Posted by iska > 2013-04-07 15:43 | Report Abuse

Recently, I wrote a short note on Iskandar theme play stocks but I forgot to save the link and now I don't really know how to retrieve it. So I thought I would start a new one here. What surprised me was that there was no input from other forumers after my posting as I realized many stocks under this theme play were all going up in tandem. Over in Singapore, there is increasing interest in Iskandar properties; more ads for Iskandar condos and houses are appearing in the papers here, and more agents are touting them to Sg clients. Agents bringing Mah Sing's Meridin (by Mah Sing, at Medini) condo to Singapore have seen buyers packing into their presentation room over the weekend. Astaka in JB, touted as the tallest residential building in Malaysia and Singapore, have entire floors booked by buyers from Singapore before its official launch. The launch price of Meridin, at about M$700 psf, is a small fraction of the M$2,250-3,500 psf a similar condo would sell in Singapore. We can't compare apple-to-apple here, but the figures go to show how "affordable" Johor props are, relatively. I have seen more and more brokers writing reports on the Iskandar theme, and this probably explains the Iskandar stocks' strength recently. While I continue to like the theme, the recent rises has made me take some profit, but over the longer term, I will stay invested. I continue to like the Iskandar land owners like Sunway, Dijaya, Crescendo, Tebrau, KSL, IJM, Ken, etc and those with high visible products there like Mah Sing, WCT, etc. I have dropped UEM and SP Setia as they are a tad too big cap. Muhibbah, Benalec, etc may also has some Iskandar angles. Perhaps someone else can contribute to the topic?

Be the first to like this.

12 comment(s). Last comment by iska 2013-04-09 16:13


204 posts

Posted by reyes430 > 2013-04-07 16:40 | Report Abuse

i have read an article regarding to the recently sharp rise of the share price for those properties companies. Those companies with significant landbank at JB become the favor and the reason of why people buying the share as the properties price at JB are rising.But please bear in mind, there are some companies which held a huge landbank for nothing for over a decade. What we should looking for is a company which able to develop for the land they have and turn it into profit, the faster and efficient the better. I would prefer those with good reputation. I think sunway and ksl will be my top pick. What about you guys?


204 posts

Posted by reyes430 > 2013-04-07 16:45 | Report Abuse

hey iska,i am intereted on the research conducted by those IB as you mentioned. So far i have only read CIMB ones, could you provide me the link for others? thanks


944 posts

Posted by alexisvics > 2013-04-07 16:52 | Report Abuse

Don miss out Kulim which has a lot of land in Johor, soon or later its plantation land might change into residential or commercial land.


103 posts

Posted by sh2383jbt > 2013-04-07 17:12 | Report Abuse

I prefer Sunway and kimlun, more up trend than others.


51 posts

Posted by iska > 2013-04-07 18:29 | Report Abuse

Hi reyes430. I am not sure how to send links, but Kenanga, Maybank KE, Stanchart, Hwang DBS, among others all have reports on Iskandar. U can google these titles for eg: The stars are aligned for iskandar developers.

U can also go to stock quotes in this site and look at some of the reports put up by diff broking house.

I like Sunway, but co is raising money via rights issue. I wonder how that will affect the warrants, which I own quite a bit.

I know a bit ahout Kim Lun but I can't seem to find any report on how much land they own in Iskandar.

I missed Daiman cos I thought it was not liquid enough for me, but DBS Hwang's report last week propelled the stock to beyond my reach now.

While interest is definitely rising in Singapore for Iskandar properties, I think it's still relatively early days yet, as there is still a huge amount of fear among Singaporeans with regards to safety and security in Johor.

So it's not like everyone is dumping everything they have in Iskandar properties yet. So, we are closer to the "fear" side than the "greed" side of the bar.


5,163 posts

Posted by anbz > 2013-04-07 18:40 | Report Abuse

why iskandar? what about greater kl???

Posted by hattorihanzo > 2013-04-07 18:43 | Report Abuse

bcoz it's just media playing the news :)


660 posts

Posted by hw0706 > 2013-04-07 19:06 | Report Abuse

if the property in Johor is great than the company who have land will benefit in long term. Land for development will be getting less and less.


204 posts

Posted by reyes430 > 2013-04-07 21:18 | Report Abuse

Hi Iska, yes i agree with you, its more towards uncertainty now, my knowledge on property development is poor as well. However, if the proposed building of rapid transit to SG is on(have it?) its indeed a positive catalyst for the property there. So instead of betting on those companies with great landbank, maybe one should look for those really good property developer. Sunway's construction units can contribute to its bottom line too, which is why i prefer. I think maybe somebody with greater knowledge on this can kindly shed some lights. Thanks


51 posts

Posted by iska > 2013-04-08 13:15 | Report Abuse

Hi reyes, yes I like Sunway. I drive in to Iskandar from Singapore regularly to get a feel of the place and update myself. E&O's and Temasek's Avira wellness village project is due for launch soon; one see a huge banner promoting the project along the highway from 2nd link to Nusajaya. If this project achieves good sales, then Sunway will get a boost bcos its land is just next to it.

Here are a list of catalysts that explain why I decided to focus on the Iskandar theme:

1. Launches by Singapore companies (starting this year) will give visibility to Iskandar. Singapore buyers (both Singaporeans and PRs) who are still unsure abt M'sian developers will start to put one foot in, hand held by Temasek and CapLand, and Sg property agents who have only just started to market Iskandar projects. Singapore's Ascendas is also slated to sell factories at the UEM-Ascendas industrial park this year. I can see Sg manufacturers buying factories here, feeling more secure buying a Sg govt-linked developer's project.

2. Listing IWH will lead to more interest in Iskandar-exposed counters. High values given to IWH's land will lead to analyst re-working the maths at land owners.

3. Launch of Country Garden's Danga Bay project in China, may lead to another new group of foreign buyers who are still relatively unfamiliar with Johor.

4. Confirmation later this year of the MRT link between Woodlands in Sg and JB City will create further buzz, as transportation convenience is key to more people taking up residence in Johor.

5. The announcement of more Sg or other foreign participation in Iskandar developments throughout the rest of this year will add more buzz. I understand another big Sg govt-linked co, Mapletree, is exploring sites at Gerbang Nusajaya. If they do pick a site there, it may make Gerbang Nusajaya a good base for Singapore companies to centre around - Peter Lim's Motorsports City and the UEM-Ascendas site being the other 2.

6. Should UEM or other land owners at Iskandar decide that they have sold enough land, they may change land sales to bidding system. Already, there is some mention of it in the news. This will push up the price of land, which is good for companies which have already land banked well, like Sunway.

7. The opening of Pinewoods Studios later this year will add more visibility, and perhaps really start to create jobs around Nusajaya. WCT Land's shopping centre next to 1Medini is now built up to 3rd floor, and when completed, will be the first bigger size shopping centre. These projects' completions will add more live to an otherwise relatively dead area.

There is no harm in looking at KL or Penang property themes, but my view is that because Iskandar is geographically near to Singapore, it is the most visible to stock n property investors on the island. Hence, it's a matter of choice and conviction that I pick this theme (explained partially by the catalysts mentioned above), having done much legwork driving into Iskandar about 15 times over the past 3-4 months. It is what I am now familiar with, so I am sharing with other forumers here.


204 posts

Posted by reyes430 > 2013-04-08 18:16 | Report Abuse

Hi Iska, thanks so much for your information, there are so many things that i don't know and need to further find out, good sharing from you. Others than Sunway, what is your take in this iskandar theme and why?


51 posts

Posted by iska > 2013-04-09 16:13 | Report Abuse

Hi reyes, I think one of the ways to play the mkt is to look for theme play. Players and analysts like this because then there are so many things to talk/write about, and for players big and small, a whole basket of stocks to rotate around.

The Iskandar theme is good because there is going to be many developments and news on this front, each one giving a new reason to look at the basket of stocks. When one invests in a counter, one would love to see positive news related to it regularly. Likewise, when positive news in relation to Iskandar keeps surfacing, one would want to own stocks that are related to that stream of news. Hence, my first and foremost reason for banking my money on the Iskandar theme: the constant flow of positive news going forward.

Apart from the list of catalysts I mentioned above, there are 2 main reasons why I am keen on the Iskandar play:

1. If there is money coming into Bursa from Singapore, where is it going into? Familiarity, closeness to where one is stationed, ability for one to see it personally, etc are important in attracting investment money. In recent months, news about Iskandar and property launches in Iskandar are starting to be more visible in Singapore. This has led to more investigative works, visits to Johor, visit to Iskandar property launches and showflats, etc. Having seen with their own eyes what Nusajaya is like, having read that their govt is putting money in Iskandar, knowing that CapLand will soon be launching Danga Bay condos in Singapore, the first logical thing for stock players in Singapore to do is to start buying Iskandar stocks - and they only have 1 major play on SGX - Rowsley.

For those more hardworking, they will start to look into Bursa stocks, and they will park their money in the land owners or developers with land in Johor. And because of the sheer size of funds from Singapore, I can imagine the kind of impact it will have on the stocks that are chosen. I think that is what happened to some Iskandar stocks recently - while there may be some M'sian players trying to dump say 100,000 shares of company A, the retail funds from Singapore were willing to purchase 500,000 shares, and hence many stocks were heading north despite the GE. It's a simple case of the might of money.

2. Regardless of the fact that one can't compare oranges with apples, the fact is that land prices in Johor is a tiny fraction of the that in Singapore; and the 2 places are just kilometres apart.

As a comparison, raw land in Johor is still being transacted at say M$20-30 psf. Even if other costs are added in to ready the land for construction, it probably adds up to M$40 psf. A similar piece of land in Singapore would cost at least M$1,500 psf ppr - 37 times higher! In fact, in prime locations in Singapore, land prices can go as high as M$5,500 psf ppr. This disparity cannot go unnoticed, and once it is recognized, some investors are going to load up on Bursa companies with large land parcels in Johor. All they are betting on is probably a doubling of the land price to M$80 psf - which is still a long distance from M$1,500 psf in Singapore.

Of course, it helps that many M'sian developers with exposure to Johor land have low PEs and high NAVs to back up. So, it's not a case of merely liking a theme and ignoring basic fundamentals.

My stock picks are therefore the Bursa stocks with a lot of land in Johor, especially in comparison with the market capital. Hence, the usual suspects are Sunway, IJM Land, Tebrau, Crescendo, Dijaya, etc.

Post a Comment
Market Buzz