Technical | Fundamental Analysis Discussion Stocks Listed In Bursa

Friday, August 22, 2014

Brem ... Cheaper Entry For Property Development In Segambut.

A property and construction player expects strong demand for its properties especially in prime locations like Segambut Dalam in KL to boost its financial performance in the new fiscal year ending March 31 2015.
 
Property development will underpin its growth for 2014 to 2015.

Brem has a total of 13.56ha of freehold land in Segambut Dalam as of March 31 2013 for the development of Bukit Prima Pelangi, which could generate a GDV of rm2.56 billion. This development is expected to sustain its operations for six to eight years from 2014.

It had also bought a parcel of land in Segambut to replenish its landbank. The latest purchase raises its land reserves in the area to almost 15ha.

In total, it has 30.1ha in KL and PJ, including in Ulu Klang. These land are under the purview of its 75% owned subsidiary.

The property segment made up almost 60% of the group’s revenue in FY2014.

Brem will focus on condominium and apartment development after having complted its terrace components for its Bukit Prima Pelangi development.

Brem is also involved in construction, water concessions as well as property investment and holding activities. All divisions are profitable.

Its construction division has an order book of rm260 million as of March 31 2013. As for property investment, it owns and operates Kepong Brem Mall.

Brem participated in a water concession business in Papua New Guinea some 17 years ago prior to 2014. It has a 22 year agreement with PNG’s government to supply water to the Pacific island nation. The concession will expire in June 2019.

Its net asset value per share stood at rm2.79. It was earlier reported its real net asset could be worth about three times its NAV.

Brem acquired most of the Segambut Dalam land at an average price of rm65 psf from 1995 to 2005. This is substantially lower than the purchase price of rm185 psf Brem paid for its latest transaction in July 2014.

The company will be a cheaper entry to property development than other property players like Keladi which had land near Bukit Prima Pelangi.

Aside from the prime land in KL and PJ, it owns 182.02ha of development land in the Klang Valley including Bukit Raja and in Kedah. They are earmarked for long term development. These parcels were purchased at low prices … like the 1.88ha in Mukim Bukit Raja which has low book value of rm3000 as of March 31 2013.

Brem does not adopt a policy of regular revaluation for its landed properties.

It had disposed of its 32.89% stake in Bertam Alliance Bhd in July 2014 for rm80.24 million. It will channel the sale proceeds into other, more attractive and higher yield investments when opportunity arise.



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