Sunday, January 12, 2014

A&M - sitting 775.2ha land which was purchased less than RM1 psf

It has been sitting on a 775.2ha parcek of remote Carey land in jugra, Selangor. The land was purchased in the 1990 and had been left idle with no development.

With the completion of the Carey Iskand access Interchange of the South Klang Valley Expressway in 2015, A&M stands to benefit.

Plans are afoot to undertake a rm10 billion GDV integrated property development.

It has been reported that the Carey Island land was purchased more than 30 years ago for less than rm1 psf. As at Sept 30 2013, its net asset value was rm1.47 per share. The land was valued at more than rm50 psf or rm4.2 billion, valuing A&M at about rm11.50 a share.

But the valuation may be on the high side as the land is classified as agricultural and will need to undergo lengthy approval processes for status conversion. Its lease expires in 2105.

The agricultural land can be revalued as long as it is not classified in the books as being held for future conversion and development.

A&M’s Carey Island land has a net book value of rm12.3 million which is below the current (Jan 2014) book value.

PNBS has a 5.8% stake in A&M in 2009 but cease to be a substantial shareholder at end 2011.

Things may be changing as A&M shareholders may be in for an unexpected boost once the Carey Island access interchange is ready in 2015.

Its low entry cost of less than rm1 psf will enable it to earn superior margins.

Ng together with his family controls 71.56% stake in the company.

A&M also has an 8ha plot in Bukit Kemuning, Shah Alam, 72ha in Morib and 1.2ha in Mont Kiara.

It is expected to see a significant growth in earnings on the back of planned launches.

Its current (Jan 2014) unbilled sales stood at rm45 million.

With cash and cash equivalents of rm85 million as at Sept 30 2013, it is in prime location to acquire more land.

Based on its net gearing of 0.5 times, it would be able to raise some rm340 million via borrowings.

It has a negligible debt of rm66000 in total borrowings as at Sept 30 2013.

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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.