Friday, July 06, 2012

BJAsset- a cheap property stock with a twist

In line with the on-going REIT theme play, you may want to check out the company that owns Berjaya Time Square in Kuala Lumpur. According to Wikipedia, Berjaya Time Square is a twin tower complex containing a shopping centre and a five-star hotel. Both towers are 203 metres (666 ft) tall, with 48 floors. It is currently the seventh largest building in the world and has also been tagged as the "world's largest building ever built in a single phase", with 7.5 million square feet of built-up floor area. This building consists of shopping mall, business office and leisure centre with 1000 retail shops, 1200 luxury service suites, 65 food outlets and entertainment attractions such as Berjaya Times Square Theme Park and GSC MAXX (formerly IMAX) 2D & 3D theatre. For more on Berjaya Times Square, go here.

The company that owns Berjaya Times square is Berjaya Assets Bhd. It does not own the entire building, but a controlling majority of the floor space in Berjaya Times Square. The chart below shows that the stock is still in an uptrend line with support at RM0.80.

Chart: BJAsset's daily chart as at July 5, 2012 (Source: Tradesignum)

In addition to owning Berjaya Times Square, BJAsset is involved in a number forecasting business in Sarawak as well as provides lottery consultancy. For the 9-month ended 31/3/2012, BJAsset reported an operating profit of RM54.7 million, of which RM37.9 million came from property development & investment & RM20.9 million came from gaming operation.

BJAsset (at RM0.84) is now trading at a PE of 10 times (based on annualized EPS of 8 sen for FYE30/6/2012) or at a Price to Book of 0.5 times (based on NTA ps of RM1.65 as at 31/3/2012). For its results for QE31/3/2012, go here.

Based on cheap valuation, positive technical outlook (albeit not necessarily bullish) and potential for positive newsflow (if Berjaya Times Square is spinning off into a REIT), BJAsset could be a good stock for long-term investment.

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