not vested
Public Invest Research sees SHL Consolidated worth RM1b
KUALA LUMPUR: Public Investment Research sees SHL Consolidated (SHL), the master developer of Bandar Sungai Long, could be worth at least RM1.0bil or RM4.26 per share.
It said on Tuesday SHL has been sitting on low cost landbank in suburban areas with good accessibility and huge potential development value.
"Underpinned by the limited and expensive developments in and around the Klang Valley, we see stronger demand shifting towards suburbs, which bodes well for the company," it said.
To recap, SHL has more than 40 years of experience in broad-based residential, commercial, civil and infrastructure development and construction activities. It has completed more than 60,000 units of properties.
Listed in 1995, the company remains relatively low profile but has been a household name amongst the industry players and homebuyers.
The research house said SHL's hands-on and experienced management team coupled with established relationship with leading engineering consulting and architecture firms has positioned itself well within the pinnacle amongst industry players.
Public Investment Research pointed out SHL is well known for its redbrick housing design and also pioneering the concept of resort living. It cited its flagship project, Bandar Sungai Long with golf and country club facilities in the heart of development. Apart from Bandar Sungai Long, it has also expanded its property projects to Semenyih, Rawang and Shah Alam.
"SHL owns about 433 acres landbank (for property development purpose) in Selangor, Negeri Sembilan spanning across Bandar Sungai Long (48 acres), Semenyih (118 acres), Alam Budiman, (20 acres), Rawang, (10 acres), Batang Kali (88 acres), Serendah (48 acres) and Parit Tinggi (101 acres).
"However, the most interesting part is its 160-acre golf course land in Bandar Sungai Long, sitting on a book value of RM18 psf. Management has earlier hinted its interest of redeveloping and monetising the golf course one day.
"Based on the market value of RM130 psf, we believe this piece of land could be worth at least RM900m given the matured township status in Bandar Sungai Long. We also understand that its limited memberships would make it easier for the company to redevelop the golf course land anytime in the future.
Public Investment Research said SHL's land bank and properties have a market value of not less than RM1bil and could potentially double to RM2bn (if the redevelopment plan starts to kick in), which is a far cry as compared to its current market capitalisation of RM561mil.
It also said SHL's balance sheet and operating cash flow are solid. As at FY14, it has a net cash & short term liquid investments of RM306mil or RM1.27 a share.
SHL has been paying out generous dividend with a minimum of 8.0 sen per annum (60% payout) in the last five years, which translate into 3.5% dividend yield. It had recently announced a final dividend of 5 sen for FY14, making up 19 sen for the full year, which equals to 83% payout of total earnings.
Source: The Star