A&M (5959) A&M Realty Bhd - Awesome and Majestic

21 March 2014

A&M (5959) A&M Realty Bhd - Awesome and Majestic

The US market had reacted in a superbly bullish manner after Yellen sticks on to the promised of reducing the quantitative easing by handling a USD 10 billion reduction in the monthly bond purchases. As of now, the DJIA is partying hard with more than +100 as the US economy recovers in a faster pace than expected. I believe this plan will further drive more fund back to the US, hence resulting in a stronger USD in the coming days. While the US market heads for recovery,how will the emerging market react?

Interestingly, I would like to bring to your interest - A&M, known as A&M Realty Bhd (Stock Code 5959). This little known company in the older days will not be staying low profile soon as the harvesting season had finally reached their door step on their prize assets, featuring Carey Island, Jugra, Selangor.

Let's have a quick glance at the technical chart of A&M Realty.

The price had recently saw some activities in January 2014 and consolidated lower for a couples of month after a series of bearish sentiment in the KLSE market. While consolidation had seen saturation at this level, I believe that A&M will be look set to penetrate into a new level to find it's base soon, hence, will be anticipating a great volume to participate in the market.

So probably you might be thinking, what could be so great about A&M prized asset - Carey Island? Carey Island is strategically located at the south of the radiantly busy Port Klang, where Hong Kong mega tycoon Li Ka Shing is part of the owner for the biggest port operator at Port Klang, dubbed Westport.

The current infrastructure development with SKVE (South Klang Valley Expressway) had connected the Kuala Lumpur to Carey Island in a straight drive. Driving westward from Puchong to Carey Island using SKVE will only takes approximately 30 minutes. While NKVE had brought up places like Setia Alam in Shah Alam, the connectivity of SKVE straight to Carey Island is liken to a golden bridge in bringing up the value of the land there.

A&M is sitting on a massive 2000 acres at Carey Island which was bought more than 30 years ago at a price of less than RM1 per square feet, and had not been revalued for years since they last bought. Analyst would suggest that each square feet to be worth around RM50, which will put up a staggering figure of RM 4.2b worth of land now. With 365m shares issued, the land itself will be knocking at RM11.50 per share. Skeptically slashing it by 50% still put the figure at RM5.75, which is a 82% discount towards it's current share price.

The group is not shy of some other assets as they are currently sitting on
- Cash and Cash Equivalents of RM93.6m (RM 0.26 per share)
- Bukit Kemuning, Shah Alam, 20 acres
- Morib, 180 acres
- Mont' Kiara, 3 acres

Driven by the Datuk Ng Thian Hock and his family, the group had a diversified business activities ranging from Oil Palm Plantation, Hotel Management and Automotive Spare Parts. The Ng family owned more than 70% of shareholding in A&M Realty, which is also the major owner in HIL  Industry Berhad, a cash rich company with quite a number of property and land.

The current financial statement in A&M will see an increase in the EPS with FYE 2013 at 8.79 cents behind a revenue of RM141.8m as NTA stood at RM 1.50 with most of the lands and property not valued as long as 30 years back. The company should be announcing a dividend of 1.5 cents a share in the coming days.

A&M will be looking set to focus on Amverton Cove with a RM10 GDV over 15 years as well as Amverton Park in Bukit Kemuning with a GDV of RM315m, a figure big enough to be able to keep the company busy. As of current, Amverton Cove Golf and Islan Resort is completed.

In my opinion, A&M will be very prospective in the coming near term with more superb surprises to come as Datuk Ng and the family deliver. Datuk Ng is on the process of injecting a 145 acre land in Sungai Buloh through Unik Sejati Sdn Bhd, which will further boost the value of the company with the current hot development in Sungai Buloh. To add sugar on honey, there are major plans from Hong Kong tycoon Li Ka Shing on developing the northern region of Carey Island for it's business expansion.


A&M will definitely a worthwhile stock for a long term investment based on
- 2000 acres of land in Carey Island, with a land valued of more than RM2b (based on RM5.75 psf), and Amverton Cove which is a notable RM10b GDV for 15 years.
- Amverton Park at Bukit Kemuning, 20 acres with current GDV of RM315m
- Mont' Kiara, 3 acres.
- RM93.6m cash and cash equivalents
- Datuk Ng Thian Hock asset injection - 145 acre of Sungai Buloh land
- Hong Kong Tycoon, Li Ka Shing business expansion planning at Carey Island

A&M should be look set to challenge RM 1.20 in a short term, and a longer tenure prospect will see the stock driving up to RM 1.50 to RM 1.70 in the coming days.

Joining the game of leaving out? You decide.

Bone's short term TP: RM 1.20

Cheers and have a nice day.

Regards,
Bone

A&M (5959) A&M Realty Bhd - Awesome and Majestic
http://bonescythe.blogspot.my/2014/03/a-awesome-and-majestic.html