ASEANA PROPERTIES. 11 06 03 Asean… · Operationally, Aseana should, by the end of 2012, complete...
Transcript of ASEANA PROPERTIES. 11 06 03 Asean… · Operationally, Aseana should, by the end of 2012, complete...
ASEANA PROPERTIES www.aseanaproperties.com
COMPANY UPDATE 3rd JUNE 2011
Aseana Properties’ Interim Management Statement for Q1 2011 confirms that the Company is making good progress in developing its core assets. These comprise upmarket commercial office space, retail malls and residential condominiums and apartments in Malaysia with other developments in Vietnam. While parts of the Malaysian property market are becoming more competitive, Aseana is focused on higher end opportunities where margins are attractive. Vietnam is on a slower development curve. The fund has an initial but renewable seven year life through 2015 with only one of its projects expected to be completed beyond that date. Aseana hopes to have completed and sold all its other assets in this period.
Q1 unaudited results for the 3 month period showed revenues of US$3.62m, a
loss before tax of US$2.54m and a loss after tax of US$2.82m. These figures
compare with revenues of US$0.79m and losses both before and after tax of
US$4.44m in the corresponding period of 2010. The losses were due to
marketing costs totalling US$1.5m for projects on which no revenues had yet
been booked.
Unaudited net assets at 31st March stood at US$190.4m, US¢89.6 per share,
slightly down on the figures for the 31st December year end of US$192.9m and
US¢90.8 per share, due to the reported loss. The net asset value stands at a
premium of 75% on the current share price.
Unaudited realisable net assets were US$245.4m or US¢115.5 per share
compared with the year-end figures of US$244.6m and US¢115.1 per share. In
local currency terms, the market values of all projects were unchanged.
At the period end, cash held net of debt was US$37.9m, down from US$140.9m
at the 31st December. Net gearing is now 23.1% and Aseana’s strategy is to
conserve cash for its core projects.
Operationally, Aseana should, by the end of 2012, complete the sales of SENI
Mont’ Kiara apartments and Phase 2 retail lots in Sandakan Harbour Square. In
Vietnam, where progress has been slower, new projects are in the pipeline (co-
developments with its Vietnam associate, Nam Long Corporation) but have a
longer time line. Vietnam’s weight in the ex-cash portfolio may then rise from its
current 22%.
House broker, Panmure Gordon, expects Aseana’s progress to accelerate after
2012 as current major schemes now under construction achieve completion and
sale. The broker puts a present value on the shares of US$¢92.0, a premium of
79% to the current share price, and retains a Buy recommendation.
Year end 31 Dec
Revenue (US$m)
Gr. Profit (US$m)
PBT (US$m)
PAT (US$m)
Dil EPS (US¢)
NAV PS (US$)
DPS (US¢)
2010A 179.3 2.2 (15.4) (13.3) -9.51 0.91 0.0
2011E* 326.7 18.4 5.1 3.8 1.80 0.93 0.0
2012E* 139.5 13.2 13.3 10.0 4.47 0.97 0.0
2013E* 251.0 38.0 31.6 23.7 11.14 1.08 0.0
2014E* 30.0 7.5 1.0 0.7 -0.77 1.07 0.0
2015E* 612.4 144.6 136.5 102.3 27.91 135 0.0
* Forecasts from Panmure Gordon, the house broker.
SHARE INFORMATION
Code ASPL.L
Market Full List
Sector Real Estate Investment
Share price US¢51.5
12m high/low US¢57.4 – 40.3
Issued shares 212.525m
Market cap US$109.45m
Broker Panmure Gordon
SHARE PRICE PERFORMANCE
COMPANY DESCRIPTION
Aseana Properties Limited (ASPL) is a property development company which invests in development projects in Malaysia and Vietnam. Ireka Development Management Sdn Bhd (IDM) is a wholly-owned subsidiary of Ireka Corporation Berhad, a Malaysian listed company with over 40 years experience in construction and property development, and is the exclusive Development Manager for ASPL.
FINANCIAL INFORMATION (31/05/2011) (Unaudited)
Net Asset Value (NAV) US$190.4m
NAV per share US¢89.6
Net cash and bank equivalents US$37.85m
Gearing (total debt/total equity) assets) DEBT/NET ASSETSD/
42.6%
Gearing net of cash 23.1%
FINANCIAL DIARY
Next AGM 14 Jun 2011
Next half year end 30 Jun 2011
Next interims announcement Aug 2011 (TBC)
Nest year end 31 Dec 2011
PREVIOUS CITY INSIGHTS RESEARCH
Initiation Profile – 6 May 2010
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COMPANY UPDATE 3rd JUNE 2011
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INTRODUCTION
Aseana Properties has issued its Interim Management Statement accompanied by
unaudited results for the Q1 2011 on the 19th
May. The first section of this Update
summarises the key highlights of the Statement. All tables and charts presented in this
Update have incorporated the latest figures. The latest full year audited results, as
presented by Aseana on the 20th
April, with accompanying Income Statement, Balance
Sheet and Cash Flow, are covered in the next section.
Marketing expenses account for Q1 loss
Q1 unaudited results for the 3 month period showed revenues of US$3.62m compared
with revenues of US$0.79m. The revenues were attributable to the sale of completed
properties in Tiffani by i-ZEN (95% now sold) and on Phase 2 units in Sandakan Harbour
Square (93%). The losses reported were due to marketing costs totalling US$1.5m for
projects on which revenues have yet to be booked. Those marketing expenses largely
account for the unaudited pre- and post tax losses of US$2.54m US$2.82m respectively
(US$4.44m for both in the corresponding period of 2010).
…while sales continue with revenues to be booked by year end
In addition, Aseana successfully completed 325 units (Phase1) of SENI Mont’ Kiara
luxury condominiums in Kuala Lumpur and these units are being progressively handed
over to their buyers. It is hoped that the majority of these sales will be booked by the end
of this year. Phase 2 is due for completion in September 2011.
Phuoc Long B project to be co-developed with Nam Long…
No new developments have been undertaken in Q1, the focus being on accelerating the
completion and sale of existing projects. Importantly, however, Aseana has signed a
partnership agreement with Nam Long Corporation in April to co-develop another project
on a 55:45 basis. This project, all residential with a gross development value (GDV) of
c.US$100m, is the Phuoc Long B in District 9 of Ho Chi Minh City (HCMC), Vietnam.
…along with Tan Thuan Dong With uncertainty hanging over the time scale for receiving the necessary planning
consents, Aseana formally withdrew from the acquisition of development land in Mont’
Kiara as was announced in January. Thereafter in May the Company and PRUPIM
Vietnam Property Fund, managed by Prudential Property Investment Management,
mutually agreed to terminate the conditional agreement due to delays in fulfilling the
conditions of the agreement including an Investment License in the Tan Thuan Dong
residential development. Nevertheless, Aseana has affirmed that it will continue with the
project with its partner, Nam Long, on a 80:20 basis.
Minor change in NAV due to announced loss
The Company’s unaudited net asset value at 31st March 2011 was US$190.4m and
US¢89.6 per share compared with audited figures of US$192.9m and US¢90.8 per share
reported at the 31st December 2010. The marginal decline in the NAV is due to the
aforementioned loss after tax. In local currency terms, project values were unchanged.
Cash conservation to be supplemented by a new MTN programme
Aseana’s cash, net of its bank overdraft, declined to US$37.9m compared with
US$140.9m at the 31st December 2010. This was due to the repayment of US$72.9m of
medium term development loans for the of 1 Mont’ Kiara, and cash absorption in other
pipeline projects. The Company is pursuing a policy of cash conservation and arranging a
new MTN programme of up to US$162m, for completion by September 2011. This will
be allocated to the refinancing of Phases 3 and 4 of the Sandakan Harbour Square
project and the financing of the Aloft Kuala Lumpur Sentral Hotel.
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COMPANY UPDATE 3rd JUNE 2011
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2011 prospects look good for further
sales
Expectations for 2011 depend on further sales progress and overseas buyers from other
parts of south east Asia are targeted for both of the following which provide good
prospects:
1) Tiffani by i-ZEN project where to date 95% of the 399 units have been sold;
2) SENI Mont’ Kiara where the level of completed sales achieved to date is 68%.
Properties for Phase 1 are being handed over from April 2011. Phase 2 is due for
completion in September 2011;
3) Sandakan Harbour Square Phase 2 retail lots where to date 93% have been sold.
Phases 3 and 4, comprising a retail mall and resort hotel, though expected to be
completed and open by December 2011, will not be sold for a further two years.
FINAL RESULTS
Loss on disposal plus increased marketing accounted for 2010 loss
Full year results for the year ended 31st December 2010 were announced on 20
th April
2011. The results showed a loss due mainly to two factors, an increase in marketing
expenses (US$10.0m against US$4.8m in 2009) and a loss of US$6.7m (nil in 2009) from
the disposal of 1 Mont’ Kiara retail mall and office tower.
Financial summary
Revenue increase of 55.6% to US$179.3m (2009: US$115.3m);
Net loss before tax US$15.4m (2009: US$4.3m profit);
Net loss after tax attributable to parent equity holders US$20.2m (2009: US$0.84m profit);
Loss per share US¢9.51 (2009: EPS US¢0.37).
Total comprehensive expense (including current and fair value of asset changes) attributable to parent equity holders US$12.2m (2009: Income US$0.9m).
201o was a busy and eventful year… Operational progress
New build: Construction started on first phase of International Hi-Tech Healthcare Park in
Ho Chi Minh City (HCMC).
Acquisition: Four star business hotel acquired in Kuala Lumpur Sentral; development in
progress for completion in 2012 Q4; advanced negotiations under way with Starwood
Asia Pacific Hotel and Resorts Pte. Ltd. to manage the hotel under its ‘Aloft ‘brand.
Disposal: office tower and retail mall at 1 Mont’ Kiara to ARA Asia Dragon Fund for
US103.7m; completed and handed over to buyers.
…with sales revenue boosted by 1
Mont’ Kiara
The Income Statement is shown overleaf. Relating to real estate companies, Aseana has
adopted IFRIC 15 – Agreements for the Construction of Real Estate – which prescribes
that revenue be recognised only when properties are completed and occupancy permits
issued. Thus all Group revenue was derived from developments in Malaysia, none being
completed in Vietnam during the year.
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COMPANY UPDATE 3rd JUNE 2011
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Group revenue increased due to the completion of 1 Mont’ Kiara, US$166.3m plus other
completed property sales in i-ZEN@Kiara 1, Tiffani by i-ZEN and Sandakan Harbour
Square (Phase 2) totalling US$12.4m.
Loss on disposal plus rise in
marketing expenses
The net loss before tax of US$15.4m included losses of US$6.7m (nil in 2009) from the
disposal of the retail mall and office tower at 1 Mont’ Kiara with the 25% income tax
charge for early disposal accounting for most of it. In addition, marketing and other
operating expenses increased by 63% to US$12.9m (2009: US$7.9m). Marketing
expenses consists mainly of commission, discounts, rebates and mortgage interest
subsidy. These costs were recognised as and when incurred and are often ahead of the
recognition of corresponding revenue. Management fees totalling US$4m (2009:
US$4.2m) were based on the NAV at the end of each quarter. No performance fee was
triggered. The net loss after tax was US$21.2m (2009: US$0.7m).
The total comprehensive loss for 2010 was reduced to US$13.3m (2009: profit US$0.5m)
as a result of two factors, foreign currency translation gains of US$3.1m and fair value
gains on available for-sale investments totalling US$4.8m. Neither was significant in
2009. The loss per share was US¢ 9.51 cents against earnings per share in 2009 of US¢
0.37.
INCOME STATEMENT
Statement of Comprehensive Income
Year ended 31st December 2009 2010 Change (%)
Figures in US$ (000s)
Revenue 115,256 179,345 55.6
Cost of sales (100,746) (177,184) 75.9
Gross profit/(loss) 14,510 2,161 (85.1)
Other income 248 679 173.8
Administrative expenses (1,064) (1,017) (4.4)
Foreign exchange (loss)/gain 1,827 (670)
Management fees (4,196) (3,994) (4.8)
Marketing and other operating expenses (7,890) (12,852) 62.9
Operating profit/(loss) 3,435 (15,693)
Investment income 2,115 794 (62.5)
Finance costs (595) (534) (10.3)
Share of results of associated company (607)
Profit/(loss) before tax 4,348 (15,433) -
Tax (3,635) (5,795) 59.4
Profit/(loss) after tax 713 (21,228) -
Non-controlling interests 122 1,023
Attributable to equity holders of the parent 835 20,205 2,319.8
Other comprehensive income net of tax:
Foreign currency translation gains/(losses) (209) 3,107 -
Incr. in fair value of available-for-sale investments 4,828 -
Total comprehensive income for the year 504 (13,293) -
Profit/(loss) per share US cents 0.4 (9.5) -
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COMPANY UPDATE 3rd JUNE 2011
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BALANCE SHEET
Total assets: US$676.9m, an increase on US$528.8m for 2009, of which the major
constituents were inventories and cash;
Inventories: US$431.5m, an increase on US$399.0m for 2009, of which nearly 89%
was work in progress and the remainder land held for development;
Cash and cash equivalents: US$150.4m (2009: US$62.0m) boosted by proceeds
from the sale of 1 Mont’ Kiara;
Deferred revenue: US$188.5m (2009: US$109.8m) included in total current liabilities.
This represented the excess of progress billings to purchasers of development properties over revenue recognised;
Net asset value: (NAV) was US$197.2m (2009: US$209.4m); on a per share basis,
NAV was US 90.8¢ (2009: US 96.5 ¢);
Total debt: US$162.6m (2009: US$119.9m) and net debt US$12.2m (2009:
US$57.9m);
Cost of debt: interest ranging from 4.85% p.a. to 7.13% p.a. on either Ringgit or US
dollar denominated debt, slightly above the 2009 annual rates of 3.59% - 6.55%.
Gearing: 82.5% and 6.2% net of cash (2009: 57.3% and 27.7% respectively).
Balance Sheet
Year ended 31st December 2009 2010 Change
Figures in US$ (000s) (Restated)
Property, plant and equipment 1,070 4,497 3,427
Available-for-sale investments 17,224 22,052 4,828
Intangible assets 17,174 17,174
Deferred tax assets 7,167 19,400 12,233
Non-current assets 42,635 63,123 20,488
Inventories 399,040 431,473 32,433
Trade and other receivables 24,392 31,499 7,107
Amount due from associate 785 382 (403)
Cash and cash equivalents 61,957 150,385 88,428
Current assets 486,174 613,739 127,5650
Total assets 528,809 676,862 148,0530
Trade and other payables (84,504) (112,940) (28,436)
Bank loans and borrowings (36,976) (68,463) (31,487)
Medium term notes (72,923) (72,923)
Current tax liabilities/deferred revenue (112,120) (201,099) (88,979)
Current liabilities (233,600) (455,425) (221,825)
Bank term loans (20,147) (21,176) (1,029)
Medium term notes (62,737) 62,737
Amount due to non-controlling interests (2,887) (3,048) (161)
Non-current liabilities (85,771) (24,224) 61,5470
Total liabilities (319,371) (479,649) (160,278)0
Net assets 209,438 197,213 (12,225)
Non-controlling interests (4,365) (4,346) 19
Shareholders' Equity 205,073 192,867 (12,206)
NAV per share (US cents) 96.5 90.8 (6.0)
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COMPANY UPDATE 3rd JUNE 2011
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CASH FLOW
Deferred revenue a substantial benefit
to working capital
Cash generated from operations improved to US$78.8m against absorption of US$1.0m
in 2009. The major factor, outweighing the loss before tax, was a substantial positive
working capital movement of US$95m (2009: US$2.6m deficit) arising from the increase
in deferred revenue of US$78.7m (2009: US$9.2m reduction).
Major improvement in operating cash
flow
Below the line, interest paid declined in the period to US$5.0m and tax paid rose to
US$7.4m (2009: US$7.4m and US$5.5m respectively), the latter due to increased
property sales made during the year. Thus net operating cash flow totalled US$66.4m
compared with a negative flow of US$13.9m in 2009.
Limited new investments undertaken Investing activities totalling US$3.6m included a US$2.9m deposit paid for the acquisition
of the Kuala Lumpur Sentral hotel. Most investment was work in progress on existing
projects rather than new starts. In the Financing section, debt repayment totalled
US$44.8m. Debt used of US$72.6m included the drawing down of the medium term
finance to develop 1 Mont’ Kiara. As stated previously, this debt was repaid after the
balance sheet date in January.
Cash flow
Year ended 31st December 2009 2010 Change
Figures in US$ (Restated)
Cash flows from operating activities 4,348 -15,433 -19,781
Net finance income -1,520 -260 1,260
Unrealised foreign exchange gain/(loss) -1,855 -618 1,237
Share of results from associate 607 -607
Depreciation and impairment 52 117 65
Net profit/(loss) before working capital changes 1,632 -16,194 -17,826
Movement in working capital -2,600 94,947 97,547
Cash generated from/(used in) operations -968 78,753 79,721
Interest and tax -12,938 -12,372 566
Net cash generated from/(used in) operations -13,906 66,381 80,287
Acquisition of subsidiaries, net of cash -7,630 -18 7,612
Acquisition of property, plant and equipment (net) -764 -3,556 -2,792
Purchase of available-for-let investments -4,200 4,200
Finance income/repayments net of advances/other 3,558 1,197 -2,361
Net cash flows from investing activities -9,036 -2,377 6,659
Repayment of borrowings -37,838 -44,763 -6,925
Drawdown of borrowings 49,063 72,590 23,527
Repayment of finance lease liabilities -40 40
Share buy back -6,007 6,007
Net cash flows from financing activities 5,178 27,827 22,649
Net increase/(decrease) in cash and cash equivalents -17,764 91,831 109,595
Cash and cash equivalents at beginning of period 62,856 46,996
Effect of changes in exchange rates 1,904 2,102
Cash and cash equivalents at end of period 46,996 140,929
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COMPANY UPDATE 3rd JUNE 2011
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DEVELOPMENT REVIEW
Aseana story extended through Q1 to
31st March 2011
A summary of the projects currently in planning or under construction are described below
with Malaysia and Vietnam covered in separate sections. As noted previously (see
Initiation Profile 6th
May 2010), in both countries the focus is on a relatively small number
of urban/city centre markets with high population densities needing a range of facilities,
residential, commercial, retail units and hospitality. This section takes the story and
extends it beyond 2010 through Q1 2011. Thus the table below and the pie charts
overleaf show the portfolio NAV and RNAV disaggregation as at the 31st March 2011.
Conservative NAV treatment Valuations are at cost, although the figures may be based on best estimates pending
account finalisation. Under accounting standards, the disclosure of NAV does not permit
upward revaluation of partially completed developments. However, Aseana also provides
an estimate of the current project valuation through the calculation of RNAV. These
values may be based on either discounted cash flow estimates, or estimates obtained
from residual/comparison method of land value methodology. For reasons of
conservatism, the RNAV figures shown in the right hand column of the table below take
into account an estimate of taxes that may be payable by the Manager.
Project NAV Project RNAV at
cost or market value market value
(US$m) (US$m)
Tiffani by i-ZEN, Kuala Lumpur, Malaysia Luxury condominiums 5.11 5.11
1 Mont’ Kiara by i-ZEN, Kuala Lumpur, Malaysia Office suites, office tower and retail mall 15.61 18.45
Sandakan Harbour Square, Sandakan, Sabah, Malaysia Retail lots, hotel and retail mall 29.82 35.31
SENI Mont’ Kiara, Kuala Lumpur, Malaysia Luxury condominiums 58.30 79.53
Kuala Lumpur Sentral Office Towers & Hotel, Kuala Lumpur, Malaysia Office towers and a business hotel 0.60 6.67
KLCC Kia Peng Residential Project, Kuala Lumpur, Malaysia Luxury residential tower 7.15 7.15
Aloft' Kuala Lumpur Sentral Hotel Business-class hotel 2.89 2.89
Kota Kinabalu seafront resort & residences, Kota Kinabalu, Sabah, Malaysia Resort homes, hotel and villas 13.16 17.39
Total Malaysia 132.64 172.50
Queen’s Place, Ho Chi Minh City, Vietnam Residential, offices and retail mall 0.97 0.97
Equity Investment in Nam Long Investment Corporation in HCMC, Vietnam Private equity investment 22.08 22.08
International Hi-Tech Healthcare Park, Ho Chi Minh City, Vietnam Healthcare themed comm./residential devel. 10.74 25.82
Tan Thuan Dong Project, Ho Chi Minh City, Vietnam Apartments and commercial development 3.61 3.61
Phuoc Long B Project 0.03 0.03
Total Vietnam 37.43 52.51
Total portfolio 170.07 225.01
Market values relate to Aseana's effective interest. They are prepared by international independent valuers using DCF methods and may also be calculated based on
the residual/comparison method of land valuation. The values are adjusted for taxes expected to ber paid by the Manager.
Aseana' Property portfolio and market valuation as at 31st March 2011
Project Type
US$55m (US¢25.90m per share)is the
minimum potential unrealised gain
Based on property alone, with cash and other assets and liabilities excluded, Malaysia
accounted for 78% of assets and Vietnam the balance. With cash and other assets net of
liabilities included, Malaysia’s share falls to 70% (US$132.4m out of US$190.4m). The
difference between the overall NAV of US$190.4m and RNAV of US$245.4m signifies a
potential estimated unrealised gain of US$55m or US¢25.90 per share) In fact, the gain
could easily exceed this by virtue of the fact that, in arriving at the RNAV figure, many of
the projects are valued at cost. As these projects are developed, there is a further
potential uplift in the valuations, though unable to be recognised under accounting rules.
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COMPANY UPDATE 3rd JUNE 2011
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The pie charts convey more readily the respective weights of the various projects. Where
market values are quoted, these have been supplied by independent valuers including
Crowe Horwath, CBRE, Colliers and Cheston International.
Total RNAV US$244.6m - constituents in US$m as at 31st March 2011
KK resort & residences,
17.4
Phuoc Long B Project ,
0.01 M ont' Kiara by i-ZEN,
18.5Tan Thuan Dong
Project , 3.6
Queen's Place, 1.0
International Hi-Tech
Healthcare Park , 25.8
Nam Long Equity
Investment , 22.1
KL Sentral o ffice
towers & hotel , 6.7
KL Sentra 'aloft' Hotel ,
2.9
KLCC Kia Peng
Residential , 7.2
SENI M ont Kiara , 79.5
Sandakan Harbour
Square , 35.3
Tiffani by i-ZEN , 5.1Cash/other assets less
liabilities , 20.4
Tiffani by i-ZEN , 5.1
1 Mont' Kiara by i-ZEN, 15.6
Sandakan Harbour Square , 29.8
SENI Mont' Kiara , 58.3
KK resort & residences, 13.2
KLCC Kia Peng Residential , 7.2
KL Sentra 'aloft' Hotel , 2.9
KL Sentral office towers & hotel , 0.6
Nam Long Equity Investment , 22.1
International Hi-Tech Healthcare Park , 10.7
Queen's Place, 1.0
Tan Thuan Dong Project , 3.6
Phuoc Long B Project , 0.0
Cash/other assets less liabilities , 20.4
Total NAV US$192.9m - constituents in US$m as at 31st March 2011
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COMPANY UPDATE 3rd JUNE 2011
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STRATEGY IN ACTION
Hurdle rates of 20% ROE in Malaysia and 30% in Vietnam…
Aseana’s initial investment criteria is to invest in projects which are calculated to achieve
above 20% and 30% ROE (these being the hurdle rates) for Malaysian and Vietnamese
projects respectively. The average period of time between acquiring a property asset end
selling it at a profit varies according to the type of property, the development or
construction phase and market conditions. Given protracted time periods for most
projects, and that market conditions may change over their life time, the Company may or
may not meet the minimum ROE required.
Excellent sales progress achieved The table below summarises sales progress achieved through to the end of April 2011
among the different projects. Significant progress has been made in selling the luxury
condominiums and apartments. The i-ZEN brand, developed by Ireka, Aseana’s
development manager, stands for quality in this market and also to prime location, key
factors in this success. Sales of the residential apartments in SENI Mont’ Kiara are also
picking up. Despite a softening in the Kuala Lumpur office market due to an over supply
situation developing, sales have been provisionally completed of both office towers at KL
Sentral.
Sales progress as at 30th April 2011
Project ^ % sold to date Fully sold expected
Tiffani by i-ZEN 95 Q4 2011
1 Mont' Kiara by i-ZEN
Office Suites 100
Office tower 100
Retail mall ( including car parks) 100
Sandakan Harbour Square
Phase 1 retail lots (61 units) 100
Phase 2 retail lots (68 units) # 93 Q4 2011
SENI Mont' Kiara ~ 68 Q4 2012
KL Sentral Office Towers and Hotel
Office Tower 1* 100
Office Tower 2* 100
Hotel > 100 2013
^ Malaysia projects only Those in Vietnam are later in construction.
* Conditional sales agreement; target completion Q4 2012.
# Accompanying hotel and mall to be held for two years before sale.
~ Conservatively assumed that it may take to end 2012 before fully sold.
> Hotel to be held for two years before sale.
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COMPANY UPDATE 3rd JUNE 2011
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DEVELOPMENT REVIEW 1. MALAYSIA
Market now favouring buyers as supply
replenished by completed developments
Residential
During 2010, the residential market saw the emergence of strong demand at the top end
of the market although prices remained generally stable over the year. On the supply
side, the number of new launches of high end condominiums was 31% down on 2009,
while upscale landed properties in good locations were sought by primary buyers
attracted to the prime areas of KLCC, Mont Kiara and Bangsar. The potential emergence
of a property bubble led the Central Bank to take action, raising interest rates and
requiring a 70% LTV on loan applications which helped to calm the market, already
softening due to several key developments coming onstream. As a result, a ‘buyers
market’ developed in certain areas producing more competition among developers
offering various incentive schemes to attract would-be purchasers.
‘Soft’ office market temporarily
oversupplied…
Offices
The Kuala Lumpur commercial office market softened during 2010, mainly due to two
factors, first, growth in supply over the past three years and, secondly, business concerns
about the economy which, although showing a strong recovery in 2010, may slow in the
current year. We review later the main drivers of Malaysian economic growth in the
medium to longer term. In the near term, while the take up of new office space has been
slow outside the prime areas, buyers have come in for completed office units with some
achieving gains of between 20% and 40% on their investment.
…while the retail environment is
attracting developers
Retail
Apart from the general commercial sectors, retail developments were also favourable in
2010 on three counts, consumer income growth and low unemployment, buoyant tourist
activity and the entry of new branded retailers. In this generally benign environment, a
good take up of new leases has been seen, particularly in the prime areas. Aseana’s 1
Mont’ Kiara mall has had a good start in attracting retailers both local and regional.
1 Mont' Kiara, Kuala Lumpur (50% owned)
Sale of whole complex in November
2010, but profits yet to be finalised
This mixed project, a joint venture with CapitaLand who own
the other 50%, started in November 2006. The project,
comprising a 20-storey office tower, a 5-storey retail
complex and a 34-storey office suite block with 186 units,
was completed in November 2010.
The office tower and retail mall were sold to the ARA Asia
Dragon Fund for US$103.7m while sales of the office suites
to individual buyers added a further US$62m. Final
distribution of profits between the Aseana and CapitaLand
will be determined when the accounts are finalised by Q3
2011.
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COMPANY UPDATE 3rd JUNE 2011
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Kuala Lumpur Sentral (40% owned)
Office towers sold but hotel, to be
managed by Starwood, retained
Originally purchased in August 2007, the two office
towers and a 482 room business class hotel came
under the control of a joint venture with Malaysian
Resources Corporation Berhad (MRCB), the latter
taking a 60% interest. The office towers have been
conditionally sold to an international real estate fund
for US$194m and completion is expected in 2012
Q4. Aseana acquired the hotel, which is in close
proximity to the city centre with excellent transport
links from this prime hub, from Excellent Bonanza
Sdn Bhd for a consideration of 112.5% of its
development cost, expected to be US$66m. A
deposit has been paid and the balance will be due
on completion in 2012 Q4. The hotel is expected to
open for business in 2013.
A valuation has not been given as APSL is in negotiations with Starwood Asia Pacific
Hotel and Resorts Pte. Ltd. to manage it under their ‘Aloft’ brand. The hotel NAV is
carried at a cost of US$2.89m.
Sandakan Harbour Square, Sabah (wholly owned)
This four-phase, mixed-use (low-rise
office, retail and hotel) development has
an estimated gross development value
(GDV) on completion of US$170m. In
Aseana’s Q1 2011 Update, the project
NAV is US$29.8m and market value
US$35.3m. The first two phases
comprise a total of 129 retail units.
Phase 1 was fully sold earlier and 93%
of Phase 2 to date.
Phases 3 and 4 are a retail mall and
hotel development respectively, the latter to be managed by Starwood Hotels under the
‘Four Points by Sheraton’ brand. Both phases 3 and 4 are due for completion by
December 2011 with business commencement expected in 2012. While leasing of the
retail space is already going ahead, Aseana state it will hold the mall and hotel for about
two years, allowing value to grow, before selling them on.
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COMPANY UPDATE 3rd JUNE 2011
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Kota Kinabalu, Seafront resort & residences
Aseana paid US$10.35m in August
2009 to buy 79.5 acres of sea front land
on which to build resort homes on an
80:20 joint venture basis with Global
Evergreen Sdn Bhd. The Company
obtained development approvals for Lot
1(a) - boutique resort hotel and Lot 1(b)
– resort villas. The Board has decided to
delay the commencement of this project
until the resort home market recovers.
Tiffani by i-ZEN, Kuala Lumpur (100% owned)
Luxury apartments now 95% sold
This is a luxury condominium development with 399
apartments in two towers. It is marketed under the i-Zen
name, the upmarket property brand created by Ireka. The
towers were completed and handed over in August 2009,
and only 20 apartments (5%) remain to be sold. The
project NAV was stated as US$5.1m in the Q1 2011
valuation, this figure representing the inventory at cost of
the remaining unsold apartment units.
KLCC Kia Peng Residential Project, Kuala Lumpur City Centre (70% owned)
Construction of new residential tower
on plan for 2011 H2
Acquired in April 2010, this 43,559 sq. ft. plot is in the
heart of Kuala Lumpur on Jalan Kia Peng, in close
proximity to the KLCC Convention Centre, KLCC Park and
the Petronas Towers. Aseana is to build an upmarket
residential tower which, subject to completion and
obtaining the necessary approvals, is expected to start in
2011 H2.
The project NAV was US$7.2m at the end of Q1 2011, but
further medium term debt financing will be required once
building commences. The GDV of the development is
estimated of US$90m with completion in 2015. Aseana’s
joint venture partner in this development is Ireka
Corporation Berhad.
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COMPANY UPDATE 3rd JUNE 2011
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SENI Mont' Kiara, Kuala Lumpur (wholly owned)
This is a 605-unit upmarket
condominium development
located in Mont’ Kiara on 8.83
acres. Two 46-storey tower
blocks and two 16-storey low
rise blocks are being built, with
a total saleable area of over
1.9m sq. m. Development is in
two phases: Phase 1 was
physically completed in
February 2011 and home buyers will take possession from April. Phase 2 is scheduled for
completion in September 2011.To date, 68% of units have been sold with marketing
extended to other parts of the world. The project NAV as at the end of Q1 2011 was
US$58.3m, with realisable value of US$79.5m. The expected GDV is US$490m.
DEVELOPMENT REVIEW 2. VIETNAM
Accelerating inflation has triggered
tighter official monetary measures…
The economy is recovering slowly from the downturn with a growth rate of 6.8% in 2010
with most sectors enjoying an upturn. However, inflation was running at 12% in 2010 (the
year-on-year rate to May 2011 has accelerated to nearly 20%) mainly due to international
commodity including energy prices. Conditions in the real estate market were, and are,
being affected by government and central bank action to curb the inflationary trend, now
the top priority.
…with borrowing rates now above 20% The prime interest rate was raised from 8% to 9% in November and action also taken to
increase capital ratios among financial institutions. The government now wants the
commercial banks to restrict credit and loan growth to less than 20% year-on-year. The
Central Bank increased the key repurchase interest rate from 7% to 8% in November but
then more sharply in May. It was lifted first to 12% and then, within a few days, to 15% on
the 17th
May, a rise of 800 bps since November. For borrowers from the state-owned
banks, rates charged are now 20%-23% and, from non state-owned banks, in the range
23% - 27%.
…while the DONG has been devalued
twice so far in 2011
Aseana’s results were also affected by the central bank devaluing the Vietnam currency,
the Dong, twice during 2010 and twice again in 2011, in February and May. The rate
Aseana used at the year end 2010 for valuation purposes was US$1 = VND 19487.70
compared with US$1 = VND 18,477 on the 31st December 2009, indicating an
approximate 5% depreciation over the course of 2010. In fact, the Dong devaluations are
largely immaterial for Aseana, both in terms of the balance sheet (capital outlays for
projects are still small being in their infancy) and the Income Statement (none of the
projects has begun operations yet).
Developments within ASPL’s Vietnam property portfolio comprised all these sub-sectors
of the market and we first review the trends affecting each during 2010 and into Q1.
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COMPANY UPDATE 3rd JUNE 2011
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2010 recovery especially at the lower
end of the market…
…but tighter monetary conditions may
cast a damper
Residential
The market showed some recovery in the key areas of demand, particularly Ho Chi Min
City (HCMC), where average prices for new apartments increased by 10% year-on-year .
Good demand was also experienced in suburbs of the city. The lower end of the market,
comprising affordable properties are attractive to a major proportion of the 9m Vietnam
population, and this market segment experienced the strongest demand. This sector
could weaken temporarily as a result of the challenging conditions in the economy,
particularly the effect of reduced credit availability and higher interest rates.
25% new space in 2010 in HCMC…
…affecting occupancy rates…
…and putting downward pressure on
rents
Offices
The general background to the commercial office sector is that, despite the economic
recovery, substantial new space has come on the market, now totalling over 1.05m sq. m.
in HCMC at the end of 2010. During the year, a further 208,000 sq. m., or 25%, was
added, including the 68 storey Bitexco Financial Tower. These developments have had
two effects: First, downward pressure on rents and, secondly, an appreciable impact on
average occupancy rates. In HCMC, for Grade A office space, the decline was from 83%
in 2009 Q4 to 68% in 2010. However, given that foreign banks and multinationals will
continue to be attracted to the City’s grade A space, occupancy should again increase in
due course. For Grades B and C, where fewer new developments have come to fruition,
average occupancy rates were still above 80% in HCMC in 2010 Q4 and this may
represent a sustainable level.
Sector buoyant with prime, well located
space at a premium
Retail
This sub-sector has been buoyant in HCMC with rental growth of 11% year-on-year
reaching an average of US$74 per sq. m. while occupancy rates attained 90%. The
demand/supply balance is tilted because of the scarcity of prime locations restricting the
development of large shopping malls, particularly in the central part of the city. In addition,
the availability of relatively small plot sizes is unsuitable for certain types of retail unit
requiring sizable floor plates.
Queen’s Place, Ho Chi Minh City (65% owned)
This mixed use development will
consist of two residential towers, a
strata office tower and a retail mall with
a total area of close to 1m sq ft. It is a
65/35 joint venture with local developer
Binh Duong Corporation, with Aseana
expecting to invest US$11.3m the
project. The site is currently a social
housing area and resettlement
planning now underway is expected to
take eighteen months before
construction can start with completion
not before 2017.
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COMPANY UPDATE 3rd JUNE 2011
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The Q1 2011 project NAV for Queen’s Place was just short of US$1m and the expected
GDV has been reduced from US$195m to US$115m following a review of the
projections and feasibility studies to take into account the current market
environment in Vietnam.
International Hi-Tech Healthcare Park, Ho Chi Minh City (51% owned)
Mixed new build health care
project…
This mixed development of 93 acres comprises upmarket hospital, private residential and
mixed used commercial offices, retail units and hospitality. The project will be developed
in five phases over an estimated nine years.
…will be developed in phases with hospital completion in 2012
The first phase, a 250 bed private general hospital commenced construction in May 2010.
It will be managed by Parkway Health, Asia’s largest private healthcare group. Completion
of the hospital is expected in 2012 with business commencement in 2013. Building work
on the residential apartments is scheduled to begin in 2011 Q4. While Aseana will
develop the residential units on its own, the Company is negotiating with several strategic
investors with the aim of participating in the overall development of the park which has an
estimated GDV now of US$670m. The project NAV at Q1 2011 was US$10.7m with
market value of US$25.8m.
Nam Long Investment Corporation (16.4% owned)
Nam Long is a co-investment partner…
Aseana acquired a strategic minority stake in Nam Long in July 2007 for US$17.2m. The
Company is a private Vietnamese developer and a leading player in the Ho Chi Minh City
property market, specialising in affordable housing known as ‘E’ homes. These were a
main driver of its 2010 revenues. It also has an extensive land bank of over 1,200 acres in
and around HCMC while it is also engaged in a new development in Long An Province.
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COMPANY UPDATE 3rd JUNE 2011
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…to develop at least three projects
Mekong Capital, a private equity fund, has also taken a stake in Nam Long, diluting
ASPL’s stake to 16.4%. Aseana has signed an exclusive agreement to co-develop at least
three projects with Nam Long in Ho Chi Minh City, the first being the Tan Thuan Dong
project to which has recently been added the Phuoc Long B residential project.
Tan Thuan Dong, Ho Chi Minh City, Vietnam (80.0% owned)
…the first awaiting planning approval
with construction to start in 2011 Q4
This development is an up market
residential project in HCMC comprising
two towers with supporting commercial
and retail facilities totalling c.66,000 sq.
m. It has an expected GDV of US$91m.
Development planning is advanced and
approval from the authorities expected
in Q3 2011 after which construction can
start. Aseana signed an agreement in
November 2009 under which it will take
an 80% stake in this development for
US$9.6m. The Q1 2011 NAV was
US$3.6m. A conditional agreement to
sell a 39.2% stake in this development to PRUPIM Vietnam Property Fund was ended
due to delays in receiving approval from the relevant authoriites.
Phuoc Long B Project
…and another agreement has recently been signed for the second
A conditional agreement with Nam Long was signed in May 2011 for the development of a
residential project of 37 villas and c.460 apartment units. Site preparation work has
commenced; sales launch and construction should start late this year with completion in
2014. The project NAV at the end of March 2011 was US$0.03m.
ECONOMIC UPDATE 1. Malaysia
Slower growth expected in 2011… The backdrop to the real estate market is mixed. The GDP growth rate is expected to fall
back to 5.2% in 2011 after the 7.2% achieved last year. Sustained employment has been
accompanied by higher inflation, mainly imported due to rising oil and other commodity
prices. To counter this, Bank Negara Malaysia, the Central Bank, in association with the
Monetary Policy Committee, increased interest rates three times by a total of 75 bps pts
to 2.75%, but does not want to cause a setback to the economy which would run counter
to government’s objectives as set out in the Tenth Economic Plan, 2011-15.
…albeit with further monetary tightening
to combat a rise in inflation
That said, further monetary tightening has been required. With inflation continuing to rise,
to 3.2% in April 2011, the Central Bank has raised the key interest rate a further 25 bps to
3.0%. At the same time, the GDP growth rate is slowing, 4.6% in Q1, substantially lower
than the 10.1% in the same quarter of 2010 and also below the 4.8% achieved in Q4.
These fluctuations show considerable seasonal variation although the Central Bank, in
announcing the latest figure, indicated that the slower growth rate was largely attributable
to a weak performance in the manufacturing sector.
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…but Government aims to stimulate the
economy via the services sector
For the longer term, The TEP incorporates an Economic Transformation Programme
(ETP) aiming to create a high value added, high income economy, in which the services
sector will be the key driver, contributing over 61% of GDP by 2015 (2010 58%). The
government’s annual growth target for GDP is 6%, but the key aim of the ETP is to raise
income per head from US$6,700 to US$15,000 in nine years. In fact, this would require a
compound annual growth rate in excess of 9%.
the ETP should be beneficial to the
property sector…
As part of the ETP, the government is using private sector investment projects in the
transport and infrastructure fields to act as catalysts to stimulate activity, attract investors
particularly from overseas and to encourage multinationals to set up in the country.
Projects such as the extension of rail transport links from the capital to other cities and
suburban areas will benefit the property sector. On another level, there are regulation,
licensing and tax measures to stimulate the property sector, including:
1. Individuals and corporations pay no capital gains tax if assets are held for over five
years;
2. Property transactions below RM20m now require no Foreign Investment Committee
(FIC ) approval;
3. Purchasers can obtain loans with 95% LTV repayable over 40 years, a significant
relaxation on normal rules.
…despite a potential over-supply of
office space emerging
While these measures are beneficial, on the commercial side, there has been a potential
over-supply of office space during the last three years with a further 13m sq. ft. in the
pipeline between 2011 and 2013. The majority of this is scheduled for completion in 2012.
The consequences of this have been threefold:
1. some planned developments have been deferred;
2. occupancy rates in Kuala Lumpur offices have slipped;
3. rents are facing some downward pressure.
ECONOMIC REVIEW 2. Vietnam
Economy affected by surging inflation
inflation …
Vietnam is a less advanced and generally poorer economy than Malaysia though with
good potential for growth in the longer term. The country had an estimated per capita
income of US$1,200 in 2010 against Malaysia’s per capita income of US$6,700. Based
on the government’s development plans, the figure could rise to US$1,300 in 2011. The
attractions for Aseana’s real estate activity are the capital, HCMC, and two other cities,
Hanoi and Hai Phong, which alone have urban area populations exceeding one million.
Vietnam’s GDP growth rate in 2010 was 6.8%, marginally exceeding the government’s
targeted 6.5%. The planned rate for 2011 was originally set at 7.0% - 7.5% but was
reduced to 6.5% in May as a result of the perceived problems in coping with surging
inflation. The economy’s high inflation rate of 11.75% in 2010 has accelerated to nearly
20% year-on-year in May 2011.
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…and a devalued currency Combined with a substantial trade deficit, inflation resulted in successive devaluations of
the Dong as previously mentioned. International investor confidence has also suffered as
a result of a dollar bond default by a state-owned enterprise. While the Central Bank kept
the key open market (repurchase) rate at 7% through most of 2010 in order not to
jeopardise the progress of the wider economy, it has been compelled to raise it
substantially during the current year, and enforce cutbacks on bank lending and credit
growth to 20% for 2011.
Bank lending to property sector
reduced…
To keep lending growth within that level, banks have to gradually reduce loans to the non-
manufacturing sector from more than 26.8 per cent to 22 per cent by June and 16 per
cent by year-end. It is reported that many banks have already changed their lending
strategies, especially on property loans, to ensure that they remain within the limit. This
combined with higher borrowing rates - borrowers must now pay in excess of 20% for
loans – is likely to cause a setback in the property sector in 2011.
…but other measures will help in the
longer term
While this counter-inflationary stance has negative implications for the property sector,
other measures may be more useful in the medium and longer terms. Investment in the
property sector has been encouraged via regulation, including allowing foreigners to
purchase land and property and, on the banking side, through some relaxation in the
terms of lending to private individuals, such as lending at LTV levels of 70% and on
longer 15 year repayment terms.
Foreign direct investment (FDI) is also
important but slowing
Vietnam has benefited from a substantial amount of foreign direct investment (FDI), with
actual disbursements totalling US$11bn. FDI tends to require both commercial office
space as well as residential development which is important for the property sector. For
2011 the government has set a target of US$20bn with US$11.0m – US$ 11.5m expected
to be disbursed, and hopes also to raise its quality. That means targeting key areas,
branches, sectors and regions, while focusing on infrastructure and technology, helpful
indirectly to the progress of the broader economy. A shortfall for the first five months,
which has so far brought in US$4.7bn, 23% of the target, suggests that the government
may be too optimistic.
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COMPANY UPDATE 3rd JUNE 2011
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SUMMARY AND CONCLUSIONS
The investment case for Aseana rests on the following:
Attractive growing economies… Target investments are primarily high end developments in the commercial, residential
and hospitality sectors of the principal cities of Malaysia and Vietnam. Both countries
have sound potential economic attractions in the longer term – rising living standards,
urbanisation, supportive governments encouraging growth and high levels of FDI.
…well exploited by the Development
Manager
The real estate opportunities are well exploited by Aseana’s experienced,
knowledgeable hands-on Development Manager, part of Ireka Corporation Berhad.
Ireka has a proven track record in property development and investment, and
established relationships throughout south east Asia.
Significant unrealised value gains On Q1 2011 valuations, the unaudited NAV was US$190.4m and on a per share basis
US¢89.6. The estimated unaudited realisable RNAV was US$245.4, US¢115.5 per
share, indicating a total potential gain of US$55m. That amounts to US¢25.9.
…particularly in Malaysia The largest potential gains may be measured by taking the project RNAV, as a guide
to market value, and relating it to the NAV or cost, whichever applies. Based on this
approach, the highest mark-ups were shown by the KL Sentral office towers and
hotel, SENI Mont’ Kiara and, in Vietnam, the International Hi-Tech Healthcare Park.
…now accounting for 78% of the
portfolio
Excluding cash and other assets and liabilities, the portfolio NAV stood at
US$170.07m (US¢80.02 per share) with a split of 78% Malayasia, 22% Vietnam.
There are currently 6 ‘active’ projects in Malaysia and 4 in Vietnam. Current anti-
inflation measures being taken by the Vietnam government and Central Bank could
slow the growth of the property sector in the short term.
Sound moderately geared balance
sheet
Operationally and financially, the Company is in good shape with low gearing and no
pressing financial commitments although another MTN package will be assembled to
finance the pipeline of existing projects. It is not envisaged that Aseana will
undertake more projects in the near term, the focus being on the completion and sale
of existing works, though it has headroom for further investments.
Sales revenues will rise through 2011 Progress on the sales of both residential and commercial properties in Malaysia
should continue through the year. Sales revenues in 2011 will be generated by units
in SENI Mont’ Kiara and the Phase 2 retail lots of the Sandakan Harbour project.
Broker estimates a cash return to
shareholders of US¢135 in 2015
The house broker, Panmure Gordon, expects an acceleration of progress after 2012,
with rising gross margins and returns to shareholders. It forecasts a cash return of
US¢135 in 2015 when Aseana, reaching the end of its seven year life, sells off all
projects except Queen’s Place (expected completion 2017). Some return of capital
may be contemplated by management before 2015.
…equating to a present discounted
value of US¢92
At US¢135, the discounted present value equates to US¢92.0, a premium to the
current market price (US¢51.5) of 79%. On a worst case scenario, with all projects in
Vietnam either shelved or cancelled, the broker estimates Aseana would still be
worth US¢85 per share, a 65% premium to the current level.
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COMPANY UPDATE 3rd JUNE 2011
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COMPANY HISTORY & OVERVIEW
Main market listing in April 2007
Aseana Properties Limited (‘ASPL’)
was incorporated in Jersey in early
2007 to invest in property
development projects in Malaysia
and Vietnam. It was listed on the
Main Market of the London Stock
Exchange in April 2007, having
raised US$152.3 million (net) via a
placing of 162 million shares at
US$1 per share.
Target properties are residential,
commercial and hospitality
Aseana’s business model is to
acquire, develop and redevelop
upscale residential, commercial
and hospitality projects, usually at
the pre-construction stage. It will
also selectively invest in projects
under construction and completed
projects. It invests both as the sole
principal and, where appropriate, in
joint arrangements with third
parties with relevant experience or
local knowledge, usually retaining
management control.
Manager is part of Malaysian listed Ireka
Group
Ireka Development Management Sdn Bhd (IDM), which has day-to-day management
responsibility, is a wholly-owned subsidiary of Ireka Corporation Berhad (ICB), a
company listed on the Bursa Malaysia (formerly the Kuala Lumpur Stock Exchange)
since 1993 and which has over 40 years of construction and property development
experience. ICB acquired 48.9 million shares or 19.56% in Aseana in exchange for the
Company’s first five properties at listing. This stake was subsequently increased to
23.02% following the cancellation of shares.
Management fee 2% of NAV
...plus performance fee, yet to be paid
In addition to managing the property portfolio, IDM has responsibility for the introduction
and facilitation of new investment opportunities, and it may also be a co-investor with
Aseana on certain projects, such as KLCC Kia Peng. For these activities, It receives (i)
a quarterly management fee in advance equivalent to 2% pa of Aseana’s NAV, and (ii)
a performance fee equivalent to 20% of the extent to which the NAV per share exceeds
a benchmark. If the relevant NAV per share does not increase from one period to
another, no performance fee is paid, which has been the case since Aseana’s IPO.
Initial seven year fund life Aseana was set up with an initial life span of seven years, though it can be continued
on a vote by shareholders, the first occasion for which will occur at the AGM in 2015.
Given the protracted development time of some projects, it is essential for the fund to
continue.
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COMPANY UPDATE 3rd JUNE 2011
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DIRECTORS ASEANA PROPERTIES
NON-EXECUTIVE CHAIRMAN Mohammed Azlan bin Hashim 1 2
Azlan was appointed NEC in March 2007. He is also Chairman of Westcomb Financial Group Limited
and Asiasons Capital Limited, and a director of Parkway Holdings Limited which are public listed
companies on the Singapore Exchange. In Malaysia, he is Chairman of several public listed entities,
listed on Bursa Malaysia, including D&O Ventures Berhad and SILK Holdings Berhad. He has served
as Chief Executive of Bumiputra Merchant Bankers Berhad, Group Managing Director of Amanah
Capital Malaysia Berhad and Executive Chairman of Bursa Malaysia Berhad Group.
NON-EXECUTIVE DIRECTOR Christopher Henry Lovell 1
Mr Lovell is lawyer who has practised in Jersey since 1979. He was a partner in Theodore Goddard
between 1983 and 1993 before setting up his own legal practice in Jersey. In 2000 he was one of the
founding principals of Channel House Trustees Limited, a Jersey regulated trust company, which
was acquired by Capita Group plc in 2005, when he became a director of Capita’s Jersey regulated
trust company. He joined Governance Partners LP, an independent corporate governance practice,
on his retirement from Capita in January 2010. His other current NED positions include Treveria Plc,
NR Nordic & Russia Properties Limited and Public Service Properties Investments Limited
NON-EXECUTIVE DIRECTOR David Harris 2 3
Mr Harris is currently Chief Executive of InvaTrust Consultancy Ltd, a company that specialises in the
provision of investment marketing services to the Financial Services Industry in both the UK and
Europe. He was formerly Managing Director of Chantrey Financial Management Ltd, a successful
investment and fund management company linked to Chartered Accountants, Chantrey Vellacott.
From 1995 to 2000 he was Director of the Association of Investment Companies overseeing
marketing and technical training. He is currently a non-executive director of a number of quoted
companies in the UK including Character Group plc, COBRA Holdings plc, Small Companies
Dividend Trust plc, F&C Managed Portfolio Trust plc and Manchester & London Investment Trust plc.
NON-EXECUTIVE DIRECTOR Ismail Shahudin 1 3
Ismail was appointed to the Board of Aseana in March 2007. He is chairman of SMPC Corporation
Berhad and also serves as Independent Non-Executive board member of several Malaysia public
listed entities, among others, Malayan Banking Berhad which is Malaysia’s largest bank, Plus
Express Berhad, Mutiara Goodyear Development Berhad, EP Manufacturing Berhad, and UEM
Group Berhad, is a non-listed wholly owned subsidiary of Khazanah Nasional Berhad, one of the
Malaysia government’s investment arms.
NON-EXECUTIVE DIRECTOR John Lynton Jones 2 3
John is chairman of Bourse Consult, a consultancy that advises clients on initiatives relating to
exchange trading, regulation, clearing and settlement. He has an extensive background as a chief
executive of several exchanges in London, including the International Petroleum Exchange, the OM
London Exchange, and Nasdaq International (whose operations he set up in Europe in the late
1980s). John serves on the panel of City experts created by the Corporation of the City of London,
was the founding chairman of the Dubai International Financial Exchange from 2003 until 2006, and
is on the board of Kenetics Group Limited, an AIM-listed company.
NON-EXECUTIVE DIRECTOR Gerald Ong Chong Keng
Gerald is the CEO of Singapore based PrimePartners Corporate Finance Group and has over 20
years of corporate finance related experience at various financial institutions providing a wide variety
of services such as advisory, M&A activities and fund raising exercises. He has been the Chairman
of the Singapore Investment Banks Association Corporate Finance Committee since 2007.
1 – Audit Committee 2 – Nomination Committee 3 – Remuneration Committee
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COMPANY UPDATE 3rd JUNE 2011
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MANAGEMENT TEAM IREKA DEVELOPMENT MANAGEMENT
CHIEF EXECUTIVE OFFICER Lai Voon Hon
He is the CEO of IDM and Executive Director of Ireka Corporation which he joined in 1994 as the
Group General Manager. He was appointed to the Board of Directors in 1996 and is also a Director
of several subsidiaries within the Ireka Group. An architect by profession, he has practiced in
London, Hong Kong and Malaysia prior to joining Ireka. He is a registered Professional Architect with
the Board of Architects, Malaysia.
CHIEF FINANCIAL OFFICER Monica Lai Voon Huey
She is the CFO of IDM and Executive Director of Ireka Corporation which she joined as the Group
Financial Controller in 1993. She was appointed to the Board of Directors in 1999 and is also a
Director of several subsidiaries within the Ireka Group. She worked for Ernst & Young in England and
KPMG in Hong Kong prior to joining Ireka. She is a fellow member of several institutes that include
the Institute of Chartered Accountants, England and Wales; Chartered Accountants, Malaysia; and
the Malaysian Institute of Taxation.
CHIEF INVESTMENT OFFICER Chan Chee Kian
He is the CIO of IDM. He was previously a management and strategy consultant with Accenture in
Singapore, Bangkok and Kuala Lumpur where he advised a broad range of clients including large
multi-national companies, Government-linked agencies and local enterprises throughout the Asia
Pacific region on strategic and operational issues. He graduated from the University of Bristol in
England with First Class Honours in Civil Engineering.
CHIEF OPERATING OFFICER Lim Ech Chan
He is the COO of IDM and previously worked as the Assistant Director of Planning for City Hall of
Kuala Lumpur, as a general manager of a publicly listed property development company, and as a
Director of GDP Planners, a premier architectural firm in Kuala Lumpur. He is a registered
Professional Town Planner in Malaysia and a member of the Royal Town Planning Institute, London.
ASEANA PROPERTIES www.aseanaproperties.com
COMPANY UPDATE 3rd JUNE 2011
23
ASEANA INFORMATION
Registered 12 Castle Street
Address St Helier
Jersey JE2 3RT
Channel Islands
Website www.aseanaproperties.com
IDM INFORMATION
Head office Level 18, Wisma Mont’ Kiara
No 1 Jalan Kiara, Mont’ Kiara
50480 Kuala Lumpur
Malaysia
Telephone +603 6411 6388
LEADING SHAREHOLDERS
As at 16th March 2011 %
Ireka Corporation Berhad 23.02
Legacy Essence Limited 18.39
Henderson New Star 12.35
European Clearing 12.31
Standard Life Investments 7.06
Dr Thong Kok Cheong 4.99
Funds managed by Cayenne Asset Mgt 4.51
City Insights contacts: Chris Munden [email protected]
Tony Cooper [email protected] City Insights Limited 131 Finsbury Pavement, London EC2A 1NT Tel: 44 (0) 20 7920 3190
Fax: 44 (0) 20 7920 3151
Income Statement
Year ended 31st December 2008 2009 2010
Figures in US$000
Revenue 38,369 115,256 179,345
Cost of sales -36,112 -100,746 -177,184
Gross profit/(loss) 2,258 14,510 2,161
Other income 82 248 679
Administrative expenses -1,382 -1,064 -1,017
Foreign exchange (loss)/gain -10,171 1,827 -670
Management fees -4,744 -4,196 -3,994
Other operating expenses -15,671 -7,890 -2,816
Operating profit/(loss) -29,628 3,435 -15,693
Investment income 4,534 2,115 794
Finance costs -357 -595 -534
Impairment of investment in associate -1,957 0 0
Share of results of associated company -4 -607 0
Profit/(loss) before tax -27,412 4,348 -15,433
Tax -1,143 -3,635 -5,795
Profit/(loss) after tax -28,555 713 -21,228
Balance Sheet
Year ended 31st December 2008 2009 2010
Figures in US$000
Property, plant and equipment 348 1,070 4,497
Available-for-sale investments 13,024 17,224 22,052
Intangible assets 10,694 17,174 17,174
Land held for property development 17,419
Others 12,760 7,167 19,400
Non-current assets 54,243 42,635 63,123
Inventories 0 399,040 431,473
Property development costs 322,291
Trade and other receivables 16,939 24,392 31,499
Amount due from associate 0 785 382
Cash and cash equivalents 67,252 61,957 150,385
Current assets 406,482 486,174 613,739
Total assets 460,726 528,809 676,862
Trade and other payables -143,626 -84,504 -112,940
Bank loans and borrowings -3,063 -36,976 -68,463
Medium term notes
-72,923
Current tax liabilities/deferred revenue -1,926 -112,120 -201,099
Current liabilities -148,614 -233,600 -455,425
Bank term loans -45,801 -20,147 -21,176
Long term loans -47,326 0
Medium term notes 0 -62,737
Amount due to non-controlling interest -2,892 -2,887 -3,048
Non-current liabilities -96,019 -85,771 -24,224
Total liabilities -244,633 -319,371 -479,649
Net assets 216,093 209,438 197,213
Cash Flow
Year ended 31st December 2008 2009 2010
Figures in US$000
Net cash flows (used in)/from op. activities -45,713 -13,906 66,381
Acquisition of subsidiaries, net of cash -4,832 -7,630 -18
Fixed assets acquired net of disposals -1,382 -764 -3,556
Purchase of available-for-let investments -13,024 -4,200
Fin. income/advances/repayments/other 57 3,558 1,197
Net cash flows from investing activities -19,180 -9,036 -2,377
Repayment of borrowings -14,065 -37,838 -44,763
Drawdown of borrowings 32,093 49,063 72,590
Repayment of finance lease liabilities -26 -40
Share buy back 0 -6,007
Net cash flows from financing activities 18,002 5,178 27,827
Cash and cash equivalents at beginning of period 120,121 62,856 46,996
Effect of changes in exchange rates -10,375 1,904 2,102
Net increase/(decrease) in cash and cash equivalents -46,890 -17,764 91,831
Cash and cash equivalents at end of period 62,856 46,996 140,929
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This document is not an offer to buy or sell, or a solicitation of an offer to buy or sell, the securities mentioned. Any recommendations referred to do not necessarily imply the suitability of particular securities for individual situations. The value of securities and the income from them may fluctuate. It should be remembered that past performance is not
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