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KUALA LUMPUR: DBS Group Research is making a buy call on Yong Tai Bhd, envisioning long-term earnings visibility as the tourism-related property developer’s Impression City and Impression Melaka projects ride on the booming Chinese tourism.

“As the first Impression Series outside China, the Malacca Straits-fronting Impression Melaka is poised to be a resounding success by tapping into the booming Chinese tourism in Malaysia, which has seen an impressive 11% tourist arrivals CAGR (compound annual growth rate) over 2000-2016 (versus 1% for Malaysia’s overall tourist arrivals),” the report said.

The stock was trading at an undemanding nine times FY18 price-earnings, it said, calling this “grossly unjustified.”

The report, prepared by AllianceDBS Research, gave a 12-month price target of RM2.10. The counter closed unchanged at RM1.48 on Wednesday with 1.4 million shares done.

DBS Group Research said Impression Melaka – featuring a live, large-scale, cinematography show using light and sound technology – offered a compelling value proposition given its estimated 20% internal rate of return over the 30-year concession from Impression Wonders Art Development Co Ltd of China.

This would transform Yong Tai into an emerging cash cow with strong recurring income, it reckoned.

The report said that the Malacca property market was under-appreciated despite its “immense potential” as the target was not just confined to its 900,000 local population but also more than 16 million tourists that visited the World Heritage City annually.

“Yong Tai’s impressive unbilled sales of RM990mil – anchored by en-bloc sales of 262 retail lot units in Impression City for RM873mil – will underpin strong earnings visibility strong earnings visibility over the next two years,” said DBS Group Research.

The report said Impression City’s attractive investment merit was under-appreciated by investors, and the official opening of Impression Melaka in February 2018 would be a major catalyst.

“Given Yong Tai’s unrivalled competitive advantages arising from its unique tourism appeal and synergistic property product offerings, it iss expected to deliver exponential earnings per share CAGR of 57% over FY16-FY19f,” AllianceDBS Research said.

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

Monday April 22, 2013

Malacca expects RM400mil cruise terminal and others to drive its growth
By B K SIDHU
[email protected]

Malacca Chief Minister Datuk Seri Mohd Ali Bin Mohd Rustam during the interview at Seri Bendahara, Malacca.
MALACCA: The development of a RM400mil marina jetty terminal in Malacca for cruise liners is in the works, one of many projects lined up to drive the state’s growth.

Malacca was eyeing RM8bil of investments this year RM3bil and RM5bil for manufacturing and services sectors, respctively, Malacca chief minister Datuk Seri Mohd Ali Rustam told StarBiz.

He said the manufacturing sector would create 6,000 jobs this year and the services sector, 2,000.

Last year, investments into the state totalled RM5.3bil. And in 2011, RM4.3bil was secured for the manufacturing sector.

Though on average local investments had outpaced that of foreign, the converse had been true for some years now, Ali Rustam said. The state has 26 industrial parks.

He said that in the past 12 years till 2012, the state government had managed to secure RM29bil worth of investments, of which RM20.46bil was foreign.

In the last few years, gross domestic product stood at between 5% and 6%, while the unemployment rate was at 0.7% and poverty, 0.5%.

Ali Rustam said for this year, he expected RM800mil in investments from US-based Guardian Industries a global float-glass maker to set up a high-technology glass products manufacturing plant in Jasin; a RM1.8bil solar thin film plant by US-based WNK Solar; and RM500mil worth of small projects for the manufacture of electrical and electronics as well as warehousing and automation.

“The groups are in the process of getting the various approvals to invest in Malacca,” he said.

Earlier, US-based Sunpower Corp had committed to invest RM3.7bil, of which RM2.4bil had already been pumped into a solar panel plant that has started operations. This year, the company is expected to invest the balance RM1.3bil to expand operations.

“Our focus is on the K-Economy and high technology, and our manufacturing is all high-tech. We also now have investments in green and biotechnology. Our manufacturing and services sector, tourism and health tourism are strong,” Ali Rustam said.

On tourism, he said with the increasing numbers of tourists coming to Malacca every year, plans were in place to build more resorts and hotels, an underwater world and a theme park.

“We are talking to Eden Enterprises for the Seaworld/Underwater world project and with an Indonesian party for the theme park project,” Ali Rustam said.

Two new specialist hospitals in Ayer Keroh and Kelebang also have been planned. They would be developed by local companies.

On the marina jetty terminal, Ali Rustam said it would be undertaken by Kejuruteraan Asas Jaya Sdn Bhd on a 121.81ha site.

“The jetty would be built for RM100mil and the needed land would be reclaimed for RM300mil. All these are initial investments,” he said.

This development will facilitate cruise liners docking at least twice weekly at the jetty. Each liner carries about 3,000 passengers. “Even if each passenger spends RM100 a day in Malacca, the spillover business activities would be huge over time,” he noted.

Tourist arrivals in the state in 2000 was 1.6 million, and rose to 12 million in 2011. Last year, the number increased to 13 million and Ali Rustam expects a steep rise with the docking of the cruise liners.

“That is also why we need more hotels and resorts to cater to this new growth,” he said.

The jetty terminal should be completed by 2015.

Malacca also made the New York Times’ list of 45 cities to be visited in the world this year. This could be attributed to its World Heritage City status granted by the United Nations Educational, Scientific and Cultural Organisation in 2008, a report said.

Ali Rustam has been the Chief Minister since December 1999 and has, over the years, managed to make Malacca more attractive to investors, for instance, initiating a one-stop approval centre to facilitiate investor needs and requests.

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