GDV is RM 850mn for next two years. industrial properties are high
growth segment!
This stock has target price of RM7 Vs current
price RM2.50! buy before too late.
On Oct 13, I bought
6,000 shares of Crescendo Corporation Bhd at RM2.84 per share, following
this stock being picked by Insider Asia in www.theedgemarkets.com and
The Edge Financial Daily (FD) in the morning.
Crescendo is a Johor developer with a landbank of 2,921 acres, of
which 54.8% is within the Iskandar Malaysia (IM) region. More
critically, 65.7% of its gross development value is industrial
properties. This remains a high growth area into the future, catering to
both the needs of Singapore SMEs and the growing economic activities of
IM itself. Singaporeans bought 56% of the Nusa Cemerlang Industrial
Park development by Crescendo.
Its other developments are mostly the bread and butter type of mixed
landed residential and commercial. Unbilled sales stand at RM128 million
with RM800 million worth of launches for the next two years, for a
company with a market capitalisation of RM637 million.
The stock is trading at a trailing 12-month P/E ratio of only 4.3 times and a yield of 5.8%. Net gearing is 9.2%.
Price to book is 0.8 times. Based on Edge Research revaluation, it is
trading at about 60% discount to asset value, as most of its landbank
was acquired between 1996 and 2006. Two of its largest tracts of land
are in Bandar Cemerlang (1,390 acres) and Kota Tinggi (794.4 acres),
carried at RM3.08 psf and RM1.12 psf respectively.
Given its low P/E valuations, low gearing, high dividend yield, large
discounts to asset value and good growth prospects while operating in a
sector of minimum risks, Edge Research (see www.theedgemarkets.com)
assigns Crescendo a fundamental score of 2.3 out of 3.0 and a valuation
score of 3.0 out of 3.0. It has a rising ROE of above 20% for a company
with very small net debt. Beat that. - tong's value portfolio.
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