Well, I cannot really put this under "Why I Like..." category, but I would say that Magna Prima bears watching. Things seem to be 'happening' in the near future for this counter. Magna’s earnings in the near-term will continue to be underpinned by its Magna Ville, Dataran Otomobil and U1 Shah Alam projects, which have a combined unbilled sales and outstanding construction orderbook of more than RM200m.
Things which have piqued my interest in the counter:
a) Two catalysts for future earnings growth would be the successful launch of its Magna City
project and the impending mixed development project along Jalan Ampang in KLCC.
b) Magna Prima is earmarking its recently acquired 6.95-acre site in Petaling Jaya's Section 5 for the development of "lifestyle-themed" projects. The acquisition is in line with the group's corporate move to enlarge its landbank and develop in strategic locations with high population, easy accessibility and potential for projects with significant gross development values. Situated in the Petaling Garden neighbourhood, the land is close to the high-traffic thoroughfare of Jalan Gasing and PJ-Kuala Lumpur border with a nearby link to Jalan Klang Lama. It also has the advantage of the lush green backdrop of Bukit Gasing. The site is made up of two contiguous parcels of 180,736sq ft and 122,260sq ft purchased from Petaling Garden Sdn Bhd last month for RM48.8 million or RM160psf. It also includes a row of 15 tenanted single-storey lock-up shops along Jalan 5/44.
c) On 16 July 2009, Magna Prima entered into a conditional agreement with Seri Dinar Project Development Sdn Bhd to buy from the latter 5.56ha of freehold land and parcels of leasehold land totalling 6.79ha in Gombak, Selangor, for RM40.5mil cash. Magna Prima said in a filing with Bursa Malaysia that the group’s development plans, for which Seri Dinar has obtained a development order, comprise shoplots, apartments, houses and a clubhouse. The estimated gross development value is RM130mil, of which the gross profit margin is expected to be about 20%.
d) Magna Prima has recently appointed former minister of national unity and social development Tan Sri Zaleha Ismail as its executive deputy chairman.
e)Developer Ho Hup Construction Company Bhd has appointed former Magna Prima executive director Lim Ching Choy as its group managing director. Lim has also served as Mah Sing Group Bhd's executive director before. The direction for Magna has turned uncertain with the departure of its CEO, Lim Ching Choy. Lim, an ex-banker with experience in turning around Mah Sing previously, was in fact one of the prime catalysts which some thought would turn Magna around and nurture it into a successful major developer in the long run.
f) I am not sure losing Lim is really losing Lim. It could very well be things looking up for Ho Hup and Magna Prima. A couple of months back Ho Hup said it will be launching a RM1.75 billion commercial cum residential development called Jalil City in the area in the next six to nine months. The 60-acre "jewel in the crown" of the 153-acre freehold Bandar Bukit Jalil is planned to be developed in two portions. One facing the Bukit Jalil Highway will have a 9.15-acre hypermarket (to be taken up by Giant, Carrefour or Tesco when Ho Hup decides which is offering the best proposal) and 175 units of four- to eight-storey shop-offices with lifts (priced from RM2.5 million, resulting in a gross development value of RM600 million). On the other portion facing the Bukit Jalil Golf and Country Club, there will be an eclectic blend of a lifestyle piazza with food and beverage outlets and entertainment venues, an office tower, condo hotel and 1,800 serviced apartments.
g) The trouble is Ho Hup is in pretty distressed level. Its paid up is 102m shares and its current market cap is just RM60m. While Magna Prima has 53.5m shares and a market cap of RM112m. Why would Lim leave for a company half the size of Magna Prima? Plus Ho Hup has lost RM46m and lost RM57m in 2007 and 2008 respectively. While Magna Prima made a net profit of RM23m and RM24m in 2007 and 2008 respectively. I am guessing here, but could Magna Prima be a prime beneficiary of Ho Hup's RM1.75bn venture?
I have been looking at Magna for the past few days and the share price has been having some action but too erratic for my and thin for my liking. Sometimes you just have to NOT swing the bat at every pitch ... know what I mean.
NTA/Share (RM) 2.30
Book Value/Share (RM) 2.30
Issued Share Capital (m) 53.5
52-week Share Price Range 3.30 - 1.77
p/s photo: Olivia Ong