vested
Key Takeaways From Management MeetingVALUATIONGallant Venture (GV) is trading at
0.6x 2014 P/B and 150.6x 2014 PE.INVESTMENT HIGHLIGHTSGallant Venture (GV) has five key business segments:
a) Automotive. Through a 71.5% stake in Indonesia-listed PT Indomobile Sukses Internasional Tbk, (IMAS), the company distributes car brands such as
Nissan,
Volkswagen, Audi, Renault, Suzuki and Datsun. In additional, IMAS also provides
financing and automotive spare part sales to vehicle owners.
b) Utilities. GV supplies power, water, telecommunications and waste management services to Industrial parks in Batam and Bintan, and to Bintan Resorts.
c) Industrial parks. Owns two industrial parks (Batamindo Industrial Park, Bintan Industrial Estate) and provides rental and logistics services to tenants in their
industrial parks.
d) Resort operations. This includes ferry services and terminal operations, travel agency and conservancy services.
e) Property development in Bintan and Shanghai. GV owns
14,000ha of landbank north of Bintan, which the company is slowly selling to various developers. The company has also signed a MOU with PT Garuda Indonesia to develop a regional airport in Bintan, adjacent to its proposed Maintenance, Repairs and Overhauls
(MRO) facilities.
1Q15 net loss widened to S$10.4m from S$5.1m despite stronger revenue and gross profit as GV was impacted by forex losses of S$2.8m due to
depreciating rupiah and higher financing costs of S$31.3m from S$26.1m.
Change in revenue mix to boost IMAS profitability GV will slowly shift the revenue mix in IMAS from 60/40 distribution to financing and automotive parts sales breakdown to 40/60 given the latter’s higher gross profit margin.
In Lagoi Bay, Bintan, GV is developing a 1,300 ha of prime land by selling various plots to hoteliers and developers. GV is also building a Lagoi Beach village mall featuring 14,000 sqm of retail space. Currently,
three hotels are set to open in 2015 (The Sanchaya, Swiss-Belohotel Grand Lagoi and Treasure Bay Bintan) with another
3-6 more in 2016-17. ASP of the land ranges from S$110-175psm, vs cost of S$30psm.
Synergistic to its current utilities business. Increased tourism in Bintan will drive up demand for its utilities segment, which supplies water, telecommunications and
power to these resorts as well as property developments to house the employees of these establishments.
Source: UOBKH
http://research.uobkayhian.com/content_ ... 6b439045e3
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