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Wednesday, August 24, 2011

IJM Land confident of good year despite global challenges

SUBANG JAYA: IJM Land Bhd, the property arm of IJM Corp Bhd, is confident of a good 2011 despite a challenging year brought about by the global economic slowdown and European debt crisis.

IJM Land chief executive officer and managing director Datuk Soam Heng Choon said despite a slowdown in some areas such as the Kuala Lumpur City Centre and Mont Kiara, the property market is still resilient in other areas like Penang and Sandakan.

"Property projects, which cost RM500,000 a unit, are still selling strong and the government's mass rapit transit project and the various economic transformation programmes will have strong spillover and multiplier effects in terms of property value and spending," Soam said after the company's annual general meeting.

Soam said the company, which is 67.07 per cent owned by IJM Corp Bhd, will launch projects with a gross development value (GDV) of RM2 billion and RM1 billion within the current financial years ending March 2012 and March 2013 respectively.

IJM Land has a landbank of 1,943.3ha nationwide with a GDV of more than RM19 billion, enough to keep it busy for the next 12 years.

Soam said the company is still open to mergers and acquisitions despite the failed tie-up with Malaysian Resources Corp Bhd.

It will not expand its overseas projects in China and Vietnam for the time being.

The company expects to register slower growth this year as the property market had stretched last year, which saw 375,000 units of various property units launched with a combined GDV of RM109 billion.

By Business Times

Sunway allocates RM400m for overseas expansion

KUALA LUMPUR: Sunway Bhd, a property and construction group, has allocated some RM400 million for overseas expansion mainly in China, Singapore and India.

Chief financial officer, Chong Chang Choong said RM300 million has been set aside for the Tianjin Eco-City project in China while the rest will be for projects in Singapore and India.

The Tianjin Eco-City project has an estimated gross development value (GDV) of RM5 billion and is due to be launched in the middle of 2012. It will also be completed between five and seven years.

Shares of the group, a merger between Sunway City Bhd and Sunway Holdings Bhd, was relisted yesterday with an opening price of RM2.60 versus its reference price of RM2.80.

It closed 11 per cent or 31 sen down to RM2.49.

Chong said the group expects its overseas business to contribute about 30 per cent of total turnover in the next five years.

"Our core strength will still be in Malaysia. Any investment overseas especially in China will be more of an opportunistic point of view," he added.

Meanwhile founder and chairman, Tan Sri Dr Jeffrey Cheah said the group hopes to win jobs under the mass rapid transit (MRT) project. Sunway recently won a contract under the light rail transit (LRT) extension project.

"Just recently, we won the bidding for the LRT extension...As for MRT, we have very good experiences, very good track record. We worked very hard for it," he said.

The group will be one of the largest property-construction players in the region, with total assets of over RM7 billion and a land bank of close to 891 ha with a potential GDV of approximately RM23 billion.

By Business Times

Sunway makes weak debut

KUALA LUMPUR: The shares of newly-merged property and construction group Sunway Bhd were not immune to the weak market sentiment, closing at RM2.49 on their Bursa Malaysia debut yesterday, down 31 sen from the reference price of RM2.80.

An analyst said investors were still reeling from the recent shocks to the global economy.

Cheah striking the gong at the listing ceremony. With him are the group’s executives and directors.

“The stock is still undervalued compared to its peers as its price to earnings ratio and price to book value are still very attractive. There is more upside when the sentiments improve,” he said.

Trading in Sunway shares kicked off at RM2.60, with 123,900 shares changing hands at the opening bell. It hit an intra-day low of RM2.40.

“We are quite happy with the price at the moment given the circumstances. Markets go up and down, but the merger will make us stronger with more synergy and branding (value),” said executive chairman Tan Sri Jeffrey Cheah at the listing ceremony.

The debut marks the completion of the merger between Sunway Holdings Bhd and Sunway City Bhd, which was initiated in November last year. “With our size, we can now bid for more projects with higher values and access more capital markets, backed by enhanced liquidity and stronger credit profile,” he said.

The group expects to derive 30% of its turnover from overseas investments over the next five years. “In line with that objective, we have allocated RM300mil to RM400mil for our overseas expansion,” said chief financial officer Chong Chang Choong.

Currently, its overseas investment contributes 10%-15% of the group's turnover.

Sunway will be looking at opportunities to expand in growth markets such as China, India and Singapore. Chong said about RM300mil would be utilised to develop the 95-acre Tianjin Eco-City in China which is worth RM5bil in gross development value.

“The Tianjin project is very capital intensive as it involves land and development cost, and that is why we need to set aside such a huge quantum of funds for the project. The balance will go into funding our other projects in Singapore and India,” he added.

The enlarged Sunway Bhd, with total assets of RM7bil and a market capitalisation of RM3.6bil, is also set to leverage on its stronger position and continue its participation in local construction projects.

“We have been pre-qualified to tender for the My Rapid Transit project, and we are confident of clinching some of the contracts based on our good track record and experience,” Cheah said.

Recently, the group was awarded the light rail transit Kelana Jaya extension job valued at RM569mil by Syarikat Prasarana Negara Bhd.

By The Star