy earnings somewhat for the duration of the contract.

Assuming the standard construction industry's net margin of 15% (it could be higher, although I doubt it is lower), Benalec should earn RM30m over the period of the contract. If you divide the value of the contract over the 30 month period, you get revenue and net profit of RM6.75m and RM1m respectively a month. Or RM20.25m and RM3m per quarter.

Of course this is likely to be boosted on the first month's billings (materials on site).

Assuming a 30 day payment period (this is my assumption), we should see at least 1 month's billings booked for 3QFY15, and 3 months billings for 4QFY15. Using the average figure above, that would come to RM28m in revenue and RM4m in net profit for 2HFY15. This is of course a simplistic view of things and may not be accurate. For all I know the billing cycle could be 45-90 days. (I did not confirm this point with management)

The contract does not include the cost of rock revetment works (one of the methods of construction on the shoreline to prevent erosion of your reclaimed land). A rough estimate of this works is 20% of the contract value, meaning an additional RM40m in revenue. As I am uncertain when revetment works are actually done, I have not included it in any of my assumptions for FY15.


For comparison purposes, when included with the Ultra Green contract (assuming monthly billings - RM4m net profit for FY15):

Assuming none of Ultra Harmony's stage are booked in 2HFY15. Net profit will be around RM19.5m. (PE of 34.2 for FY15)

Assuming only stage 1 of Ultra Harmony is booked in 2HFY15, net profit increases by RM14.81m, to RM34.31m. (PE of of 19.5 for FY15)

Assuming stages 1 and 2 of Ultra Harmony are both booked in 2HFY15, net profit would increase by RM29.32m, to RM48.82m. (PE of 13.7 FOR FY15)

3. Ultra Harmony
Benalec signed an SPA to sell 128.52 acres to Ultra Harmony on 20 March 2014.

[http://www.bursamalaysia.com/market/listed-companies/company-announcements/1571525]

Of which a circular on the deal was announced on 10 June 2014

[http://www.bursamalaysia.com/market/listed-companies/company-announcements/1652405]


Remember my posting above about lumpy earnings (Item 1)? If you had not fallen asleep whilst reading it, I would point out here that the SPA with Ultra Harmony was to sell the land in 4 stages of roughly 30 odd acres each.

What does this mean? It means 4 separate land title deliveries, and 4 separate payment periods. Meaning that once a stage has been paid in full, it is recognised and booked as revenue and earnings.

Benalec did this because of the large cash flow requirements for the deal, and it would have been stretched to its limit if it were to be paid only at the end of 100% completion (not just in terms of cash flow, but also booking of revenue)

@Simon Lau asked a very pertinent question after the latest quarterly results (2QFY15) were released, he highlighted the fact that a little over 10 acres of land has been reclaimed for the Ultra Harmony job since the previous quarterly result (1QFY15). [The exact figures are 10.2 acres reclaimed in 72 days - from 73.8 acres reclaimed on November 12 to 84 acres reclaimed as at February 4]

I asked management about this and was told that they had redeployed the bulk of their assets on other jobs during this period.

One rationale for this was that the company is actually quite a bit ahead of schedule for this job. They are looking to complete this entire job (meaning fully paid and booked) by 1QCY16/3QFY16 [This is stated in the latest quarterly notes]. In the original circular issued about this deal, they had estimated full completion of Stage 4 by July 2016. Meaning they are ahead by at least 4 months.

To be fair to the buyer, you cannot always unilaterally accelerate a deal as the buyer has their own financial/budgetary planning on when they expected to pay you.

It is like me coming to you and building you a house for cash. If I tell you it will only be ready in December 2015 (which is when you pay me) and I then come up to you in June 2015 and tell you it is ready and I want my money now, you may be somewhat less than enthusiastic if you do not have the funds ready.

Granted that the buyer in this case has deep pockets (the popiah king of Singapore - google him if you want to know more) which is probably why the job could be fast tracked to finish about half a year early.

To give you an idea of when they intend to complete the reclamation, if you assume that payment is to be completed by the end of March 2016 [as per the latest quarterly notes], you can backtrack it by adding 3+1 months for payment and 6 months for the land title, meaning that the land has to be fully reclaimed by end May 2015.

I asked management about this and they are confident of completing the job ahead of this target. They have a little less than 3 months (based off the Feb 4 figure) to reclaim 44 acres. As they have been reclaiming up to 3 acres a day at times, it should not be too difficult for them.

In the original circular, it was stated that they expected completion of Stage 1 to occur in May 2015 (meaning it should be booked as revenue in 4QFY15). I was informed (by others) that they might miss this deadline though. (Note this is uncertain and wholly my view)

One thing is for sure though, it seems likely that if stage 1 does not get booked in 4QF15, it (along with stage 2) should be booked in 1QFY16. Meaning that revenue for the period Jul-Sep 2015 should be at least RM117.89m with net profit at RM29.32m. (Note, this figure does not include offsetting administrative and operating expenses or gains/losses from other contracts/sectors for the period - more on this below, see Item 4. Ultra Green)

2. Earnings for FY15
There are still 6 months of accounting to be booked for this financial year.

Revenue and Net Profit results and estimates by research houses

1HFY15 (Actual) - RM 108.1m / RM15.5m

FY15E
Affin Hwang - RM250m / RM54.7m
AM Research - RM307.3m / RM47.9m
BIMB - RM232.4m / RM29.7m
CIMB - RM215.5m / RM54.58m
Kenanga - RM247.5m / 65m

Based off my points in Item 1 above, I believe that for the 2HFY15, Benalec will not be booking spectacular earnings. There is one land deal to be booked in Q3FY15 (Faithview Supreme / 29.54 acres @ RM51.47m) as stated in the latest notes to the account (item 22.1).

The bursa announcement for the sale stated an expected net profit of RM15.5m for this deal.

[http://www.bursamalaysia.com/market/listed-companies/company-announcements/1445317]

However, if we annualise the company's administrative and other operating expenses for the other 6 months of the year we come to a total of about RM15m, thus eliminating almost the entire net profit from this deal.

Granted there may be other land sales I am unaware of to be recognised during this 6 month period (these are sales that are small enough that no announcement to bursa was made) but I believe such gains will be small and offset against

Benalec's other business segments (Vessel Chartering and Ship Building) which at the moment are value added cost centres. (Intangible benefits to the company, but loss making on paper)

I have to highlight that work on the Ultra Green contract has started and should also be imputed into earnings for 2HFY15. (see below, Item 4. Ultra Green)

I recognise that there is some assumption that part of the SPA to Ultra Harmony should be recognised within FY15 but I am going with the conservative view that this is unlikely to happen (more on this below). I do believe that first two stages are to be booked around the same time, although whether they make the cut for the period of FY15 is still up in the air.

So for the moment, I disagree with all 5 research house estimates as I do not believe any of Ultra Harmony's stages will be booked in FY15. This is my personal opinion, and should not be viewed as gospel truth.


Strictly speaking, from a PER view, Benalec's current share price would be considered overvalued for FY15 if this is so.

However, do carry on reading my postings if you would please, to take into account the prospects as well as FY16 expectations.

Simon Lau: The answer to your question is listed below under Item 3.

Benalec's 2QFY15 results (Sep-Dec 2014).

[http://www.bursamalaysia.com/market/listed-companies/company-announcements/1874449]

Overall it was not an inspiring period, revenue was decent but net profit was very small. This again highlights the fact that Benalec's earnings are very lumpy by nature. I am not going to do a detailed analysis of the latest quarter. Suffice to say that I do not see anything alarming.

I would like to note that I am happy that the past two quarterly results have come out earlier than expected. 1QFY15 was released on 18 Nov (versus 26 Nov for 1QFY14), while 2QFY15 was released on 11 Feb (versus 28 Feb for 2QFY14). I am hoping that this trend improves and we might see quarterly results being released within a month of the closing of that financial period.

As any serious fundamental investor knows, quarterly results are the essential bread and butter for such analysis. Also, having the results released earlier means that you don't join the 95% herd of listed companies on Bursa who release their results only within the last couple of days before their deadline. This makes it very difficult for a single company to stand out during that period.

After the release of their latest quarterly results, I had the pleasure of having a discussion with the management of the company where I received quite a number of answers to my queries.

I have tried to order what I learned as best as I can.

Terms to note before you read my analysis/views (I am stressing this here since some readers do not seem to understand this):
FY - Financial Year. Benalec's FY is from July 1 - June 30.
CY - Calendar Year
1HFY - First half of the FY, July 1 - Dec 31
2HFY - Second half of the FY, Jan 1 - June 30

Note that this series of postings was written during the CNY period, and I have used the pre-CNY closing price (83.5 sen) as reference for any calculations.

1. Lumpy earnings
I need to go into a bit of detail here, so bear with me if your eyes start to droop as you read this.

What does it mean by lumpy earnings? It usually means that revenue is booked in bulk in one go.

To put it in comparison, a company with progress earnings (for example, a general contractor) would usually bill their clients on a monthly basis. A general contractor which does an average of 5% of the whole job every month would book 5% of their revenue each time they bill their client.

If the job is RM100m, 20% net profit, 20 month period, after 3 months (every quarter), the company would have booked RM15m in revenue and RM3m in profit. (This is a rough example)

Now in Benalec's case, here is an example of lumpy earnings [Note that this is just a theoretical example]. Let us assume a piece of land is sold on 31 Dec 2013 at RM60m with a 25% net profit.

The buyer pays 10% down as a deposit.

The land is partially reclaimed that will be fully reclaimed in 3 months time (31 March 2014). Once done, the land title application will be made to the land office. 6 months is usually needed for land title applications (30 Sep 2014).

Once the land title is issued, the title is delivered to the buyer's solicitors. The standard sale and purchase agreement (SPA) by Benalec states that the buyer is given 3 months from the title delivery date to pay the balance of 90% (31 Dec 2014). In the event the buyer does not pay up in time, they get an automatic 1 month extension (31 Jan 2015). However, during this 1 month extension they have to pay interest at the rate of 8% p.a on the balance.

If the buyer does not pay up, it is considered a default. Benalec keeps the 10% deposit and they part ways. This has happened before - buyers Highbond Capital and Gigayear Revenue defaulted.

[http://www.bursamalaysia.com/market/listed-companies/company-announcements/1555185

See item 10.1.a for details]

Of course as a caveat, if Benalec and the buyer so choose, they can come to an agreement (strictly voluntary) for any further extension.

Now when does Benalec book this RM60m as revenue? It is only booked when the final payment is made.

In other words, you have a land sale on 31 Dec 2013 (2QFY14). The 10% deposit is considered a liability (Deferred Revenue in the Balance Sheet) and is not booked as revenue during that period. Assuming that the buyer pays up after the 3+1 month period, 100% of the revenue is booked on 31 Jan 2015 (2QF15). In other words, such a sale takes over 1 full year before it is booked as revenue.

Why is it done this way? To comply with general accounting standards, and to keep the auditors happy. The auditors take the view that a default is always possible, and you only walk away with the 10% deposit. They do not want you to book the whole revenue and then have to reverse it upon a default.

Also not all buyers pay up at the very last minute. Some may choose to pay within the 3 month period (to avoid the interest on the 4th month).

simon lau: Will do a proper write up next week. Right now a bit rushed because of CNY round the corner.

Also your question on the amount of land reclaimed in 3 months is apt and pertinent. Will post when I find out more.

Haven't had time to draft a proper posting on the latest quarterly results.

Let me clarify one point though for all rational investors.

Benalec is a profitable company. It is not a loss making company. Its retained profits exceeds its paid up capital which makes PN17 extremely unlikely to happen.

PN17 is based off losses and accumulated losses.

A failure of the bond issue (which is nowhere near to happening as far as I know) has absolutely _nothing_ to do with PN17.

[/sarcasm] Only a jenius would claim that it is.

Then again, one jenius still believe that Tanjung Piai's DEIA approval will only occur after March. And that the DEIA approval _HAS_ to be announced by Najib. [/sarcasm]

@Chong Kong Hui: If you'd take the time to read the bottom of that link you posted, you'll find this:

"Remarks :
Gender: Male

The Board of Directors had on 11 February 2015 approved the redesignation of Dato' Leaw Seng Hai as Group Managing Director/Chief Executive Officer with effect from 11 February 2015.
"

ykloh: MD to Group MD/CEO.