Ho Hup ... Contributions From JV With Malton Started Flowing In ...

It could be in for a bumper profit for the second quarter ended June 2014. The maiden contribution from the JV with Malton has started flowing into its property development division.

Part of phase 1 of the JV project between Malton and Ho Hup over 50 acres of land near the Bukit Jalil have been fully sold out.

Under the joint development agreement, Ho Hup enjoys 18% share in GDV of the project. Based on the sale proceeds of rm403 million, Ho Hup is expected to recognize rm72.6 million in revenue in 2Q.

This share of revenue is almost as good as profit because the land owner Ho Hup does not bear any development costs. Malton is bearing the entire development cost while Ho Hup is providing the land.

The stock had been uplifted from its PN17 status in May 2014.

The market is now (Aug 2014) awaiting to see how well Ho Hup generate earnings from the joint development with Malton.

The JV with Malton is set to be Ho Hup’s growth driver. The company’s property development segment is expected to contribute close to half of its revenue in 2014.

Malton has yet to officially launch Pavilion 2 and its has been reported that details will be out by 3QFY2014. First phase of the development has received a good response.

There are four faces in the freehold integrated development with a total GDV which has been revised to an estimated rm4.2 billion from rm2.1 billion previously. Of this, Phase 1 is estimated to account for 20% with a GDV of about rm800 million.

Industry observers are positive on the location of Pavilion 2 in Bukit Jalil nothing the shopping mall would anchor the area as the first real commercial hub in Bukit Jalil.

Insas controlled by Datuk Thing has been accumulating shares in Ho Hup. Insas currently (Aug 2014) holds 8.33% stake in Ho Hup.