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Tuesday, September 9, 2014

BIMB revises Ho Hup's TP to RM2.26 on maiden property project in Myanmar

Source: http://www.theedgemalaysia.com/business-news/306529-bimb-revises-ho-hups-tp-to-rm226-on-maiden-property-project-in-myanmar.html

KUALA LUMPUR (Sept 9): BIMB Securities has revised its target price for
Ho Hup Construction Co Bhd to RM2.26, following the construction
company’s  announcement of its maiden property project in Myanmar.

“We are positive with this move as it represents Ho Hup’s maiden project
in Myanmar. We believe this is the best opportunity to scout for other
projects in the country,” said BIMB Securities in a note today.

In a filing with Bursa Malaysia yesterday, Ho Hup announced that it
would develop a high-end residential property project with a gross
development value (GDV) of US$200 million (RM636 million) in central
Yangon, Myanmar.

Ho Hup (Myanmar) E&C Co. Ltd (Ho Hup Myanmar), a 70%-owned subsidiary of
Ho Hup has entered into a Joint Venture Agreement (JVA) with Zaykabar
Company Limited (Zaykabar) to develop the “Z Villas 191 Units Land”
located in Mingalardon Garden City.

Ho Hup Myanmar will have sole and exclusive right to develop the land
and in return to Zaykabar as the land owner, the former will have to pay
the land cost and share 60% of net profit to Zaykabar.

From the JVA, Zaykabar will be entitled to a sum of cash equivalent to
the aggregate of the land cost which is pegged at US$40 per square foot
(psf) and shall have 60% of the total net profit of the project.

“GDV of the project is expected to be around US$200 million and first
launch will be by mid Nov 2014.

“Therefore, we are leaving our FY14 forecast unchanged and revised our
earnings projection for FY15 higher by 11.6% to RM110.3 million from
RM98.8 million,” said BIMB.

As at 12.25pm, Ho Hup’s share price is unchanged at RM1.46.


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