Plenitude: Landed helps, high-rise deferred, GDV 12 billion

When I buy stocks, even the undervalued ones, I would always focus on those which are cash rich or low debts. The reason is because these would be companies that may withstand some slowdown, as long as they did not make a huge mistake in their business. One such company is Plenitude Bhd. For the financial year ended June 30, 2015, the total borrowings for the group stood at RM46.28 million whereas its cash and cash equivalents amount to RM323.17mil. In terms of business, Plenitude is now both a property developer as well as hotel operator. It has the following under its hospitality section. It currently has Glow Penang, The Nomad Sucasa All Suite Hotel, Novotel KLCC, The Nomad Residences, Four Points by Sheraton Hotel and The Gurney Resort Hotel & Residences in Penang.
themarinIt aims to maintain property sales of RM250 million for the financial year ending June 30 2016. Within the next two years, it will be launching properties worth RM1 billion. Yes, I think this meant that they are taking into account the current slowdown. According to its executive chairman Chua Elsie, due to its focus on launching mostly landed properties, its performance has not been affected so much currently. In fact it has deferred one of its high rise development called Mandolin Residences in Johor Bahru until the sentiment improves. Plenitude has a few ongoing property projects in Selangor, Johor, Penang and Kedah, with a GDV of RM600 million. In total, it has 1,500-acre undeveloped landbank with a potential GDV of RM12 billion.
With its available cash, it is scouting for good land deals under current slowdown in areas such as the Klang Valley, Penang and Johor Baru. I think pretty safe choices in terms of areas but these days, land prices remain high even if current times may provide some opportunities. It is aiming to have the hospitality division contributing up to 30 percent to its revenue in a few years time, from 10 percent in FY15.  It has reported a net profit of RM155.76 million for the financial year ended June 30, 2015 against RM87.65 million a year ago.
Honestly, nothing too exciting happening but if property investment is a little too volatile currently for your liking, can always buy some property counters and keep for a longer term. This remains a healthy counter and its cash is way above its debt which meant risks are likely to be low, even if the current negative sentiment persists. I know some Plenitude people personally and I think they are working pretty hard. As for the question of whether to buy their stock or not, I have no idea. Perhaps take a look at what a famous stock related site has to say. plenitudeI do not hold any Plenitude units currently. Happy selecting the best, whether its property or stocks.
written on 10 Nov 2015
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