Plenitude - acquired land adjacent to KOMTAR in Penang

It is targeting to achieve rm300 million in GDV sales for FY2013.

It had acquired a 1.1 acre land adjacent to Komtar in Penang in 2012. It plans for prime Georgetown land for Rm33 million.

As at June 2012, its land bank size stood at around 1797 acres while total current and future GDV is estimated to be around rm6.3 billion.

Plenitude is in a net cash position. It has no gearing. Its cash stood at rm392 million and nil borrowings as at June 31 2013. Net asset per share stood at rm3.13 as at June 30 2012.

Meanwhile the winning bidder of bidders for the two Penang hotels put up for sale by the EPF – the Gurney Resort Hotel & Residences and the Northam All Suite Penang – are expected to be announced soon as the selection is believed to be at the final stage.

It is learnt that PJD which also owns and operates hotels, is one party that may have reached this staged in the bidding. PJD’s hospitality arm Swiss Garden Intl Sdn Bhd has in fact been managing both the hotels since Aug 2012.

Another party that has made it to the final stage is Johor based Plenitude Bhd. Plenitude is said to have only placed a bid for the Gurney Resort.

Plenitude 2011

From the figure and chart above, we can see that plenitude is growing consistently and it has clear off its debt and with RM335million cash on hand. It seems plenitude has a healthy position in its financial, but I feel that it is too conservative to expand its business. Year 2011 is a good year for construction, but it only able to achieve a minor growth. If you calculate properly on its ROE, you will notice that its ROE keep on decreasing, from 14.1% at year 2008 decrease to 11.8% at year 2011.

My conclusion is the Management is too conservative, however it is a safe to invest it with a dividend yield around 4%