IPMUDA - The Royal Flush

The US market continue to challenge higher alongside with the European market as economy data continue to exceed expectation. Despite the rumored World Cup downtrend, the equities market had seen with more participation lately. The current run up would suggest a possible revisit on the property counters that had been in played 2 to 3 months back.

While a lot of investor and trader might see Malaysian stock as being too expensive after hitting a high after another high, quite a number of investor are actually still poaching for potential big hits that had a bigger room for appreciation. With this in line, it had came to my attention on a potential "LIMIT UP" candidate - IPMUDA BHD (Ipmuda - 5673)

Let's have a quick look at IPMUDA chart.

IPMUDA had not seen any active trading for the past 2 years. The daily transacted volume for IPMUDA had not breach 300,000 in a single day, however, not until the recent movement that had saw IPMUDA seeing more volume participating. IPMUDA had previously challenge RM 1.20, and the coming day will be seeing RM 1.20 being taken down with a huge volume.


IPMUDA - When Sky Is The Limit
IPMUDA primary business activities is engaged in trading and distribution of building materials. It is involved as distributor and supplier of construction and finishing building materials, heavy steel products, architectural hardware, home improvement materials and other construction related products. In addition, the Company also engaged in leasing of properties, development of residential and commercial properties, providing fluid engineering systems and maintenance works, manufacturing and supplying of kitchen cabinet and wardrobe systems.

The supplying of building material and construction will continue to remain bullish throughout the year of 2014 and 2015. With more big government infrastructure project that is slated to be announced in the 2H of 2014, and a row of sky scrapper and condominiums to be delivered, the demand for the building material had been in a rising trend, resulting in building material getting more expensive. Company that is involved in supplying of building material, cement, tiling, iron cast bars will continue to see a better performance in their upcoming quarterly result.

IPMUDA 1Q FYE 2014 had saw a drastic increase in the revenue as earning per share leap jump into 3.17 cents per quarter at the back of a huge NTA of RM 2.13. IPMUDA will be slated to see a huge jump in the revenue for the coming quarters as the later had secured a larger construction supplying contract that might be seeing revenue hitting as high as RM180m for 2Q 2014, estimating a possible 4 to 5 cents EPS for 2Q 2014. Internal sources are estimating that IPMUDA will be delivering an astounding FYE 2014 which might be looking to see a leap from jump in the revenue. Based on sources, IPMUDA might be slated to see a more than 25 cents EPS that will be coming stronger order and asset disposal. At the current price of RM 1.10, IPMUDA is trading at a discount of 48% on it's NTA of RM 2.13, a hugely undervalued and discounted market price.



IPMUDA Prime Catalyst
IPMUDA prime catalyst will not come short of it's current 2 heaviest prized asset.

The Jalan Mayang freehold land which is approximately 15,000 square feet is worth around RM 2,500 to RM 2,700 per square feet. Put an average of RM 2,600 psf for a 15,000 sq feet land will be amounting to RM 39 million for this piece of land, which is a RM 19million increase or RM 0.262 profit per share (based on 72,469,500 shares)

As hot as the land in Jalan Mayang, the 132,306 sq feet land at Jalan Bagan Dalam is at close proximity to the Penang Sentral Integrated Transport Hub multi billion project that is endorsed by Chief Minister Lim Guan Eng. Penang Sentral Integrated Transport Hub will be looking at a GDV of RM 2 billion, which is a big catalyst for the area around it.

The recent back to back open market purchase of shares by Wong KiChin and Tan Sri Abu Sahid bin Mohammed in a huge manner had also sparked major attention on the company's upcoming development. IPMUDA had been rumored that the Jalan Mayang land had been disposed to unlock the shareholder value in the company.

IPMUDA shares will easily be carrying a true NTA of above RM 3.00 after reevaluation of it's major assets, further suggesting that the current price is overly cheap. Should we peg IPMUDA current price of RM 1.10 against NTA of RM3.00, IPMUDA is trading at a slash discount of 63%.


I believe IPMUDA will be a very interesting company to be looked at, given it's solid fundamental of the company, and the strong asset position that the company is holding to. IPMUDA will be a fine investment and trading target based on
- Huge growing demand in the construction supplying sector.
- Strong growing revenue
- Possible of unlocking part of shareholder value through disposal of Jalan Mayang Freehold Land
- Trading at 48% discount at the NTA of RM 2.13
- Strong recent buy back from directors
- Solid management team and investment decision team.
- Jalan Bagan Dalam freehold land which is in close proximity with the more than RM2 billion Penang Sentral Integrated Transportation Hub development that will proper the land price around the area further.

IPMUDA will be looking to challenge above RM 1.30 in the short term. A longer term outlook will place IPMUDA at RM 1.80, given it's strong fundamental and it's strong in demand prized asset. A potential limit up target.

Are you game in or out? Make your decision before the limit hits.

Bone's short term target: RM 1.40

Cheers and happy trading.