PJDev: 4Q2015 Poor Poor Quarter

PJ Dev just announced its latest quarter report last week. I think its result disappointed many of us. And shock as well. 

There was a one-off gain of asset disposal at corresponding quarter last year. I just deducted it out at operating level and net profit level for comparison. So, probably would be slight difference in reality.

The group managed to record RM5.7 million net profit, poorest in 2 years.

Both revenue and operating profit margin also dropped.

Even worst is there was RM7.8 million loss in joint venture this quarter.

Net borrowings increased to RM362 million from RM135 million one year earlier. Net gearing ratio is around 0.3 which I think is still in comfortable horizon for a group whose main focus is in property development. Interest expenses increased two-fold from previous financial year. 

Cash flow without doubt was negative due to significant outflow for the increases in land held and property development costs probably for Yarra Park City project that caused the group to take up massive borrowings. 

Segment reporting provides some clues on the drops in performance. Found out that the group's account statement changed quite much after audited. Q4FY14 result released last year was quite different from the pass year result shown in Q4FY15.

Poor performance from the properties segment was due to delay in launching Cheras You City and Genting Windmill Upon Hills projects. But the group did mention that the take up rate in the respective Genting project was quite good after launched as well as voiced out concern regarding the slow down in the overall property market. 

Both cable and building material divisions recorded lower revenue and even worst was the hotel segment continued its loss from last quarter. 

Construction segment was the only bright spot. 

The group's prospect mentioned in the report doesn't sound quite good too. 

In another event, there was a statement stated that OSK Holding is deemed to have the control of the company even through OSKH has less than 50% of the voting right. But, the parent company probably will have more than 50% equity interest by the closing date. 

All in all, I probably will dispose my holdings in the group after some consideration. I think the share price will getting hard to reflect its high asset value after the acquisition/transfer end. It's such a waste as I owned it for a while and there was opportunity cost involved.

PJDev: Another plan in the making?

For the past one two weeks, I guess everyone who pay attention to PJDev's announcement in Bursa website probably has no difficulty to note that OSK Holdings Berhad had keep on acquiring PJDev shares through open market. 

From the first transfer of shares on 23-July, Tan Sri Ong Keong Huat had acquired PJDev shares through open market almost non-stop until today. 

The transacted price was around RM1.55, slightly lower than the offer price. 

Up to date, the number of shares acquired by OSK Holdings Berhad through open market is 31.46 million shares. 

His ownership in PJDev now is around 38.52% from 31.59%.

With average transacted price of RM1.55, total purchasing cost is RM48.76 million. 

So, what is his plan? 

To make it as OSK Holdings's subsidiary instead of investment in associate? 

In order to have at least 50.01%, OSK Holdings need 11.49% ownership more. 

That's equivalent to around RM80.77 million more. 

But do not forget PJDev at the latest quarter had RM150million cash on hands, RM253million property development costs and RM557million of land held for property development as well as RM600 million unbilled sales in hands. 

Though they have around RM520 million in borrowings. 

So, another good asset being steal away? 

Can offer better price or not? 

Or investors should directly buy OSK Holdings?

Interesting .. 

Let's see what is the outcome when the mandatory takeover offer end in few weeks time. 

PJDev: Email Enquiry to IR (29/6)

Just received the reply from PJDev's IR team regarding my enquiries to them earlier. 


First of all, thanks for the great effort for making PJDev group a great company.

I am one of the retail investors who are investing in PJDev group and I have some enquiries related to the group and would like to seek clarification from your side as below,

1) How much is the property development unbill sales at the last quarter as the group didn't mention in the latest quarter report?

Answer: In the ranges of 600Million as at March 2015

2) The hotel segment recorded operating losses in the last quarter. What is the reason behind? Is it one time off or the group facing challenge moving forward?

Answer: Mainly due to slow down of  tourism  industry. We foresee that the Hotel Industry will continue be quite soft for the 2nd half of this year.

3) Based on the annual report, D'Majestic and Swiss-Inn are expected to open in 2Q2015. May I know what is the progress?Answer: Both will be opened in July of August 2015.

4) The group's tax rate in the latest quarter was slightly higher due to losses in certain subsidiaries that are not available to set off against taxable profit as mentioned in the report. Is the higher tax rate one time off or will it continue moving forward?Answer: Yes, you are right. It will still has some impact for remaining of the year.

5) There was big jump in Property development costs and Land held for Development in the latest quarter. Was it due to land acquisition by Yarra Park City?

Answer: Yes this is due to Yarra Land , and Reclassification a piece of land that under Land held for development to Property Development.

6) What is the project plan for Yarra Park City since the group had subscribed additional shares in the said group for almost RM215 million this year?

Answer: This will be a mixed development project that consists of residential, and Mall, and hotel.

PJDev: Q3FY15 Result Update

PJ Development just released its 3rd quarter result yesterday. There are some stuff I wished to record down here for reference in case I forget in future.

~ Income Statement ~

Overall, the group posted a slightly better result compared to corresponding quarter last year at PBT level. But the group recorded a much higher effective tax rate this quarter due to losses in certain subsidiaries that are not available to set-off against taxable profits in other subsidiaries within the Group as mentioned in the statement. Thus, a lower net profit.

In terms of diluted EPS, the 10% increased in adjusted weighted average number of ordinary shares compared to corresponding quarter last year didn't help much neither.

In terms of balance sheet, there is nothing more special than the great increase in the land held for property development. This was probably due to the shares subscription of Yarra that took place in Jan and Feb respectively to fund the acquisition of a freehold land located in Victoria, Australia.

As a result, it's not hard to see a big jump in the group's total borrowings too. If look at the breakdown of the borrowings, the increases in borrowings were mostly denominated in Australia Dollar. So, probably used it to fund the Yarra's development.

In terms of cash flow, the increases in land held and development costs caused its net operating cash flow in negative number.

~ Segment Reporting ~

If compared to Q2FY15, the reason the group's performance dropped was obviously seen at segment reporting.

Both Construction and Hotel segments contributed to the poorer performance. Revenue recognition for Properties and Construction segment normally based on POC method in Malaysia. Thus, it should not be a problem as long as the property sales are good and there is no delay in executing the contract. It's just matter of when the revenue would be recognized based on the cost incurred up to date.

Hotel segment is a concern as the management did not state the reason why the segment recorded a loss in this quarter. Not sure whether it's due to startup cost incurred for the upcoming new D'Majestic and Swiss-Inn or not.

Cable division was not doing quite well with its profit margin dropping compared to last year.

Good thing is the Building Material segment continue to show good performance compared to last year. The Acotec wall panel probably continue to gain acceptance by the industry players. 

So, that's.

No unbill sales was given in the quarter report. But probably still good and the management mentioned the response of the new launch of Genting Windmill was good.

We still have to wait for few months before the corporate exchange between OSK and PJ Dev to take place.