Stocks with momentum: Hunza Properties

(Aug 6) SHARES of Hunza Properties rose 3.8% to close at a five-year high of RM2.73 yesterday, after its major shareholder revised its offer price for the proposed privatization to RM2.90 per share.

To recap, Khor Teng Tong Holdings Sdn Bhd had in March expressed its intention to take Hunza private — through a selective capital repayment (SCR) — for RM2.50 per share. The privatization offer is led by its founder Datuk Seri Khor Teng Tong, who together with members acting in concert, holds a combined 59% stake in Hunza.

At RM2.90 per share, the revised offer is a 50.3% premium over Hunza’s average closing price of RM1.93 over the last six months up to March 19. However, the offer price is still 16.4% lower than its net asset per share of RM3.47 at end-March.

Penang-based Hunza, which was listed in March 2000, is principally engaged in property development, property investment and construction. The company’s landbank are mainly located in Penang, including a 703.6-acre freehold land in Seberang Perai Utara and a 42-acre tract in Bayan Baru.

The jewel in the crown for Hunza is Gurney Paragon Mall with net lettable area of 700,000 sq ft. Located at the prime area of Gurney Drive, the mall is built at a cost of RM475 million and has been in operation for about two years only.

For 9MFYJune2015, revenue jumped 43.4% to RM146.2 million while net profit grew an outsized 88.8% to RM17.0 million. Notably, the property investment segment recorded a 66.8% jump in operating profit to RM17.9 million on the back of a 52.9% revenue growth to RM42.2 million, mainly due to higher occupancy rates for its Gurney Paragon Mall and Office Tower.

This article first appeared in the digitaledge Daily, on Aug 6, 2015.