CRESNDO
Crescendo Corporation Berhad
Company Background
Crescendo to Sell 7.4ha Land in Johor for RM120mil
Crescendo Corp Bhd is disposing of a 7.43 hectare five plots of vacant land in Johor Baru to Data Cloud Innovation Sdn Bhd for the development of data centres in Johor.
In its filing with Bursa Malaysia, Crescendo said its subsidiary Panoramic Industrial Development Sdn Bhd (PID) has inked a deal with Data Cloud to dispose of the land for RM120.061 million.
"All those five plots of land form part of the master development known as "Nusa Cemerlang Industrial Park" (NCIP), a light and medium industrial park currently developed by PID," it said.
The net book value of the land, based on audited financial statements as of Jan 31, 2024, was RM19.15 million.
Crescendo said the sale consideration is intended to be utilised for development of the balance landbank owned by the CCB Group and to provide working capital for CCB Group and PID.
"The company is expected to record a consolidated gain after taxation of approximately RM65.22 million upon unconditional date as defined in the SPA," it said.
According to Crescendo, the disposal is expected to unlock the value of the land at a reasonable price after taking into consideration the marketability and prospects of the land.
It will also help the company to generate cash flows for repayment of the borrowings of the company, it added.
This marks Crescendo's seventh land disposal since November last year, when it sold two parcels for RM117.02 million to STT GDC Malaysia 2 Sdn Bhd, a Singapore-based data centre operator.
$CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD)
Source:
https://cutt.ly/YeXJ9lKF
UBS report on datacenter
Cannot upload cos file too big.
But here's summary:
The data centre (DC) story has been a strong driver for Malaysia, with Microsoft, Google, Amazon and ByteDance collectively announcing investments of around US $12bn (about RM60bn). To attempt to answer key investor questions we have looked at the implications of these investments across the entire Malaysian market. While we think investor concerns about oversupply are partly warranted in the short term, long-term trends are robust (15% supply and demand CAGRs for 2024E-50E) with AI demand set to balance the market, in our view. Our analysis of global cloud regions suggests land demand in Malaysia of 32-249 acres pa over H224-2028, positive for developers. DC-related sectors including construction, utilities and property, as well as Telekom Malaysia (TM), are up 22-37% YTD and we expect further upside for TNB, TM, Mah Sing and global DC operator GDS.
$TM / 4863 (TELEKOM MALAYSIA BERHAD) $MAHSING / 8583 (MAH SING GROUP BERHAD) $TENAGA / 5347 (TENAGA NASIONAL BHD) $YTLPOWR / 6742 (YTL POWER INTERNATIONAL BHD) $CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD)
Recent 2 months I’ve been noticing quite a few corporate actions going-on, so I’ve compiled a non-exhaustive list here…
$CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD) proposes three-to-one share split
$RCECAP / 9296 (RCE CAPITAL BERHAD) proposes one-for-one bonus issue
$PMBTECH / 7172 (PMB TECHNOLOGY BERHAD) to raise RM300 mil from rights issue
$MGRC / 0155 (MALAYSIAN GENOMICS RESOURCE CENTRE BERHAD) plans private placement to raise up to RM4.98 mil
PTT proposes one-for-one bonus issue
$KLSE-BMGREEN proposes one-for-four bonus issue of warrants
HAILY proposes one-for-one bonus issue with free warrants
QL proposes one-for-two bonus issue
ANNJOO proposes one-for-four rights issue with warrants, to raise up to RM166m
GREATEC proposes one-for-one bonus issue
VS proposed 1-for-10 bonus issue of warrants
TRIVE proposes two-for-five bonus issue of warrants
ENGTEX proposes three-for-four bonus issue
ATECH fixes issue price for private placement at RM3.35 per share
XOX plans for 30-to-one share consolidation after proposing capital reduction
YENHER proposes bonus warrants
Any that warrants attention, you think?
$CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD)
General Meetings: Outcome of Meeting
$CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD): Quarterly Profit Surpasses the Combined Profits of the Past 7 Financial Years
CRESNDO has achieved new highs in both revenue and profit in Q1FY25, marking the best quarterly performance ever. The profit for this quarter has surpassed the total profit of the past 7 financial years combined. Here are some key takeaways from the latest quarterly report:
1. Revenue Surge: Revenue soared to RM527.3 million, marking an 804% year-on-year increase. This quarterly revenue also exceeded the entire FY24 revenue of RM341.3 million. The significant rise in revenue is mainly attributed to data center land sales in Nusa Cemerlang Industrial Park, which contributed over 90% of the revenue this quarter.
2. Profit Before Tax: PBT increased by 1,934% year-on-year to RM382.6 million, driven by the revenue increase. The higher PBT relative to revenue is due to minimal expenses associated with the land sales.
3. Profit After Tax: PAT grew by 2,089% year-on-year to RM289 million, surpassing the combined PAT of the past seven financial years.
4. Cash Position: The company’s cash position strengthened, rising to RM271.8 million from RM54.9 million year-on-year, a 395% increase.
5. Net Debt Position: Despite the improvements, the company remains in a net debt position of RM5.1 million, down from RM294 million in January 2023.
6. Dividend Payout: The company’s net debt status is primarily due to high dividend payouts in FY24 following the land sales.
7. Free Cash Flow: The company generated positive free cash flow this quarter.
8. Landbank: As of April 30, the company holds a landbank of 2,529 acres, primarily in Johor.
9. Upcoming Projects: Within the next year, the company plans to launch 167 units of mid to high-end landed residential properties at Bandar Cemerlang and 57 units of shop offices at Desa Cemerlang, with a total GDV of RM237 million.
10. Future Developments: The company also plans to launch a serviced apartment project along Jalan Senyum near the RTS terminal at Bukit Chagar in the second half of FY2025. This project will include approximately 1,200 units with a GDV of RM1 billion.
11. Industrial Park Development: CRESNDO intends to start the main infrastructure work for the industrial park at Bandar Cemerlang in FY2025, with the first phase of sales expected within the next three years.
12. Management Outlook: The management is optimistic about the company’s upcoming property developments and expects optimal operation in the coming years. With committed property sales of RM486 million as of June 25, 2024, including RM335 million in land sales at NCIP (with RM219 million completed to date), the management anticipates an exceptional year in FY2025.
1/4
KUALA LUMPUR: Crescendo Corporation Bhd's net profit for the first quarter ended April 30, 2024 (1Q) surged to RM289.03 million from RM13.20 million in the corresponding period a year ago, due to land sales for a data centre in Nusa Cemerlang Industrial Park in Johor.
Quarterly rpt on consolidated results for the financial period ended 30/04/2024
TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONSCRESCENDO CORPORATION BERHAD ("CCB")
-DISPOSAL OF LANDS BY PANORAMIC INDUSTRIAL DEVELOPMENT SDN BHD ("PID"),
A WHOLLY-OWNED SUBSIDIARY OF CCB, TO STT GDC MALAYSIA 2 SDN. BHD.
TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONSCRESCENDO CORPORATION BERHAD ("CCB" OR THE "COMPANY")
PROPOSED DISPOSAL BY PANORAMIC INDUSTRIAL DEVELOPMENT SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF CCB, OF A VACANT INDUSTRIAL LAND LOCATED IN THE MUKIM OF PULAI, DISTRICT OF JOHOR BAHRU, STATE OF JOHOR FOR A TOTAL CASH CONSIDERATION OF RM115,877,876.40 ("PROPOSED DISPOSAL")
STATEMENT TO SHAREHOLDERS IN RELATION TO THE PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK
Annual Report & CG Report - 2024
General Meetings: Notice of Meeting
TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONSCRESCENDO CORPORATION BERHAD ("CCB")
DISPOSAL OF LAND BY PANORAMIC INDUSTRIAL DEVELOPMENT SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF CCB, TO MICROSOFT PAYMENTS (MALAYSIA) SDN. BHD.
TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONSCRESCENDO CORPORATION BERHAD ("CCB")
-DISPOSAL OF LANDS BY PANORAMIC INDUSTRIAL DEVELOPMENT SDN BHD ("PID"),
A WHOLLY-OWNED SUBSIDIARY OF CCB, TO STT GDC MALAYSIA 2 SDN. BHD.
Big Tech's Data Centers
With the increasing amount of data sets needed to train AI, the number of data centers is expected to rise. Many tech giants are investing in Malaysia to build data centers, including partnerships like the one between Nvidia and $YTLPOWR / 6742 (YTL POWER INTERNATIONAL BHD) and Microsoft's acquisition of land from $CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD) for data center. But do you know how many data centers these tech giants actually own? Visual Capitalist has provided some insights.
Microsoft operates the most data centers, with about 300, followed by Amazon with 215. Despite owning fewer data centers, AWS holds the highest market share in cloud computing. Google, Meta, and Apple operate significantly fewer data centers.
Among Chinese tech giants, Alibaba Cloud operates around 89 data centers. The exact number of data centers owned by Huawei and Tencent, the second and third largest cloud computing companies in China, remains unclear.
TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONSCRESCENDO CORPORATION BERHAD ("CCB")
DISPOSAL OF LAND BY PANORAMIC INDUSTRIAL DEVELOPMENT SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF CCB, TO MICROSOFT PAYMENTS (MALAYSIA) SDN. BHD.
$AME / 5293 (AME ELITE CONSORTIUM BERHAD)
$CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD)
$MAHSING / 8583 (MAH SING GROUP BERHAD)
$AXREIT / 5106 (AXIS REAL ESTATE INVESTMENT TRUST)
$KSL / 5038 (KSL HOLDINGS BERHAD)
OTHERSPROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK
TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONSCRESCENDO CORPORATION BERHAD ("CCB")
DISPOSAL OF LANDS BY PANORAMIC INDUSTRIAL DEVELOPMENT SDN BHD ("PID"), A WHOLLY-OWNED SUBSIDIARY OF CCB TO YU AO SDN. BHD.
A Brief Understanding of the Different Stages in a Construction Life Cycle and the Supply Chain players involved.
For most buildings, the bulk of the construction process is quite similar to one another... whether you're building residential units, warehouses, factories, or even Data Centres, the general processes along the way follow the same paths.
Since everyone wants to ride on the data center theme lately, and with all sorts of companies making various announcements related to DCs, I would just like to share a bit about the various stages involved in the construction process and some supply chain players at each stage.
Since DC is of interest, I'll take it from the perspective of a potential DC player.
1) Land Acquisition and Approvals
Before a building is built, there has to be land ready for it to be built on with the proper title. Meaning, you can't build a factory on residential land, and conversely you can't build a condo on agricultural land and so on.
Location, infrastructure availability and so on are of key importance for potential buyers.
At this stage, land deals would draw attention and we see it already with the likes of $CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD) selling off huge batches of land to DC players. I won't be surprised if there are plenty of other land deals ongoing that aren't making headlines. Those on the ground might be able to sniff some out. Land title changes, zoning, etc.
2) Substructure, Superstructure, and infrastructure construction
Substructure works basically involve underground works. Piling, foundational, geotechnical, earthworks and such fall here.
Superstructure is above ground works. Most construction companies would be able to tender for this kind of works and it's nothing really special as long as you follow a pre-defined spec. This is a wide scope and typically make up the bulk of the cost of a building, but generally have the lowest margins.
Infrastructure works include power stations, cabling, roads, utilities, street lighting, and so on. Connecting to the mains, testing for power quality, backup power, overheads, and the like.
Typically, and depending on complexity and size, a building can be built within 12-18 months to VP (or faster if the owner has a lot of cash and can expedite works).
Most players in this space will recognize revenue in stages as construction progresses and I won't be surprised if many start to do fund raising to enable them to take on more works, as there are lots of tenders and contracts being awarded right now to build DCs as fast as possible.
During this time, a lot of building material producers will also see increasing demand, for products such as cement, steel pipes, valves, roofing, tiles, wiring, etc etc. Many famous construction companies would be involved here; and you can just read announcements to see how many have secured DC jobs already such as $GAMUDA / 5398 (GAMUDA BERHAD) and the like.
3) Finishings and fittings
These would be the bells and whistles of a building. Lighting, windows, shutters, cable trays, fire doors, and so on.
Generally, these are rather niche products that are small in terms of the whole building costs, but tend to have higher margins. These companies normally come in at the tail end of the construction and can finish their works within a month or two.
In more modern buildings, these would also include networking infrastructure such as bridges, repeaters, mesh, data points, and so on. (and this can be another huge industry altogether)
4) Hardware, ancillaries, and others.
Once 1-3 above are completed, this is where DCs start to differ substantially from other buildings. Unfortunately, I am not too well versed in this area and can't offer much further comments other than what I know from hearsay.
Generally these tend to be the more specialist stuff, and the core items include the servers, GPUs, HDDs and SSDs and so on. Normally and typically, the items will come from the asset owner directly (from original country) or sometimes they might enlist a local EMS company to produce these items for them.
Another aspect would be the cooling systems, as DCs require a huge amount of power and that generates heat. If you've ever used a high spec computer, you know that typical processor fans alone won't cut it. Insulation and the like are also of key importance in this aspect.
5) Software?
This is also an area that I am not well versed in and unfortunately don't know much :(
At the minimum, cloud services, cybersecurity? How do they fit in to the grand scheme of things? Would they operate as part of a CAPEX or OPEX?
6) Consultants
These guys would be involved in all parts of the design and build, specifying certain specs and brands required, liaising with local authorities and so on. It could be local companies, it could be foreign, or a mixture of both.
And generally, that's briefly it on the whole process of building a DC! How do data centers earn money? Essentially they function something like a REIT, providing "rental" of "memory space" to corporations in exchange for a recurring fee.
As with all (or most) recurring income businesses, they will have to incur large upfront CAPEX before they get their recurring income and capital back down the line.
Did I miss any other parts of the supply chain? Have you done work on a DC before? Which companies in Malaysia still have legs to run and not yet priced in the full impact of the booming DC industry in Malaysia yet?
**image from AKCP
$CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD) to launch RM1.2b GDV projects in FY25
Key points:
#Johor-Theme. Attention turning to low-profile developer Crescendo following four land disposals in the last five months. Sold over 135 acres for RM675m.
#All eyes on 1QFY25 performance as several deals (2.5/4) have been completed.
#On the possibility of higher dividends, Crescendo chairman and MD Gooi Seong Lim says "the management will review its position bi-annually to determine the dividend payout."
#Plans to launch properties with a total GDV of RM1.2b in FY25. (Compared to around RM100-200m total GDV a year over the last 5 years.) Has launched 167 units of residential properties at Bandar Cemerlang, 57 units of shop offices at Desa Cemerlang and 1,257 units of serviced apartments within the RTS terminal at Bukit Chagar.
#Gooi expects strong demand for lands from industrial and data centre operators, saying "We are open to more land sales at the right price." About 60 acres are available for sales at NCIP.
#Has started the main infrastructure works in Bandar Cemerlang Industrial Park. Plans to launch the first phase within the next three years.
#With strong pipeline of incoming FDI to Johor, demand for industrial properties will remain strong in the coming years.
- The Star Biz
TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONSCRESCENDO CORPORATION BERHAD ("CCB")
- DISPOSAL OF LANDS BY PANORAMIC INDUSTRIAL DEVELOPMENT SDN BHD ("PID"),
A WHOLLY-OWNED SUBSIDIARY OF CCB, TO STT GDC MALAYSIA 2 SDN. BHD.
$CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD) : Strategic Land Disposal and Surging Share Prices Propel Growth
1. Land Disposal Announcement:
Crescendo Corp Bhd has announced the disposal of a piece of vacant freehold land measuring 1.1 million sq ft in Pulai, Johor for RM132.47 million, or RM120 per sq ft. This transaction involves its wholly owned subsidiary, Panoramic Industrial Development Sdn Bhd (PID), entering into a conditional sale and purchase agreement with Microsoft Payments (Malaysia) Sdn Bhd.
2. Previous Land Disposals:
It is noteworthy that Crescendo disposed of three vacant pieces of land measuring 2.62 million sq ft, near the vicinity of the latest proposed land, for RM315.17 million cash to Microsoft Payments in November 2023.
3. Anticipated Gain:
Crescendo anticipates a net gain of RM80.83 million from the latest proposed land sale.
4. Utilization of Proceeds:
The group plans to utilize the net cash proceeds of RM127.7 million for debt repayments (RM50 million), working capital (RM73.41 million), related exercise expenses (RM11.5 million), and disposal-related expenses (RM4.77 million).
5. Approval Requirements:
The sale and related exercise will require written confirmation from the Equity Development Division of the Ministry of Economy, as well as from the Johor state authority.
6. Expected Completion:
The proposed disposal is expected to be completed by the fourth quarter of 2024, subject to any unforeseen circumstances.
7. Ownership:
Crescendo is 70%-owned by the Gooi family, who also holds a controlling stake in the plantation group Kim Loong Resources Bhd.
8. Share Price Movement:
Shares in Crescendo surged to a record high following the announcement of the latest land disposal plan. On April 4, 2024, the shares closed three sen or 0.99% higher at RM3.07. On April 5, 2024, during Friday’s morning session, the counter rose as much as 5.86% to RM3.25 before paring its gains to RM3.22 by noon break. At RM3.25, the group is valued at RM903.09 million. Year to date, the stock has rallied 32.33%.
9. Dividend Declaration and Financial Performance:
Crescendo declared an interim dividend of five sen per share and a special dividend of 13 sen per share, following its surge in earnings to a seven-year high. Net profit more than doubled to RM57.06 million for the financial year ended Jan 31, 2024, while revenue surged 58% to RM341.35 million.
$CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD) riding high on data centre play (The Edge Malaysia, April 8, 2024)
Key points:
Four land disposals in 5 months - all for data centre related activities.
Crescendo has sold more than 135 acres, bringing in sales proceeds of more than RM675m.
Crescendo seems to be the dark horse as the data centre and logistics play picks up in Johor.
Crescendo has also acquired land to take advantage of the Johor-Singapore RTS.
Comments:
- Crescendo still has remaining landbank of about 75 acres at NCIP. Worth RM392m at RM120 psf.
- Plans to launch 1,200 units of serviced apartment near Johor-Singapore RTS with total GDV of RM1b in 2HFY25. GDC (including land cost) is RM535m. High profit margin.
- Valuation remains undemanding at only 0.4x RNAV.
TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONSCRESCENDO CORPORATION BERHAD ("CCB")
-ACQUISITION OF LANDS
$CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD)
$CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD) disposes another parcel of land measuring 102.5k sqm, 1,103,927 sqft or approx 10 hectares at a price of RM 120 pqsft.
This is also in Pulai, JB, and located adjacent to some of the lands they have sold previously at the same price psqft. Cresndo expects to recognize another pro forma gain on disposal of around RM 80mil, or approximately 30 sen per share.
This is on top of their previous sales. It's pretty substantial. Cresndo this morning will probably open in a gap up, but take a step back and evaluate: how much could this company be worth with their remaining landbanks?
TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONSCRESCENDO CORPORATION BERHAD ("CCB")
DISPOSAL OF LAND BY PANORAMIC INDUSTRIAL DEVELOPMENT SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF CCB, TO MICROSOFT PAYMENTS (MALAYSIA) SDN. BHD.
TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONSCRESCENDO CORPORATION BERHAD ("CCB")
DISPOSAL OF LANDS BY PANORAMIC INDUSTRIAL DEVELOPMENT SDN BHD ("PID"), A WHOLLY-OWNED SUBSIDIARY OF CCB TO YU AO SDN. BHD.