Selangor Properties seeks trade suspension, pending announcement

KUALA LUMPUR (Oct 25): Selangor Properties Bhd has requested that trading of the company’s shares be suspended today, pending the release of a material announcement.

This sparked speculation about what the material announcement would be on.

Like many of its property peers, Selangor Properties’ share price has been drifting lower most of the time over the past three years. Its share price closed yesterday at RM4.06 with a market capitalisation of RM1.4 billion.

Year to date, the counter has fallen by 17% from RM4.90. The current share price is at a 43.5% discount to its net asset per share of RM7.19 as at July 31.
The group owns several plots of land and buildings in Damansara Heights and Bukit Tunku, and among its priciest properties is the 25-storey Menara Milenium in Damansara Heights, which fetched a book value of RM361.93 million, according to its annual report for the financial year ended Oct 31, 2017.

The Wen family controls a 68% stake in Selangor Properties. The block of shares, which is worth RM952 million based on yesterday’s closing of RM4.06, is held through Kayin (M) Sdn Bhd.

Meanwhile, Kayin is controlled by trusts, of which Puan Sri Chook Yew Chong Wen, the matriarch of Selangor Properties, and her family members are primary beneficiaries.

Chook, who passed away last month, co-founded the company with her husband, the late Tan Sri Dr Wen Tien Kuang, in 1963. Chook retired from the group’s board in December last year at the age of 95, succeeded by her son Wen Chiu Chi.

The group reported that its net profit surged 70.2% to RM33.2 million in the third financial quarter ended July 31, 2018 (3QFY18) from RM19.51 million a year ago, mainly due to higher foreign exchange (forex) gain of RM16.3 million.

Earnings per share rose to 9.66 sen for 3QFY18 from 5.68 sen for 3QFY17.

Quarterly revenue grew 23.5% to RM39.36 million from RM31.86 million in 3QFY17, mainly due to higher contribution from its Australian operations and higher property development revenue achieved in Malaysia.

However, forex losses of RM37.5 million recognised from the group’s overseas investments dragged down the group’s results for the cumulative nine months (9MFY18) to a net loss of RM1.1 million compared to a net profit of RM72.16 million a year ago. In 9MFY17, the group saw a forex gain of RM30.1 million.

This article first appeared in The Edge Financial Daily, on Oct 25, 2018.

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