Monday, May 12, 2014

SBC Corp

Its flagship development is the 16.83 acre Jesselton Quay in Kota Kinabalu.

The JQ project has a GDV of rm1.8 billion and is a joint venture with landowner Suria Capital Holdings Bhd. SBC has exclusive rights to develop the project and will be required to make staggered payments to Suria Capital for land use. Suria Capital is entitled to 18% of the GDV, with the balance going to SBC Corp.

The JV with the local listed port operator is expected to be a significant potential earnings driver.

The group has a healthy pipeline, rm200 million of which will be launched by end 2014.

SBC Corp has property projects in Peninsular Malaysia and Sabah, with a landbank of about 1100 acres.

The group is working on several property projects with a combined GDV of rm6.2 billion over the next 10 years from 2014.

Nevertheless, despite the large potential GDV contribution from its projects, some are of the view that SBC Corp lacks prime land to grow further and gain a stronger foothold in the property sector.

As more property developers expand their landbank, especially in prime locations, SBC has remained in its confort zone of Kota Kinabalu, the Klang Valley and Kuantan.

The group will continues to replenish its landbank in areas it is familiar with.

SBC has been focusing on the Kota Kinabalu property market for over a decade while development mid range properties in the Klang Valley.

The group will continue to see strong contributions from the Kota Kinabalu property market.

2014 is a year where it pushes towards the commencement of JQ.

SBC is involved in developing affordable, mid range properties in the Klang Valley, which enjoys strong demand. Its landbank is cheap, which means that the company will be able to sustain its high profit margin.

However the company needs to raise its profile in the Klang Valley.

SBC Corp is expected to see long term growth from its JQ development.

Earnings over the next five to eight years from 2014 will likely be underpinned by its JQ project. Its projects in Kiara East and Batang Kali should also provide the company with steady earnings growth.

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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.