Hello dear readers,
My stock pick for 2015 would be Naim Holdings Berhad - NAIM.
Current price as of Friday 24th April 2015 closing price : RM 2.88
Fair valuation (Target Price) : RM 5.82
Par value : RM 1.00
Net Asset : RM 5.04
By the way, forget about owning any Dayang Holdings Berhad shares directly. Why?
Because Naim holds 30.90% of DAYANG.
Naim has a total of 250,000,000 shares in the market @ RM 2.88 per share.
Dayang has a total of 877,099,935 shares in the market @ RM 2.60 per share.
So 30.90% of total DAYANG's share is 271,023,879 shares. For the sake of simplicity, we reduce it to just become 250,000,000 shares instead.
So if you own 1 share of NAIM : you automatically became an owner of 1 share of DAYANG!!!
Due to the fact NAIM only has 250,000,000 share capital, same as the amount we assumed it owned DAYAMG.
So one can essentially say, NAIM costs merely 28 cent only. Lol?
Get it?! Refer below to get a better understanding.
Naim Holdings Berhad is an investment holding company. The Company, through its subsidiaries, operates in three segments: integrated property developments, which includes residential, commercial and industrial properties with infrastructure and public amenities; contracting of construction, civil engineering, oil and gas and infrastructure projects, and oil and gas services through its investment in Dayang Enterprise Holdings Bhd. Other activities include the manufacture and sale of construction materials, provision of sand extraction and land filling services, property investment holdings, as well as quarry operation. The Company is the holding company for its 100% owned subsidiary, Naim Land Sdn Bhd (NLSB), which is primarily involved in property development and construction. On February 11, 2010, its subsidiary, Naim Overseas Sdn. Bhd. acquired 99.99% interest in Naim Quarry (Fiji) Limited.
For 2014 :
Average 5 Years EPS : 58.23 cent
EPS x 10Y to break even : 58.23 x 10 = RM 5.82
Gross profit increased by RM 18.36 million or equivalent to 17%.
Earning per share : 92.99 cent (2015) vs 99.49 (2014) dropped by 6.5 cent or 6.98%.
The higher earning were contributed by the disposal of Naim's stake in Dayang Enterprise Holdings Bhd.
They had disposed 2.73% of DEHB for a total cash consideration of RM 82.1 million.
Originally they had 33.63% stake in DEHB, upon disposal NAIM still have 30.90% stake left.
Upon disposal, NAIM earned a gain of RM 61.8 million.
So, their original cost of investment was only RM 20.3 million (2.73% stake) ~ their gain was near 304% !!!!!
Best of all, they still have 30.90% stake left!
With the upcoming plan of Borneo Island City with a Gross Development Value of RM 10 billion, NAIM will surely get to enjoy the spillover of it, given it's good track record on both construction and property sector. They have also won the award for being the most outstanding developer award in 2015 : refer here.
My prediction :
Sooner or later, NAIM Holdings Berhad will have to give out bonus issue because they only have a share capital of RM 250,000,000 , where as their reserve is around RM 959,684,000. Yes almost 4 times of it's capital. By having a small capital, they will be very limited on bidding on for mega contracts etc. So a capital enlargement is required, and they can do so by issuing out bonus.
Past 10 Years Financial Highlights :
Why you should not be worried on buying NAIM Holdings?
Look on it's top 30 shareholders!
Lembaga Tabung Haji has 10.48% stake.
JPMorgan Chase (USA) has (2.48%+1.25% = 3.73% stake).
Employee Provident Fund (EPF) has 2.18% stake.
Koperasi Permodalan Felda has 1.08% stake.
These 4 big boys has a combined shareholdings of 17.47%.
Naim has a huge land bank in Sarawak, they have about 7,431,366 square meter of land or equivalent to 1,836 acre of land.