Give SBC Corp's small marketcap/small size and the potential of JQ, no matter how you slice it, the project is going to contribute a lot to this company.At the current price it is still VERY undervalued.
If you were to take a look at the whole JQ project (go to the site), most people would agree that the whole concept is quite good & well planned. If fact, I think the whole GDV could potentially be more than RM1.8bil.
DESPITE its high CAPEX requirement and sensitivity to economic cycles, Suria (fundamental: 2.3/3; valuation: 1.8/3) generates steady cash flows. A key catalyst going forward would be the long-awaited Jesselton Quay project.
After selling its financial services business in 2003, Suria secured a 30-year port concession to manage major ports in Sabah the following year. Predominantly an Import/Export port operator, Suria’s cargo volume is closely correlated to Sabah’s economy and, in particular, palm oil exports.
While revenue fluctuated within a 10% band over past five years, Suria managed to maintain gross margin at over 40%. Revenue for 2014 rose 4.2% y-y on the back of 7% increase in container volume, although earnings dipped 3.9% due to higher operating costs.
In 2013, the company signed a JV agreement with SBC Corp Bhd (SBC) ( Financial Dashboard) to develop the Jesselton Quay project — a waterfront mixed development project worth RM1.8 billion — in Kota Kinabalu. In return for its land, Suria would receive a minimum guaranteed RM324 million from SBC over the 8-year development period. Approval for the project is expected by mid-2015.
The port operator is majority-owned by the Sabah state government (51.6%) while institutional investors collectively hold another 19.2%.
Suria has a strong balance sheet with net cash of RM75.0 million, or 26.5 sen per share. Net margin and ROE for 2014 stood at 20.2% and 6.8%, respectively.
Suria currently trades at below-average valuations, trailing P/E of 11.8 times and 0.8 times book. In comparison, Bintulu Port, Westports and Integrax all trade at trailing P/E of above 20 times.
Suria has a minimum 35% dividend payout policy. An interim dividend of 3 sen per share for 2014 was paid in December. Total dividends ranged from 6 to 7 sen per share from 2011 to 2013, translating into a yield of 2.6% to 3.0%.
extract from Suria's report: "According to the management, the development plan for the project is still awaiting approval with December set as the target approval date. "
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Flylikeg6
58 posts
Posted by Flylikeg6 > 2015-04-15 14:20 | Report Abuse
That's the reason they changed the chairman