Monday, July 28, 2014

SHL (Net Cash & Investments Worth rm1.27 per share)

The well known master developer of Bandar Sungai Long in Selangor has been sitting on low cost land bank with good accessibility and huge potential development value.

Underpinned by limited and expensive developments in and around the Klang Valley, stronger demand is shifting towards the suburbs, which bodes well for the company.

The company could be worth rm4.26 per share.

The group owns about 433 acres of land bank in Selangor and NS. Besides Bandar Sungai Long (48 acres), it also owns land in Semenyih (118 acres), Alam Budiman (20 acres), Rawang (10 aces) Batang Kali (88 acres), Serendah (48 acres) and Parit Tinggi (101 acres).

However most part is its 160 acre golf course land in Sungai Long, sitting on a book value of rm18 psf. Management had earlier hinted its interest in redeveloping and monetizing the golf course. Based on the market value of rm130 psf, this piece of land could be worth at least rm900 million given the matured township status in Bandar Sungai Long.

Currently (July 2014) its land bank and properties stand at a market value of not less than rm1 billion and could double to rm2 billion (if redevelopment plan kicks in) which is a far cry from its current market cap of rm580 million.

SHL’s balance sheet and operating cash flow are sold. As at financial year 2014 ended March 31 2014 it had net cash and short term liquid investments of rm306 million or rm1.27 per share.

The group has been paying out generous dividend with a minimum of 8% per annum in the last eight years prior to 2014.

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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.