Its key asset, a 1053.80 acre price of land in Kota Masai, Pasir Gudang, Johor is only valued at rm7 psf or rm322 million in its books and has not been revalued since it was acquired in 1994.
Using a conservative market value of rm25 psf, the land alone is worth more than rm1.1 billion. This works out to a revised net asset value of about rm3 per share.
Typically, smaller companies like Focal Aims would command a 40% to 60% discount to RNAV due to the slower rate as at which the value is unlocked. However with EcoWorld’s management at the helm, the value could be unlocked much quicker.
EcoWorld is being spearheaded by SP Setia bhd’s former top management. If the team’s track record is any things to go by, the land could have a higher RNV.
On EcoWorld’s future plans, it is looking at generating more than rm1 billion in unbilled sales before 2015.
The RTO exercise is just the first step of a bigger plan. The next move is expected to be an asset injection by its new shareholder EcoWorld.
