Your are right on Point 4, it was my mistake. Now corrected. Thanks for pointing out.

Your point No.3 is not correct, the disposal of any shares in subsidiary will result in gain or loss of disposal in other income or other operating expenditure.

By taking up the effect, the disposal will need to take into the cost of investment in the subsidiary, that's RM918m. So the cost for 40% will be RM367m.

See below double entries for capturing the disposal:

Dr Cash RM1,130m
Cr Gain on disposal of subsidiary RM763m
Cr Non-controlling interest Rm367m

Jay, thank you for comemnt, please read my statement below which is also in the article

Guidance of Reading:
EPF is valuing Kesturi at RM2.8bil and is willing to pay cash RM1.13bil for 40% shares in Kesturi.

By referring to Audited Balance Sheet of Kesturi (Table 6), Kesturi is the one who issued Islamic Medium Term Notes & NOT Ekovest. (Refer to old news here)

So, EPF is buying the toll business with loans & liabilities in Kesturi.

As such, by grouping the assets & liabilities of Kesturi into Cost of investment in Kesturi at Group level of Ekovest, we can see investment in Kesturi of RM918m in the Table 5.

By classifying Kesturi as standalone investment by Ekovest, we can work out actual ratios for other businesses of Ekovest.

Thank you, moneySIFU, hope this article help in understanding debts structure of Ekovest.

Confuse, my reply about debts of Ekovest is written in my article, thank you.

EKOVEST: Net Debt Ratio=20% & Net Cash Per Shares=RM1.01 (after 40% sale in Kesturi) (Part 2)
http://klse.i3investor.com/blogs/wealth123/105048.jsp

EKOVEST: Net Debt Ratio=20% & Net Cash Per Shares=RM1.01 (after 40% sale in Kesturi) (Part 2)
http://klse.i3investor.com/blogs/wealth123/105048.jsp

EKOVEST: Net Debt Ratio=20% & Net Cash Per Shares=RM1.01 (after 40% sale in Kesturi) (Part 2)
http://klse.i3investor.com/blogs/wealth123/105048.jsp

Confuse, my next article will answer your question about high debts, please stay tune. Thank you.

Icon8, I agreed with your statement on Silk is cheaper now, please go ahead to buy silk, wish you good luck.

In case you don't know, please write down the following:

full name is SILK HOLDINGS BERHAD.
the counter code is 5078

Icon8, good questions, please call EPF tomorrow to tell them what should they do, better buy Silk, much cheaper.

Also, please tell them don't play play with your retirement fund, you are very concerned now.

Great article, well done!

The orderbook in the report is not correct, MD said in the interview that the current oustanding construction order book stands at RM6.32bil

http://www.thestar.com.my/business/business-news/2016/09/24/ekovest-addresses-critics-on-highway-sale/

With same construction speed & without new order, the year of the order can last.

No, orderbook cover = total outstanding order book divided by latest year's revenue derived from construction division.

UOBKH Analysis Report on Ekovest with Title: Rise of the Duke
https://www.scribd.com/document/325141281/UOBKH-Ekovest-Rise-of-the-Duke-230916

Special thanks to ronnietan for the great sharing.

We like Ekovest for its:
a) undervalued concession asset whose value has yet to be appreciated,
b) its huge construction orderbook backlog that is significantly above that of other construction companies under our coverage, and
c) the good locations of its landbanks.

Initiate coverage with BUY and target price of RM3.00

Ekovest is a deeply undervalued contractor and concessionaire. Its recent
announcement of the 40% sale of DUKE 1 & 2 to EPF implicitly values just one of its many assets at RM2.8b, significantly below its RM1.7b market cap. Aside from that, the group was also recently granted a 53.5-year concession to build and operate a new 50km urban expressway, which would support the construction arm’s medium-term profit growth and provide a longer-term boost to valuations and earnings. Initiate with BUY and an SOTP-based target price of RM3.00, implying FY18F PE of 18.2x, supported by a three-year earnings CAGR of 68%.

---------------------------------------------------------------------
Extract from UOBKH Analysis Report on Ekovest with Title: Rise of the Duke
https://www.scribd.com/document/325141281/UOBKH-Ekovest-Rise-of-the-Duke-230916

Thank you, ronnietan, just back from outside & received the report, will put up here later.

The advisor of the deal, Astramina's Wong, says the details would be announced in 30 market days. She hints that the returns to shareholders is likely to be higher than taht of the current yield of about 1.5%.

I think what paperplane is correct, Ekovest is very likely to distribute special dividend to shareholders, look what was said by the MD in the Star Bizweek.

"On the proceeds of sales, Lim says the company needs some vitamin M to build up its war chest for its expansion and will give back some returns to its shareholders"

My immediate term (6 months) target price = RM3

Long term (2 years) target price = RM4.5

The highest cover ratio among all construction companies listed at Bursa.

After interview with the Managing director of Ekovest, he confirmed that the construction order book in hand now stands at RM6.32 bil!!!

You are expecting profit of RM632 million over the next 3.5-4 years from construction division only!!!

Thank you, moneySIFU, I can't talk much about my relationship with bizweek. Hope you understand.

Toll business is kind of guarantee thing, if the highway is within city, especially in KL or PJ

Hi Paperplane, any thing want to add? So I can dig into it.

Thank you, Jon Choivo, I will try to write from different areas in my next few articles.

1. Financial position & debts
2. Toll & construction business
3. Property & EkoCheras

Think need 3 more parts

Welcome, paperplane

Or you can email to me at wealthwizard.invest@gmail.com, I will help to put it up here.

Thanks for sharing, ronnietan, do you mind if you can share the report with us?

Agreed to what you said, for company like Ekovest, past historical figures were merely an indication of what were happening. It supported the ability of a company for what can it do in future.

I will explain this area in my part 3 or 4 article then.

Thank you for all the feedback & replies.

Since many are concerned about debts of Ekovest, thus the priority of my next article will focus on the detailed study of Balance Sheet & debts of Ekovest.

MRT will ease certain area traffic, but most people will still choose car travelling due to whatever reasons.

Look at Litrak where LDP is main road across Petaling Jaya now.

Duke 1, 2 & 3 will be main roads across KL. Imagine the huge potential.

Kelly89, Duke 1 & 2 are collecting money no matter how's economy doing.

Duke 3 construction is in place already, all construction order books are contracted.

Unbilled Property Sales are also signed & contracted, money will come once construction is completed to the particular completion percentage.

So, it is bullet proof to external economic conditions.

Everything will not possible if no money, that's reason Ekovest asked money from shareholders to buy Duke 1 via right issues in previous years.

With all now start to bear fruit & delivering, there is only one way to go, UP!

Ekovest has been staying low profile & working very hard in planting seeds at various areas.

With the cash sale of 40% stake in Kesturi, no right issue or loan drawdown are needed to go BIG!!!

More than triple of current market value in 2-3 years time!!!

The valuation (EV/EBITDA of 17 times) is justified with all previous purchase/privatisation of highways, EPF has been consistent.

-------------------------------------------------------------------------------------------------
Back in 2010, UEM Group Bhd and the Employees Provident Fund had acquired PLUS Expressways for RM23bil or RM4.60 per share.

“When PLUS Expressways was privatised, the valuation was also around EV/EBITDA of 20 times,” said one property analyst.

Source: http://www.thestar.com.my/business/business-news/2014/01/22/mrcb-sells-duke-stake-ekovest-buys-remaining-30-of-highway-concession-for-rm230mil/

One must know, Ekovest is only selling 40% stake in Kesturi, not all.

So Kesturi is still subsidiary of Ekovest & Ekovest will continue enjoy the growth & future profits of Duke 1 & 2.

Many (including me) have thought that Ekovest raise lots of loans to finance the construction of Duke 2.

After reading the audited accounts of Kesturi, I realised that all loans were taken up under Kesturi, not at Ekovest level.

So, Ekovest sells 40% shares with loans to EPF for RM1,130m CASH.

EKOVEST: Doing Great & Ready To Shine, Are You Ready? (Part 1)
http://klse.i3investor.com/blogs/wealth123/104926.jsp

Thank you, moneySIFU.

Thank you, probability

My new article:
EKOVEST: Doing Great & Ready To Shine, Are You Ready? (Part 1)
http://klse.i3investor.com/blogs/wealth123/104926.jsp

EKOVEST: Doing Great & Ready To Shine, Are You Ready? (Part 1)
http://klse.i3investor.com/blogs/wealth123/104926.jsp

My new article, enjoy reading:

EKOVEST: Doing Great & Ready To Shine, Are You Ready? (Part 1)
http://klse.i3investor.com/blogs/wealth123/104926.jsp

My new article:

EKOVEST: Doing Great & Ready To Shine, Are You Ready? (Part 1)
http://klse.i3investor.com/blogs/wealth123/104926.jsp

The Islamic Medium Term Notes of RM1.7 billion is under Kesturi, so the debt is taken care of within Kesturi.

I will disclose detailed balance sheet of Kesturi.

It will be too much info/details if all written in one article, hope understand, thank you.

I will discuss in details about Balance Sheet of Ekovest in my next article

EKOVEST: Doing Great & Ready To Shine, Are You Ready? (Part 1)
http://klse.i3investor.com/blogs/wealth123/104926.jsp