SHL Consolidated (SHL), a well-known master developer of Bdr. Sg. Long,
has been sitting on low cost landbank in suburb areas with good
accessibility and huge potential development value. Underpinned by the
limited and expensive developments in and around the Klang Valley, we
see stronger demand shifting towards suburbs, which bodes well for the
company. Based on our valuation, we opine the company could be worth at
least RM1.0bn or RM4.26 per share.
Background. SHL has more than 40 years of experience in broad-based residential, commercial, civil and infrastructure development and construction activities. Today, it has completed more than 60k units of properties. Listed in 1995, the company remains relatively low profile but has been a household name amongst the industry players and homebuyers. Its hands-on and experienced management team coupled with established relationship with leading engineering consulting and architecture firms has positioned itself well within the pinnacle amongst industry players. As for homebuyers, the group is well known for its redbrick housing design and also pioneering the concept of resort living. A good example is its flagship project, Bdr. Sg. Long with golf and country club facilities in the heart of development. Apart from Bdr. Sg Long, it has also expanded its property projects to Semenyih, Rawang and Shah Alam.
160-acre golf course land in Bdr. Sg. Long. The group owns about 433 acres landbank (for property development purpose) in Selangor, Negeri Sembilan spanning across Bdr. Sg Long (48 acres), Semenyih (118 acres), Alam Budiman, (20 acres), Rawang, (10 acres), Batang Kali (88 acres), Serendah (48 acres) and Parit Tinggi (101 acres). However, the most interesting part is its 160-acre golf course land in Bdr. Sg. Long, sitting on a book value of RM18 psf. Management has earlier hinted its interest of redeveloping and monetizing the golf course one day. Based on the market value of RM130 psf, we believe this piece of land could be worth at least RM900m given the matured township status in Bdr. Sg Long. We also understand that its limited memberships would make it easier for the company to redevelop the golf course land anytime in the future. Currently, we think its land bank and properties stand at a market value of not less than RM1bn and could potentially double to RM2bn (if the redevelopment plan starts to kick in), which is a far cry as compared to its current market capitalization of RM561m.
RM306m net cash with 3-8% dividend yield. SHL‟s balance sheet and operating cash flow are solid. As at FY14, it has a net cash & S-T liquid investments of RM306m or RM1.27/share. The group has been paying out generous dividend with a minimum of 8sen p.a. (60% payout) in the last 5 years, which translate into 3.5% dividend yield. It had recently announced a final dividend of 5sen for FY14, making up 19sen for the fullyear, which equals to 83% payout of total earnings.
Source: PublicInvest Research - 22 Jul 2014
Background. SHL has more than 40 years of experience in broad-based residential, commercial, civil and infrastructure development and construction activities. Today, it has completed more than 60k units of properties. Listed in 1995, the company remains relatively low profile but has been a household name amongst the industry players and homebuyers. Its hands-on and experienced management team coupled with established relationship with leading engineering consulting and architecture firms has positioned itself well within the pinnacle amongst industry players. As for homebuyers, the group is well known for its redbrick housing design and also pioneering the concept of resort living. A good example is its flagship project, Bdr. Sg. Long with golf and country club facilities in the heart of development. Apart from Bdr. Sg Long, it has also expanded its property projects to Semenyih, Rawang and Shah Alam.
160-acre golf course land in Bdr. Sg. Long. The group owns about 433 acres landbank (for property development purpose) in Selangor, Negeri Sembilan spanning across Bdr. Sg Long (48 acres), Semenyih (118 acres), Alam Budiman, (20 acres), Rawang, (10 acres), Batang Kali (88 acres), Serendah (48 acres) and Parit Tinggi (101 acres). However, the most interesting part is its 160-acre golf course land in Bdr. Sg. Long, sitting on a book value of RM18 psf. Management has earlier hinted its interest of redeveloping and monetizing the golf course one day. Based on the market value of RM130 psf, we believe this piece of land could be worth at least RM900m given the matured township status in Bdr. Sg Long. We also understand that its limited memberships would make it easier for the company to redevelop the golf course land anytime in the future. Currently, we think its land bank and properties stand at a market value of not less than RM1bn and could potentially double to RM2bn (if the redevelopment plan starts to kick in), which is a far cry as compared to its current market capitalization of RM561m.
RM306m net cash with 3-8% dividend yield. SHL‟s balance sheet and operating cash flow are solid. As at FY14, it has a net cash & S-T liquid investments of RM306m or RM1.27/share. The group has been paying out generous dividend with a minimum of 8sen p.a. (60% payout) in the last 5 years, which translate into 3.5% dividend yield. It had recently announced a final dividend of 5sen for FY14, making up 19sen for the fullyear, which equals to 83% payout of total earnings.
Source: PublicInvest Research - 22 Jul 2014
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