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Monday, May 26, 2008

Selangor Dredging on expansion drive

SELANGOR Dredging Bhd (SDB), a high-end property developer, is on the lookout for opportunities to expand at home and in the region this year, its top official said.

The group last year ventured into Singapore - its first and only overseas market so far - where it expects to fetch RM400 million in sales from the launch of two developments later in the year, managing director Teh Lip Kim said.

"With regard to regional business activities, we will concentrate on this at the moment. However, we are open to venturing into other countries within the region, should the opportunity arise," she told Business Times in a recent interview.

The group is not engaged in any discussions to buy land at the moment, she added.

Besides property development, the main board-listed company is also involved in property management and leasing.

It operates the Hotel Maya, a boutique hotel in the heart of Kuala Lumpur.

"We hope to launch three developments this year - two in Singapore and one in Kuala Lumpur - with a total gross sales value of about RM550 million. This is an increase from last year, where we launched two developments, Ameera Residences in SS2 Petaling Jaya and 20Trees in Melawati," she said.

These new projects are expected to contribute to the group's current fiscal year ending March 31 2009.

In Singapore, the two projects it will launch are seven-storey condominium in Wilkey Road, just off the popular Orchard Road and 38-storey apartment near Newton Circus, just off Scotts Road.

In Kuala Lumpur, it is launching a 10-storey apartment in Jalan Ampang.

Last year, the group registered a fourfold increase in net profit to RM97.1 million. Teh is "cautiously optimistic" that it will continue to do well this year despite an increase in the cost of materials and the bearish global economic sentiment.

Recently, the group spent RM24.6 million to buy three parcels of beach-front land in Batu Feringgi, Penang - located between the Lone Pine and Casuarina hotels - where it plans to develop a "good, villa-type resort development" sometime in late 2009 or 2010, Teh said.

SDB is also the developer of the controversial "Damansara 21" project in Damansara Heights, where it plans to build 21 luxury bungalows on a hillslope, which has drawn a lot of flak from nearby residents.

Its other projects include Aman Sari in Puchong and Park Seven at Kuala Lumpur City Centre.

Yeonzon Yeow, head of research at Kenanga Investment Bank, has a "buy" call on SDB's stock, saying the group's strength lies in its cutting-edge products and its good property management.

While some view SDB as a small cap stock that doesn't perform as well as other property stocks, he said the developer was able to achieve strong sales with high benchmark prices.

"Take the Ameera condominium, it is the most expensive condominium in SS2 and there was strong take-up," he remarked.

He has a target price of RM1.84 on the stock, which suggests a 161 per cent upside from its last Friday's closing of 70.5 sen.

By New Straits Times

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