GSB (7077) - ColdEye bought & sold GSB? Better tell ColdEye to buy back all his GSB shares By Calvin Tan Research
Dear fellow investors of i3 forum,
Last friday in Booming Iskandar I received a call from my friend in Perak. He is a housing developer. And he asked me about GSB.
I told him that G Residence also sold about 70% of its Condos in Iskandar. He asked me, "How much per sq ft?"
I replied, "About Rm400 psf". He said that was a lot of profit. Construction cost is about Rm100 psf. Straightaway he hung up his phone and bought 100,000 shares of GSB between 11.5 sen to 12 sen.
He also mentioned that ColdEye also owned GSB shares in passing. I was surprised.
Then again fellow i3 forumers told me ColdEye bought & sold off his GSB shares sometime in year 2015.
Ha! If ColdEye had sold then. Now is the time for ColdEye to buy back his GSB shares!
These are My Research based on revealed facts and figures :
1) GSB is now changed from Manufacturing of Industrial Products to Property Development
GSB - RECLASSIFICATION OF SECTOR
GSB GROUP BERHAD
Kindly be advised that GSB’s shares will be reclassified from Industrial Products sector to Properties sector with effect from 9.00 a.m., Monday, 14 September 2015.
This is what we call "Progress through Innovation". Singapore has zero resources. No tin, no rubber, no oil palm, not enough water. Yet through INNOVATION Singapore is now one of the Highest Per Capita Income Nation on earth - equal to a First World Nation.
2) G RESIDENCE was touted to make one off profit of 9 sen if all the Units are finally sold off. So far so good - about 70% are sold.
Any evidence? Yes! Of course!
Please go and check up the past year and past quarterly accounts of GSB
Trade and other receivables Rm 43,329,000 (December 31st 2016)...............Rm 28,766,000 (March 31st 2016)
Do you notice that Receivables have increased from Rm28.766 mil to Rm43,329 mil in just 9 months?
That's an increased of Rm14.563 MILLIONS! Receivables!
What are these Rm14.563 Mil Receivables? What did GSB sell?
G Residence & Bentong Properties of course!
Now G Residence has built until the 4th level. All those 70% buyers have taken loans from Banks like Maybank, Affin Bank, UOB Banks, CIMB Banks, Public Banks & others.
As GSB is completing work in stages. These Receivables from Bank Loan Release will be received in stages - a cool Rm14.563 Millions! And more to come.
3) Now GSB is into Joint Venture with Land Owner. So there is almost no fear of interest piling up.
This is the same with Gadang - being a Joint Venture with Hatten Group.
And comparing to Gadang's I Capital City - GSB's G Residence is located in a much better area, more affluent population of Tmn Molek, Johor Jaya, Mt Austin & Pernas Jaya. So if I Capital City can sell - why not G Residence? After all G Residence is only 15 minutes away from CIQ Custom. Just a causeway bridge to affluent Singapore.
4) Another way for low gearing is to raise Capital by Private Placements.
And the 10 sen private placements were all taken up.
And the CASH from these private placements were used as
Status of Corporate Proposals Announced As at 24 February 2017, being a date not earlier than seven days from the date of this interim financial report, the utilisation of proceeds from private placement of 88,000,000 new ordinary shares of RM0.10 each completed on 18 December 2015 is as follows
:
Utilisation from the proceeds received
Payment to contractor for the remaining piling works for the project in Johor Bahru... RM1.186 million
Payment to contractor for the remaining basement infrastructure works ......................Rm4.47 millions
Payment to contractor for part of the initial building works for the project ....................Rm2.794 millions
As you can see the major portion of expenses involve in
piling = Rm1.186 mil
Basement infrastructure = Rm4.47 mil
Initial building works......= Rm2.794 mil
These proceeds are put to good use as G Residence is now built up to the fourth Level.
From here floor by floor with aggregate ordered from YTL Cement Mixer will do a swift & speedy until completion
Photo. no. 6 The actual progress of G Residence (Now reaching level 4)
With the most difficult & expensive portion of Piling & Foundation Works done - the construction from the fifth floor and above will be a breeze and cost less.
5. With all the progress payments received in coming months all the debt obligations will be met just by this one project. The remaining unsold shop units could be tenanted out.
Note:
Shop Units in GIANT PLENTONG commands higher rental that Leisure Mall & Perling Mall due to its prime location with heavy footfall & affluent shoppers. So G Residence Shop Unit can expect fairly resaonable high rental. This will act as a future reit.
6. NTA of GSB should triple from 10.87 sen to more than 30 sen if All Assets are revalued. So GSB at 12 sen still has a very good margin of safety.
As GSB owns many pieces of Assets at Old Book Value.
Let's look at a few examples (please refer to GSB owned properties in AR
1) Parcel No. 1307
Storey No. 3, Building 1
Taman Shamelin Perkasa
PT1604
Mukim of Kuala Lumpur,
District of Kuala Lumpur.
Three (3)
bedroom
apartment for
management
31-Mar-2014 Leasehold 99
years expiring on
11.09.2082
(age is approx
22 years)
Land size: 95.00 sq meter or 1,023 sq ft Book Value Rm124,490
Now refer to advertised Apt in Shamelin Perkasa
RM 420,000
3 Bedrooms 2 Bathrooms
Jalan 3/91 Taman Shamelin Perkasa, Cheras, Kuala Lumpur
Apartment For Sale
Size 1023 sqft Leasehold
http://www.propertyguru.com.my/property-listing/apartmen-arena-shamelin-for-sale-by-jacky-wong-24889346
So Book Value is Rm124,490
Current market value Rm420,000
So price difference is Rm295,510
or 237% more than book value.
This shows that GSB is sitting on undervalue assets
Now take a look at another GSB asset
2) Parcel No. D-113
1st Floor, Block D
Pandan Height, PT 34798
Mukim of Ampang,
District of Ulu Langat,
State of Selangor.
Three (3)
bedroom
apartment for
management
31-Mar-2014 Freehold
(age is approx
18 years)
79.25 sq mter or 853 sq ft Book value Rm89,608
This is current value
RM 320,000
3 Bedrooms 2 Bathrooms
- Jalan 6/19, Pandan Perdana, Cheras, Kuala Lumpur
This is the auction reserved price
http://www.propertyguru.com.my/property-listing/pandan-heights-condominium-for-sale-by-peter-yap-25032410?ref=ls%7C%7C2%7C1" style="text-decoration-line: none; color: rgb(0, 102, 170);" target="_blank" rel="nofollow">http://www.propertyguru.com.my/property-listing/pandan-heights-condominium-for-sale-by-peter-yap-25032410?ref=ls%7C%7C2%7C1 >
So if revalued
This unit should increase by Rm230,392 or 257% more!
One more post. This time on a Shop house in Bentong
3) H.S. (D) 12321
PT No. 14978
P206, Lorong 10
Taman Bentong Mahmur
28700 Bentong
Pahang Darul Mahmur
Shop office 31-Mar-2014 Freehold
208.00 sq meter or 2,238 sq ft Book value Rm232,652
Similar shop-office advertised in media
Taman Bentong Makmur, Bentong
Bentong, 28700, Pahang
This shophouse with 500 bird nets was advertised in year 2013 for Rm890,000
This is Rm657,348 more than book value or 282% more
See
https://www.iproperty.com.my/property/taman-bentong-makmur-bentong-2160422" style="text-decoration-line: none; color: rgb(0, 102, 170);" target="_blank" rel="nofollow">https://www.iproperty.com.my/property/taman-bentong-makmur-bentong-2160422
All other Assets are also listed at Deep Discount to Currenct Market Value. GSB like Mui Bhd, has deep value assets hidden from those with careless or carefree mindset.
Now GSB Management could have revalued these Assets and book them as profit like Fiamma, Eg & Seacera did. This kind of stock boosting to dump Seacera warrants to unsuspecting sorchai is a bad case of poor management going for fast gain (short term gain and long term pain - pain in the neck for those who ignorantly chased)
No, this is not the short cut GSB Bosses are doing. The excellent Managers/Directors of GSB wants to ADD VALUE TO THESE PRIZED. PRIME ASSETS!!
I quote from Chairman's Announcement
CHAIRMAN’S STATEMENT
CORPORATE GOVERNANCE The Board of Directors of the Group emphasises on corporate governance and at all times looking at value creation for our shareholders. Measures taken and implemented have been outlined in this Annual Report under the Statement on Corporate Governance, the Statement on Risk Management and Internal Control, and the Audit Committee Report.
LOOKING AHEAD
GSB Group has demonstrated its commitment to grow its property development segment with the strategic acquisitions undertaken. Despite the current cautionary sentiments amongst property developers and home buyers, we will persevere given that our products are not high-end developments and are at good locations. We priced our products for end-user markets and end-financiers should be more receptive to lending.
Calvin comments:
These are the words from Chairman
1) at all times looking at value creation (ADD VALUE TO ALREADY GOOD VALUE ASSETS!)
2) the stratefic acquisitions (focus on special niche areas with potential)
3) our products are not high-end developments and are at good locations (Bread and butter properties that sell well)
Calvin gives "THUMB'S UP TO GSB MANAGEMENT!!
And So Calvin has turned bullish & Issue A Strong Buy Call on GSB
Your friend
Calvin Tan
Singapore
GSB (7077) - ColdEye bought & sold GSB? Better tell ColdEye to buy back all his GSB shares By Calvin Tan Research
http://klse.i3investor.com/blogs/www.eaglevisioninvest.com/120828.jsp
