5789CD LBS-CD, LBS-CD: CW LBS BINA GROUP BERHAD (KIBB) - + LBS - REQUEST FOR SUSPENSION 18 Jun 2024, 19:00 LBS - REQUEST FOR SUSPENSION LBS - REQUEST FOR SUSPENSION ILC-18062024-00007 Kindly be advised that at the request of LBS, trading in the Company's securities will be suspended with effect from 9.00 a.m., Wednesday, 19 June 2024 pending an announcement. As such, trading in the structured warrants relating to LBS will also be suspended at the same time. SVP, ISSUERS You are advised to read the entire contents of the announcement or attachment. To read the entire contents of the announcement or attachment, please access the Bursa website at http://www.bursamalaysia.com
In my opinion, the latest announcement is considered a very positive news.
For better understanding, it is advisable to refer to LBS Corporate Structure, as you read through the announcement.
In summary:
LBS subsidiary: Dragon Hill Corporation Limited has entered an agreement with a third party called Huafa Urban Operation (HK) Limited.
An agreement whereupon Dragon Hill will dispose its subsidiaries namely Lamdeal Investments Limited, Zhuhai International Circuit Limited & Zhuhai International Circuit Promotion (HK) Limited, to Huafa Urban, for a consideration sum of RM 124,744,666.47.
Apart from the disposal, Huafa Urban (‘the Buyer’), is also willing to settle off all existing and current debt owing to LBS by Lamdeal Investments Limited, Zhuhai International Circuit Limited & Zhuhai International Circuit Promotion (HK) Limited, with a total debt settlement of 147,877,333.53.
Through this deal, LBS will no longer own the iconic Zhuhai International Circuit in the near future, but it is in the opinion of LBS Management a good decision to dispose this off, as the land which is used to build the Circuit has a leasehold that will expire in 19 years, and on top of that with more stringent regulations being introduced it is becoming harder to operate the Circuit.
Through this deal, LBS will gain an additional Cash Flow of RM 272,622,000, that can be used to focus on new or existing projects and through this disposal exercise, it is estimated LBS will have a disposal gain of estimated RM 80,000,000.00.
All in all it is a good deal, because not only does LBS come out with a net profit gain, but the Company will also be able to reduce the overall Group Debt’s level, and improved Cash Flow reserves.
Hence in my opinion, this is a very positive news.
Despite good news, it is important to have managed expectations. The overall market sentiment in Malaysia as well regional markets are down. This can be seen in most counters being in the red zone, so short-term wise LBS share price might not surge up as expected tomorrow or the day after.
However, long term wise, this disposal exercise will most definitely benefit LBS in long run.
Ecoworld disposed land during the time when overall market is uptrend.
LBS disposed asset during the time when overall market is downtrend.
Likewise with SPSETIA, its share price also did not go up despite successfully disposal of its Johor land worth RM 564 million.
The issue right now is not about LBS performance.
The issue right now is that the overall local and regional market are down, which in turn causes institutional investors to pull out, hence that is why market price of LBS is down.
If you look at Ecoworld, their share price is currently on a downward trend also, and same goes with most of other counters.
Sometimes, looking at all this comments, it does make me wonder if you guys got read the news and keep up-to-date with what is going on OR just 'main' hantam invest only and continuously ask ridiculous questions.
After re-evaluating LBS, the Property Development Industry and the overall Market condition.
I'd say we will have to wait until at least after 2nd or 3rd Quarter Results to gain rally from major investors confidence on the Company.
If LBS can announce a special dividend from the disposal of Zhuhai Circuit or announce project on DC projects, this will most definitely help to further boost the share price.
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....
alfredloo90
59 posts
Posted by alfredloo90 > 2024-06-18 22:42 | Report Abuse
Possibilities of material announcement:
1) DC Project
2) M&A
3) Land Sale
Feeling EXCITED !!!