Gallant Venture

Gallant Venture

Postby winston » Mon May 12, 2008 1:42 pm

Casino in Bintan ?

Story: We attended a ground breaking ceremony for Gallant Venture (GALV) Lagoi Bay project held in Bintan on the 9th May 2008 and came away with positive feedback regarding future land sales prospects and investor interest for the development.

Point: We acknowledge that GALV will take time to sell its massive landbank of c.18,200 hec which represents great execution risk for the company. Over the past half year, the company has reported only S$19m worth of land parcel sales.

During the fieldtrip, GALV announced that it has secured an additional S$26m in land parcel sales with a further S$400m under negotiation. In addition, the proposed Casino project by Landmarks, if approved, will boost the demand and selling prices of GALV's surrounding landbank. We have assumed sales of land parcels of 5%-8% of its landbank in FY08- 09 resulting in sales of c. S$132m and S$221m based on an at average selling price of S$175 psm. This will lead to a EPS growth of >100% in FY08 and 68% in FY09 respectively.

Relevance: While the lack of newsflow regarding substantial land sales in its Lagoi By project has led to a drag in share price since the start of the year, we remain positive on the long-term prospects for GALV based on recent continued land parcel sales signaling investors interest in Bintan, and the proposed development of Treasure Bay resort by Landmarks. Therefore, we maintain our BUY on GALV with a revised TP of S$0.92 (Previously S$1.22) based on a 30% discount to its RNAV of
S$1.31.

Key catalysts for the stock will be:-
i) securing the large resort contract in Bintan worth about S$180m,
ii) Casino licence approval from Jakarta for Landmark's project.

Source: DBS
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Re: Gallant Venture

Postby winston » Wed May 21, 2008 2:02 pm

Not vested. Still watching ..


From Kim Eng:-

Gallant Venture (Rohan Suppiah, DID: 64321455)
Previous Day Closing price: S$0.685
Recommendation: Buy (maintained)
Target price: S$1.50 (maintained)

The Chinese connection

Gallant Venture has undergone some re-organisation of its shareholding structure, which sees a 26% shareholding in Gallant being held by a Chinese subsidiary Salim Wanye.

Salim Wanye holds a majority stake in a Shanghai-listed property developer, Shanghai Wanye Enterprises.

Shanghai Wanye may be used to promote Bintan Resorts as a travel destination to the China market and to invest directly into Gallant Ventures various property projects in Bintan Resorts.

Shanghai Wanye certainly has the balance sheet for this, and may be significant in order to establish the critical mass of investment that Bintan Resorts requires.

Lagoi Bay kicks off

Gallant also recently conducted the ground breaking for the construction of its landmark Lagoi Bay township development.

Lagoi Bay is a mixed development project that will be key in kick-starting the overall development of the Bintan Resorts project.

It includes high to mid-end hotels, a central shopping area, private residential developments, and a marina and a central waterway, along a 2-kilometore stretch of beach.

More land sold

Several land sales agreements were signed, bringing a total of some 30 hectares sold for more than S$45m. Prices of these land sales have been within our expectations.

Gallant is currently negotiating on an additional 300 hectares for a combined value of some S$400m.

Gallant's new fast ferries are expected to be operational in March 2009, and the airport development is in progress

Gallant is also investing a further S$150m in its power generation facilities to keep up with expected demand.

Reiterate our Buy recommendation

We remain confident of the long term growth potential of Gallant not just on land sales but also cashflows from industrial parks, resort operations and utilities.

Our medium term DCF-based target price for Gallant remains at S$1.50, with fair value having the potential to be rated upwards exponentially.

However, we caution that tangible development of the project will take at least two years.

Investors should look out for further tangible news flows indicating development progress. We maintain our BUY recommendation.
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Re: Gallant Venture

Postby Apong » Wed May 21, 2008 3:48 pm

Qiao Feng of CNA is a die hard supporter of this.

The Edge said that even though Bintan land is dirt cheap compared to Sentosa, building a house on Bintan Island can set you back by $1 million.

So, this one is really a "patience test".

Genting (Malaysia) controls Landmark, a company with a plan to build a casino in Bintan, and gambling is illegal in Indonesia. But I do believe Indonesia will see the benefits of a casino once Singapore IR's starting raking in big $.

Anyone vested in this must be willing to wait many years to see the labour bear fruits... or the trees wither...
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Re: Gallant Venture

Postby helios » Wed May 21, 2008 10:47 pm

yo guys,

pls re-read TheEdge magz on this announcement.

other than e casino,

Point 1: it also states: gallant venture also have a utilities arm which provides potable water, electricity and telecommunications to its resorts and industrial parks across bintan and batam.

Point 2: airport development by 2010 for private jets (we know, our seletar airport jtc development in 2010 will be catered to this class of uber-rich people too).

any FA forumers able to give us a pie breakdown of e Co. financials?

e lagoi Beach @ http://www.gallantventure.com/Lagoi%20B ... 2030pp.pdf
(i've sent them my media enquiries liao ... )
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Re: Gallant Venture

Postby helios » Thu May 22, 2008 10:44 am

Bintan Resorts Attracts S$45 million in New Investments for Lagoi Bay Development
9 May 2008

PT Bintan Resorts Cakrawala and PT Buana Megawisatama, subsidiaries of Gallant Venture Limited, a company listed on the Singapore Stock Exchange today announced that it has sold close to 300,000 square metres of land in its Lagoi Bay development for approximately S$45 million for a variety of resort, hotel, private residential and retail projects in Bintan Resorts to date.

These investments from different groups of investors which range from property developers in the region to private individuals seeking to build their dream villas, are expected to add further buzz to the Bintan Resorts destination when completed and span across the three key components of the Lagoi Bay masterplan which comprise land for resort and hotel development; private residences; and a beach village featuring intimate boutique hotels, al fresco cafes, spas, beach bars, retail and recreational outlets.

Less than an hour from Singapore, Bintan's close proximity to Singapore puts it in a good position to tap into the 9 million leisure and business travellers visiting Singapore annually, which is expected to reach 17 million by 2015. The Lagoi Bay development was launched to cater to this growing market.

Among one of the new names to be featured in Bintan Resorts is Alila Hotels and Resorts, a leading niche player in high-end boutique hotels and resorts. With its collection of exclusive resorts in the Maldives, Bali, Thailand, Laos and Oman, Alila is set to occupy one of the prime resort sites in Lagoi Bay. The Group is expected to mark its foray into Bintan with the opening of a luxury boutique hotel in Lagoi Bay.

"Lagoi Bay's spectacular shoreline coupled with its growth potential arising from its strategic location from Singapore, makes it a natural choice for us when identifying the location for our next resort. With its well-maintained and comprehensive infrastructure and secure environment, we are confident that our project in Bintan will be well-received by our guests, said Mr Mark Edleson, President and CEO, Alila Hotels & Resorts.

BG Chin Chow Yoon, Vice-President Director, PT BRC commented, "We are certainly pleased to see many investors sharing and believing in our vision of developing a world-class resort destination. These new investments are a testimony to the potential of Bintan Resorts."

We will continue to make significant investments in infrastructure to complement our increasing developments in Bintan. Already in the pipeline are two new ferries due to be delivered in the first half of 2009, to further enhance the travelling experience for our visitors by reducing travel time and improving comfort levels.

Next is a planned tourist airport which is expected to approved by the authorities some time this year, to complement the long-haul capabilities of Singapore's Changi airport, allowing domestic and some regional tourists to fly directly into Bintan, added BG Chin.

To date, more than 10km of new construction and access roads through the Lagoi Bay development has been laid, and the first stage of infrastructure works for the first large-scale residential project has been substantially completed while new water, power, telecommunications and sewage lines will be progressively brought into the site.

Already home to brand name products and amenities such as Banyan Tree, Club Med and the award-winning Ria Bintan Gary Player golf course, Bintan Resorts has long been a popular destination with Singaporean and international visitors alike, with an average annual visitorship of about 330,000.

A new addition to these existing brands will be the Ritz Carlton Bintan which is slated to begin its operations in 2010.

The Lagoi Bay development is approximately 1,300 hectares in size and a 15-minute drive from the international ferry terminal. With land parcels ranging from 2,000 square metres to 30 hectares, there are investment opportunities for a variety of commercial and residential use.

All sites have close proximity to the beach and will have road access. The sites will also be fully served by power, potable water, telecommunications, sewer lines and solid waste collection.

>>> hence, we know why SembCorp has a 23.9% stake in this.
[Finance disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought regarding investing of any stocks/ funds and/or whatsoever. The author has no vested interest in the mentioned stock at the time of writing.
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Re: Gallant Venture

Postby Apong » Thu May 22, 2008 1:10 pm

Dear San,

From what I know, the co. has been dumping its share of GV... That's why the price keeps falling..
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Re: Gallant Venture

Postby helios » Mon May 26, 2008 4:36 pm

dear apong,

any thoughts on why e dumping @ this stage?
[Finance disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought regarding investing of any stocks/ funds and/or whatsoever. The author has no vested interest in the mentioned stock at the time of writing.
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Re: Gallant Venture

Postby Apong » Mon May 26, 2008 5:36 pm

Sorry, puzzle me also -- if there is so much potential, I don't think anyone (with the info) will dump, unless the company needs money elsewhere...

This counter was a "concept play" -- but with Genting support, there is hope. Even if a casino cannot be built, at least some form of resort / high end hotel chain.
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Re: Gallant Venture

Postby winston » Thu May 29, 2008 4:10 pm

Not vested. From OCBC:-

Huge upside to unlock from landbank.

Gallant Venture Ltd (Gallant) owns and operates industrial parks in Indonesia's Batam and Bintan Islands. It also owns 18,201 ha of landbank on Bintan Island, whose value will be unleashed upon being sold to hotel developers and individuals. Gallant's key investment merit lies in the unrealised profits from sales of its landbank.

At an average cost of just S$4/sqm, Gallant sells the land for S$20 to S$280/sqm, implying a lucrative fivefold to 70-fold profit margin.

3 cash cows as pillars of support. Land sales tend to be unpredictable and typically result in lumpy revenues. To stabilise its revenue stream, Gallant has three other business segments that provide recurring income.

These are its
(i) industrial parks, which are leased to Multi-National Corporations (MNCs),
(ii) utilities, including the provision of power, treated water and telephone lines, and
(iii) resort operations, which include the provision of ferry services, medical facilities and recreational activities.

A winning formula. The value to be reaped out of Gallant's landbank does not end at land sales. After recognising revenue from land sales, Gallant earns recurring income from the new owners of the land by providing them with utilities such as water and electricity. With its exclusive right to provide utilities at Bintan Resorts, which encompasses the 21,000ha land along Bintan Island's northern coast, Gallant is in a monopolistic position to enjoy full pricing power for its services.

Exploit the valuation gap. Gallant is trading at a 24% discount to the value of its landbank and a 23% discount to our fair value estimate. With catalysts such as infrastructural enhancements, Sentosa's integrated resorts, and a possible casino in Bintan itself, we may see an appreciation in Bintan's land prices, and in turn, the value of Gallant's landbank.

Investment risks. Key risks pertaining to Gallant include a slowdown in land sales arising from the global credit crunch and sub-prime crisis, regulatory and sovereign risk that may affect land ownership and investment policies, and natural disasters such as tsunamis. Nevertheless, Gallant offers huge potential upside if investors take a long-term view of Bintan's potential.

We initiate coverage on Gallant with a BUY rating and RNAVbased fair value estimate of S$0.94.
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Re: Gallant Venture

Postby winston » Mon Jun 02, 2008 3:01 pm

From DBS:-

Gallant Venture announced an updated schedule of their accumulated land sales, which totalled $63m, compared to $19m previously announced

The sales figures are slightly on the upside, given that GALV has announced only additional S$26m in land parcel sales previously. Though the land parcel sales still remain small, we are encouraged by the continued take-up rates which is a positive signal of continued investor interest in the development potential of Lagoi Bay as a future tourist attraction.

Maintain Buy with TP of S$0.92.
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