Sunday, February 5, 2012

Tebrau

The stock jumped more than the takeover price of rm0.76 sen. Speculating ahead that the takeover price of 76 sen is unlikely to spark a high take up rate. Tebrau’s book value stood at 75 sen as at Sept 30, 2011 which many say is undervalued, given its large land bank in Iskandar Malaysia and the possibility of further corporate developments with the entry of Datuk Lim Kang Hoo and Ekovest Bhd. With the takeover by KPRI, the Johor state investment arm, will remain a major shareholder of Tebrau, Tebrau could potentially be a stock to watch for exposure to Johor.

The jewel in the company is its large land bank in Iskandar Malaysia measuring about 1022 acres and has a book value of rm592 million based on 2003 prices (rm13.30 psf) which is on the low side given the land values there have appreciated substantially over the past nine years. Assuming the price has been risen 50% to rm20 psf), Tebrau could be sitting on potential revaluation gains of rm296 million. Based on 669.73 million shares, those potential revaluation gains could be worth 44 sen on top of the company’s current book value of rm75 sen per share.

Lim’s entry into Tebrau also raises speculation that some of his privately owned assets such as Danga Bay Sdn Bhd may be injected into the company later. DBSB owns Danga Bay and is one of the largest owners and developers of sea fronting projects in Johor.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.