Sometimes the winds need to be blowing in the right direction. Normally many investors would not bother much with Hua Yang. Its a small property player and has been in the business for over 30 years.
Its paid up following the recent 1 for 5 bonus is just 108m shares of 1.00 par value. Thus its market cap is a smallish RM108m. Hua Yang has carved out a niche and its reputation, though not stellar, is credible. Its showcase include Taman Pulai Indah in Johor, Oasis in BU, Symphony Heights @ Selayang and Bandar Universiti Seri Iskandar. The latter two projects have been quite successful.
The Group‘s better financial performance for the 1st 6 months of the financial year (revenue +48.5% YoY & net profit +66.0% YoY) was due to better sales achieved and construction progress for the current period. The bulk of the profit contribution was derived from the unbilled sales from Symphony Heights @ Selayang and Bandar Universiti Seri Iskandar.
For the year ended March 2010, it recorded revenue of RM103.54m and a net profit of RM11.6m, a jump of 32% from the previous year. Judging from the spectacular jump in profits for the 1Q 2011, Hua Yang is on track to register a revenue of RM160m for year ending March 2011 and a net profit of RM20m, which translates into an EPS of 19 sen. PER wise its very cheap.
What's gratifying is that its pipeline is on track into 2012 and 2013 which should see revenue jumping to nearly RM300m. Its NTA is at a comforting RM2.25 per share.
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If you look at the chart above, the sharp jump recently and its fallback was due to over speculation for its 1 for 5 bonus. Realistically speaking, I prefer Hua Yang over the Mah Sings and IJM Lands because their exposure is towards the more affordable range of properties.
The government will introduce Skim Rumah Pertamaku through Cagamas Bhd, which will provide a guarantee on down payment of 10% for houses below RM220,000. This scheme is for first-time house buyers with household income less than RM3,000 per month. In other words, the house buyers will obtain a 100% loan without having to pay the 10% down payment. In addition, first-time house buyers will also be given stamp duty exemption of 50% oninstruments of transfer on a house price not exceeding RM350,000. The Government also proposes that stamp duty exemption of 50% be given on loan agreement instruments to finance such first-time purchase of houses. Hence, Hua Yang is a clear-cut winner under these incentives.
Major Shareholders
Heng Holdings Sdn Bhd (30.7%)
Poh Meng Cham (14.9%)
You might like to know that the Chairman of the company is none other than Ting Chew Peh. Read into it however you like. Its a very well managed small cap. Winds are blowing the right way. I see RM1.30 as easily attainable before the year is over. If you like property sector in Malaysia, this is a safe bet.
NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
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