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YONG TAI EXPANDS LAND BANK IN MALACCA

Yong Tai Acquires Two Parcels of Land in Malacca
• March 22, 2017


Key player in the tourism and cultural development in Malacca, Yong Tai Berhad will embark on two mega property projects with GDV of RM2.3 billion.

Yong Tai Bhd has acquired two parcels of land within the Impression City project in Malacca from Mustazah Osman and Laila Endut of Laila Development Sdn Bhd for RM35 million, reported The Sun Daily.

In a Bursa Malaysia filing, Yong Tai revealed that the acquisition price will be funded via a mix of bank borrowings and/or internally generated funds.

The property developer intends to develop the six acre land into a mixed development project comprising retail units, a hotel and serviced apartments.

With a gross development value (GDV) of RM1.1 billion and a gross development cost (GDC) of RM800 million, the project, which is set to be completed in five years, will yield a potential gross profit of RM300 million.

Meanwhile, Yong Tai’s fully-owned unit YTB Impression Sdn Bhd has inked a joint development agreement with JM Bestari Land Sdn Bhd for the development of another piece of land in Melaka Tengah.

Set to be completed in five years, the project will include retail, office and commercial units.

It is expected to have a GDV of RM1.2 billion and a GDC of RM800 million, resulting to a potential gross development profit of RM400 million.

Article source: http://tourism-melaka.blogspot.com/feeds/posts/default

MELAKA IMPRESSIONS AND IMPRESSIONS CITY IMPACT ON YONG TAI

KUALA LUMPUR: RHB Research projects a multi-fold rise in net profit for Yong Tai as the former garment company focuses on property development.

“This would be underpinned by the Impression City project, which would see a potential total gross development value (GDV) rise to RM6.1bil from RM164mil currently,” it said.

The research house said this  ought to keep the group busy for the next eight to 10 years. Impression Melaka, it added, offers a further upside to both earnings and valuations.

“We estimate a valuation range of RM1.03 to RM1.18,” it said as it initiated coverage.

RHB Research said in line with the group’s overall expansion plan into the property sector, Yong Tai has announced several proposals.

They are the RM37mil acquisition of a 17 acre plot in Melaka (Impression Land) for the development of a theatre to produce the Impression Melaka as well as the acquisition of PTS Impression (to hold a 30-year license to stage the show) for RM3mil. It also has a joint venture to develop 100 acres of land adjacent to the Impression Land.

The company is also undertaking a fund-raising exercise to raise more than RM300mil.

“The proposals are expected to be completed/take effect by 1HFY17 (June),” it said.

RHB Research said Impression Melaka, which is the first of its kind outside China, is a live cinematography show that utilises the latest light and sound technologies, modern art concepts and cultural performers.

This is to be the first live largescale Impression Series outside of China and is one of the “entry point project” within the National Key Economic Area (NKEA) initiative for the tourism sector. The performing arts centre is estimated to cost RM300mil, with completion targeted for end-2017.

“Management expects Impression Melaka to contribute RM50mil to RM60milper annum in bottomline thereafter,” it said.

The research house said Impression City is expected to contribute RM5.4bil to total GDV. Concurrent with the construction of the theatre for Impression Melaka, Yong Tai is to develop the land adjacent to it (the development collectively known as Impression City).

The mixed development project includes residential, commercial and retail units. The total GDV over an eight to 10 years period is estimated to be RM5.4bil.

“Management believes the Impression Melaka project would spur the growth of tourism and related industries such as real estate, hotels and eateries, that is catalysts for Impression City.

“We project for Yong Tai to turn around and post a net profit of RM14mil in FY17, accelerating to RM64mil in FY18. This is underpinned by the progress of its property projects. Our forecasts do not factor in the contribution from Impression Melaka, which we have pushed to FY19.

“We derive an indicative valuation estimate range of RM1.03 to  RM1.18 (fully diluted) based on SOP. The low end of our valuation range excludes Impression Melaka while, for its property development business, we have ascribed a 40% discount to its RNAV.

“The top end of our valuation range incorporates the show, where we estimate the business to be worth RM107mil based on DCF. We see upside to our valuation for Impression Melaka as execution risks ease. Our indicative valuation estimate range implies an FY18F P/E of seven to eight times (10.6 to 12 times, fully diluted),” it said.

Article source: http://tourism-melaka.blogspot.com/feeds/posts/default