Tropicana Corporation Berhad

KUALA LUMPUR: Tropicana Corporation Berhad’s subsidiary, Tropicana Firstwide Sdn Bhd (TFSB), has signed a sale and purchase agreement with Computility Technology (Malaysia) Sdn Bhd (CTMSB) to sell 38.53 acres of land in Gelang Patah, Johor, for RM240 million. 

© New Straits Times Press (M) Bhd

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
$TROP / 5401 (TROPICANA CORPORATION BERHAD)

$TROP / 5401 (TROPICANA CORPORATION BERHAD)

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD): Plans for REIT Listing? 🏘️

Recent acquisition activity suggests that IOI Properties is gearing up to establish a REIT. IOI Properties has completed four significant acquisitions from $TROP / 5401 (TROPICANA CORPORATION BERHAD), including W Hotel KL, Courtyard Penang, land in Pantai Kok, Langkawi for hotel development, and Tropicana Mall. The acquisitions of the hotels and mall cost RM1.13B, while the land acquisition cost RM90.1M. The combined value of these assets meets the requirements for a REIT listing, with the Tropicana Mall acquisition being particularly noteworthy due to its discounted price, likely influenced by its low occupancy rate.

In addition to these recent acquisitions, IOI Properties owns a substantial portfolio of assets, including retail malls, hotels, and office towers:

Retail Malls: IOI City Mall, IOI Mall Puchong, IOI Mall Kulai
Hotels: Putrajaya Marriott Hotel, Moxy Putrajaya, Palm Garden Hotel Putrajaya, Four Points by Sheraton Putrajaya, Le Méridien Putrajaya Hotel
Office Towers: PFCC, IOI Square, IOI City Towers, IOI Central Boulevard Towers in Singapore

These holdings indicate that IOI Properties has met the requirements to establish and list a REIT. The key question is when this will happen. In my view, the company may be addressing the occupancy rates of its recent acquisitions and existing assets and completing the hotel development in Langkawi before moving forward with the REIT. At that point, IOI Properties will have a substantial asset base from which to select properties for the REIT.

$SAB / 5134 (SOUTHERN ACIDS (M) BERHAD): Awaiting Value Realization

1. Background
The company's business segments are divided into three areas: oleochemical manufacturing, milling and cultivation, and healthcare services.

2. Free Float
Company directors own half of the total issued shares, followed by Lembaga Tabung Haji with 11.3%, and the remaining 38.4% are publicly owned.

3. Financial Performance
The company's performance has been unstable, with revenue growth observed from FY20 to FY22, followed by a decline in FY23 and FY24. Notably, the company's total assets have grown, reaching RM1.02 billion in FY24. Despite an increase in cash and borrowings, the company remains net cash positive. In FY24, the company had a net asset per share of RM5.69 and a net cash per share of RM2.71, meaning 81.6% of the current market capitalization is in cash.

4. Valuation (Assets)
Considering the net cash per share of RM2.71, the value of shares in $PARAMON / 1724 (PARAMOUNT CORPORATION BERHAD) (approximately RM0.22 as the third-largest shareholder), and the land and building valuation (RM1.56), the total is RM4.49. This represents a 31.3% discount to the current share price.

5. Valuation (Assets + Earnings)
In the first method, only the company's assets were calculated. Adding the EPS of RM0.1 achieved in FY24 (the lowest in 8 years) and assuming the company continues to achieve this in subsequent fiscal years, the value per share would be RM4.59, which is a 34.2% discount.

6. Key Highlight
The recorded land value is lower than the market value. The company owns 260.82 hectares in Thangamallay Estate, recorded at RM139.87 million (equivalent to RM4.98 psf). However, 10 years ago, $GAMUDA / 5398 (GAMUDA BERHAD) purchased land 6.5 km away for RM35 psf, which was leasehold, whereas Thangamallay Estate land is freehold. This suggests the recorded land value is below market value.

7. Prime Location of Thangamallay Estate
Thangamallay Estate is located 2.6 km from TECHBOND, 4.7 km from $UNIQUE / 0257 (UNIQUE FIRE HOLDINGS BERHAD), 3.5 km from $TROP / 5401 (TROPICANA CORPORATION BERHAD), 4 km from IJM's Rimbayu, and 6.5 km from Gamuda Kota Kemuning.

8. Revaluation with Estimated Land Value for Thangamallay Estate
Using Gamuda's purchase price from 10 years ago as a benchmark, Thangamallay Estate's land could add an estimated RM6.15 per share. This would bring the company's value to RM10.64 per share (assets) and RM10.74 per share (assets + EPS), resulting in a 212.9% and 215.9% discount, respectively. However, it's important to note that the current land value might be lower than Gamuda's purchase price, making this a rough estimate.

9. Research Reports by RHB Investment Bank
RHB Investment Bank's 2018 research report indicated that SAB was undervalued in terms of assets, though the timing for value unlocking remained unclear. In 2019, RHB followed up, citing the sluggish property market as a key obstacle for the company to unlock its value.

10. Conclusion
SAB is a cash and asset-rich company generating free cash flow, with undervalued land recorded in its books. However, it could be a value trap due to uncertain value unlocking timelines, low dividend payouts, and declining growth, as seen in FY24. To unlock its land value, SAB could consider developing the land itself or partnering with Paramount, given SAB's significant shareholding in Paramount and the close relationship between the two companies. The flourishing property market presents a timely opportunity for such actions. If the company does not act, the timeline for unlocking value will remain uncertain, potentially keeping the share price stagnant for an extended period.

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD) $TROP / 5401 (TROPICANA CORPORATION BERHAD)

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD) $TROP / 5401 (TROPICANA CORPORATION BERHAD)

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD) $TROP / 5401 (TROPICANA CORPORATION BERHAD) -IOI Properties snaps up Tropicana Gardens Mall for RM680m, third deal with Tropicana Corp in eight months

I believe IOI Properties Group Bhd’s acquisition of Tropicana Gardens Mall is a strategically sound decision that enhances their retail portfolio and provides a stable income stream. The prime location and established operations of the mall are significant advantages. For Tropicana Corp, the sale aligns with its strategy to reduce debt and improve financial flexibility, positioning both companies for future growth and stability. overall this benefits more for IOI Properties.

General Meetings: Outcome of Meeting

$TROP / 5401 (TROPICANA CORPORATION BERHAD)

KUALA LUMPUR: Tropicana Corporation Bhd said that its degearing exercise has successfully reduced the company’s overall debt from RM3.8 billion in fiscal year 2023 (FY2023) to RM3.5 billion. 

© New Straits Times Press (M) Bhd

KUALA LUMPUR: Tropicana Corporation Bhd said that its degearing exercise has successfully reduced the company’s overall debt from RM3.8 billion in fiscal year 2023 (FY2023) to RM3.5 billion. 

© New Straits Times Press (M) Bhd

KUALA LUMPUR: Tropicana Corporation Bhd has redeemed the third tranche of its Sukuk Wakalah Programme worth RM110 million, which was due on June 7, 2024.

OTHERSPRESS RELEASE: TROPICANA REDEEMS RM110 MILLION ISLAMIC BOND - Move is part of the company's efforts to reduce gearing & optimise its financial management

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

OTHERSPRESS RELEASE: TROPICANA Q1 REVENUE UP BY 13.5%

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - T SHARES 1 SDN BHD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - TAN SRI DATO' TAN CHEE SING

Changes in Director's Interest (Section 219 of CA 2016) - TAN SRI DATO' TAN CHEE SING

$KSL / 5038 (KSL HOLDINGS BERHAD) $TROP / 5401 (TROPICANA CORPORATION BERHAD)

Annual Report & CG Report - 2023

STATEMENT TO SHAREHOLDERS IN RELATION TO THE PROPOSED RENEWAL OF AUTHORITY FOR TROPICANA CORPORATION BERHAD TO PURCHASE ITS OWN SHARES OF UP TO TEN PER CENTUM (10%) OF ITS TOTAL NUMBER OF ISSUED SHARES ("PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY")

General Meetings: Notice of Meeting (Amended Announcement)

General Meetings: Notice of Meeting

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Intention to Deal During Closed Period

OTHERSTROPICANA CORPORATION BERHAD ("TROPICANA" OR "THE COMPANY")
- PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN SHARES

Change in Boardroom - MR DIN TAN YONG CHIA

KUALA LUMPUR: Tropicana Corporation Bhd says that it is well-positioned for sustainable expansion in the upcoming years thanks to its strong landbank, which spans 1,842 acres and has a potential gross development value of over RM120 billion.

© New Straits Times Press (M) Bhd

$TROP / 5401 (TROPICANA CORPORATION BERHAD)

MULTIPLE PROPOSALSTROPICANA CORPORATION BERHAD ("TROPICANA" OR "THE COMPANY") PROPOSED COLLABORATIONS