( D) Corporate Profile

Transcription

1 ( D) Corporate Profile 21 November 2009

2 Introduction to Crescendo Corporation Berhad ( CCB ) Group CCB is listed on the Main Board of Bursa Malaysia Securities Bhd with a market capitalisation and shareholders fund of RM169 million and RM398 million respectively. CCB Group is primarily involved in property development and construction related activities in Johor since

3 PRINCIPAL ACTIVITIES Business Activities Property Division Property Development Resort Development (future) Others Construction Division Building Construction Concrete Products Civil Education Property investment & Management Services Engineering 3

4 GROUP STRUCTURE AS AT 31 October 2009 Crescendo Corporation Berhad ( D) 100% Crescendo Creative Education Sdn Bhd ( V) 100% 100% 70% 100% Crescendo Education Sdn Bhd ( T) Crescendo Development Sdn Bhd ( D) Panoramic Jaya Sdn Bhd ( D) Unibase Construction Sdn Bhd (22898-A) 60% 70% 70% 100% Crescendo International College Sdn Bhd ( T) Crescendo Jaya Sdn Bhd ( X) Crescendo Land Sdn Bhd ( M) Unibase Corporation Sdn Bhd ( P) 60% Unibase Concrete Industries Sdn Bhd ( A) 100% Panoramic Industrial Development Sdn Bhd ( K) 100% 100% Ambok Resorts Development Sdn Bhd ( M) Panoramic Land Sdn Bhd ( T) 70% 100% 100% Repute Ventures Sdn Bhd ( V) Unibase Jaya Sdn Bhd ( H) Unibase Trading Sdn Bhd ( U) 86% 100% Repute Construction Sdn Bhd ( P) Repute Corporation Sdn Bhd ( D) 100% Crescendo Commercial Complex Sdn Bhd ( A) 70% Unibase Pre-Cast Sdn Bhd ( H) 4

5 Group s Performance for the Past 3 Years *2Q 2010 Revenue (RM 000) 74, , ,020 79,143 Profit Before Tax (RM 000) 25,121 32,233 44,030 14,844 Profit After Tax (RM 000) 18,552 23,805 33,985 11, Share Capital (RM 000) 143, , , ,071 Shareholders fund (RM 000) 319, , , ,728 Earning Per Share (sen) PE Ratio (times) N/A Return on Capital Employed 5.8% 5.4% 7.8% 2.6% Return on Shareholders equity (Pre-tax) 7.9% 9.2% 11.2% 3.7% Return on Total Assets (Pre-tax) 5.7% 6.3% 7.3% 2.5% Gearing (times) Margin - Profit Before Tax (%) - Profit After Tax (%) Note: * Based on unaudited 6 months results ended 31 July

6 Dividend Payment Ratio (Times) *2Q ,366 22,866 31,317 10,264 7,554 8,094 9,658 **3,489 Dividend (Sen) Dividend Yield (%) Dividend Pay-out (%) Market Price (RM) NTA (RM) Profit Attributable (RM 000) Net Dividend Declared (RM 000) Based on unaudited 6 months results ended 31 July ** An interim dividend of 3 sen less tax, based on paid up capital as at 31 July (Source: For 2007, 2008 & 2009, the market price is based on The Star as at 31 January 2007, 31 January 2008 and 31 January 2009 respectively.) 6

7 Analysis by Segments REVENUE PROFIT Margin 2009 *2Q *2Q *2Q 2010 (RM 000) (RM 000) (RM 000) (RM 000) % % Property Development & Construction 215,394 55,890 38,386 13, Manufacturing & trading 72,944 24,349 6, Management services & others 13,003 5,647 6,794 3, (98,321) (6,743) (3,147) (54) (764) 146 Unallocated expenses (2,315) (905) Finance cost (1,562) (1,764) 44,030 14, Less: Inter-segment eliminations Unallocated income/ (loss) TOTAL 203,020 Note: * Based on unaudited 6 months results ended 31 July ,143 7

8 Results by Segment (FY2009) REVENUE Manufacture of concrete products 24% Management services and others 4% Property Development & Construction 72% 8

9 Results by Segment (FY2009) PROFIT (EBIT) Manufacture of concrete products 13% Management services and others 13% Property Development & Construction 74% 9

10 Development Landbank Project /Taman Distance Status from JB Type of Development * Tam an Perindus trian Cem erlang 16km Approved Indus trial/ Com m ercial * Des a Cem erlang 16km Approved Res idential/ Com m ercial 127 Approved (i) Approved (i) Mixed Mixed km Approved Res idential 67km Pending finalis ation of layout plan Res orts / Mixed * Tam an Dato Chellam 18km Approved Res idential/ Com m ercial * Nus a Cem erlang Indus trial Park 30km Approved (ii) Indus trial 352 * CLSB Land 18km Approved (iii) Mixed 222 Bandar Cem erlang 20km * - Tebrau, Johor Bahru - Kota Tinggi * Tam an Tiram Jaya Am bok Development Land (Acres) 156 Total development land as at 31 July 2009 (i) (ii) (iii) Final conversion and subdivision approval Out of which 165 acres were acquired and the balance with development right with option to purchase. Development right through the Privatisation Agreement. * Land within the boundary of Iskandar Malaysia (formerly known as Iskandar Development Region) is approximately 1,773 acres ,093 10

11 PROPERTY DEVELOPMENT 11

12 Location of Landbank CLSB Land 12

13 Location of Landbank CLSB Land 13

14 Nusa Cemerlang Industrial Park (NCIP) 527 acres of gross industrial development land forming part of Bandar Nusajaya has been approved for development of approximately 353 units of factories. NCIP will be developed into an industrial park. Main infrastructures such as rail, port and major highway are all in place nearby. The Iskandar Regional Development Authority ( IRDA ) will spearhead massive new development in South-Western Johor into a major commercial, residential and industrial hub. 14

15 Nusa Cemerlang Industrial Park (NCIP) (Cont.) To date 99 units of detached and semi-detached factories with Gross Development Value of RM231 million have been launched. 63 units of detached and semi-detached factories with Gross Development Value of RM174 million have been sold to date. 15

16 Competitive Advantages of NCIP Foreign investors and industrialists, especially those from Singapore, will be interested to invest in the cheap freehold medium industrial properties of NCIP in view of its proximity to Singapore which is merely 10 minutes drive from Tuas Singapore through the 2nd Link. Also, compared to light industrial land, medium industrial land at NCIP can accommodate a broader range of manufacturing industries. Top management of Singaporean industrialists who set up factories at NCIP will also have easier and more efficient control over their manufacturing operations. 16

17 Competitive Advantages of NCIP (Cont.) Skilled and unskilled workers are available from nearby housing estates and the established townships close to NCIP. Liberal immigration policy allows expatriate positions where there is a shortage of trained Malaysians to fill the required posts. Enhanced security features with only 2 entrances which are guarded and a wide perimeter main drain surrounding NCIP will effectively deter trespassers and provides security. 17

18 Competitive Advantages of NCIP (Cont.) NCIP is close to Tanjung Pelepas Port and easily accessible to Pasir Gudang Port, Tanjung Langsat Port and Jurong Port. It is also close to Singapore Changi International Airport and Changi Airport and there is easy access through Second Link to Customs, Immigration and Quarantine Complex (CIQ). It is next to Gelang Patah Interchange that links to all national highways. With good connectivity, a lot of time can be saved in the transportation of raw materials and manufactured products. 18

19 Competitive Advantages of NCIP (Cont.) Water Supply 6.2 million liters per day water of WHO standards with a 25 million liters concrete storage reservoir upgradeable to 50 million liters. Power Supply 24-hour electricity supply available from TNB with transmission voltages of 500kV, 275kV, 132kV, 66kV and distribution voltages at 33kV, 22kV, 11kV, 6.6kV, 0.415kV. 19

20 Competitive Advantages of NCIP (Cont.) Telecommunication NCIP area is serviced by Telekom Malaysia (TM) and Time Dotcom Bhd through a network of fibre optic cables. Telekom Malaysia (TM) nation-wide network ensures extensive international connectivity bringing the convenience of communication technology to industries. Waste Disposal NCIP is connected to the existing 50,000 PE central sewerage treatment plant which is upgradeable to 150,000 PE. 20

21 Location Plan of NCIP 21

22 Layout Plan of NCIP 22

23 Industrialists at NCIP Industry* Country of origin Engineering Malaysia, Germany Metal plating Malaysia, Germany Metal stamping Malaysia Corrugated packaging Malaysia Machinery Singapore Oil & gas equipment manufacturer Malaysia Rubber manufacturer USA Bio-tech Malaysia Injection molding Singapore Food Singapore Air conditioner Singapore Confectionery Malaysia Garment Malaysia Can manufacturer Korea Gypsum board Malaysia Pets food manufacturing Britain Electrical components Singapore Printing Germany 23 *Type of Industries operating at NCIP as at 31 July 2009

24 Industrialists at NCIP (Cont.) 24

25 Industrialists at NCIP (Cont.) 25

26 Industrialists at NCIP (Cont.) 26

27 Industrialists at NCIP (Cont.) 27

28 Industrialists at NCIP (Cont.) 28

29 Industrialists at NCIP (Cont.) 29

30 Design Features of NCIP NCIP factories are designed and built to meet the high expectation of the buyers. As such, several features are incorporated into the design such as:- Aluminium Composite Panel & High Reflective Glass to the front facade Eave Height of 9 meters for Detached Factories & 8 meters for Semi-Detached Factories Upmarket facade - projection of good corporate image 0.5mm Metal Roofing with Rock wool insulation 30

31 Design Features of NCIP (Cont.) Floor Hardener to the production area Detached Factory surrounded with Concrete Driveway Detached Factory with built-in TNB Sub-Station Wide access road 31

32 Bandar Cemerlang (BC) 1,390 acres of landbank near Ulu Tiram to be developed into a self-contained new residential/commercial development. township of We expect to commence construction of infrastructure and earthwork in 4th quarter FY2010. Such earthworks are to be completed in 15 months time. Phases 1 & 2 to commence in FY2013. Estimated to generate RM2.5 billion of revenue over years. 32

33 Layout Plan of BC 33

34 Taman Perindustrian Cemerlang (TPC) 16km from Johor Bahru, 30km from Senai Airport and 16km from Singapore. Among the largest industrial parks in Johor. A 600 acres industrial park which is expected to house some 900 factories once fully developed. To date have completed 764 industrial units worth RM733 million. 34

35 Desa Cemerlang (DC) Located next to TPC. Self-contained township containing some 6,900 units of mixed development. To date, have completed 4,584 units worth RM533 million. 35

36 Layout Plan of DC & TPC 36

37 CLSB Land A mixed development of residential and commercial premises on acres of land. Main access and reclamation works will commence soon and is expected to complete before the end of FY2011. Comprises 2,413 units of residential properties, 290 units of shop offices and approximately 50 acres of commercial land. The land is a water front project located in a prime location within Iskandar Malaysia and very near Johor Bahru. The new highway from Johor Bahru to Pasir Gudang through CLSB under 9 Malaysian Plan will shorten the traveling time from city centre to CLSB land significantly. The distance of approximately 18km from JB to CLSB Land will take 20 minutes. th 37

38 Layout Plan of CLSB Land 38

39 Taman Dato Chellam (TDC) 37.6 acres of mixed development land acquired on 12 May Located opposite to TPC and DC. Ready for immediate development which will certainly enhance earning capacity of the Group. This project is expected to generate about RM120 million in revenue over a period of 5 to 6 years. 34 units of double storey terrace house & shop office with Gross Development Value of RM11.3 million have been sold to date. 39

40 Layout Plan of TDC 40

41 Location Plan of Ambok Resorts This land has been zoned for mixed development and it is possible to start developing this land in 10 years time into a retirement homes cum mixed development project. 41

42 Concrete Manufacturing 42

43 Concrete Manufacturing Contributed 24% of group revenue and 13% of EBIT respectively in FY2009. We expect a positive contribution in revenue and profit from this segment for FY2010 in view of the new infrastructure projects in Iskandar Malaysia area. Operates 2 ready-mixed concrete plants with a total capacity of 140 cubic m/hr. These 2 plants also manufacture u drains, concrete pipes/culverts, piles and other precast concrete products for the export market. Concrete plant and other concrete products cater for both in-house and external needs. Sales to external parties is approximately 91% or RM50.9 million in FY2009. The contract sum of projects undertaken during this year is about RM10 million. Potential projects under negotiation total about RM32.5 million. 43

44 CONSTRUCTION 44

45 Construction Activities Undertaken by Unibase group, which commenced activities in August Contributed 30% of group revenue and 9% of group EBIT in FY2009. Undertakes both in-house and external contracts, with external contracts under Repute Construction Sdn. Bhd. The contract sum of projects undertaken during this year is about RM20 million. Potential projects under negotiation total about RM18 million. 45

46 STRENGTHS 46

47 Strengths Established brand name We have established our brand name in Johor property market. Good response for our products. Value added features like better landscaping, gated community, etc. Main developer of integrated industrial park in Johor. Sufficient and strategically located landbank Total gross development land of approximately 3,093 acres (inclusive of development rights over 187 acres of gross industrial land) will keep CCB Group busy until the next decade. 47

48 Strengths (Cont.) Sufficient and strategically located landbank (Cont.) Located in close proximity to Singapore, Johor Bahru, Pasir Gudang and Senai Airport, the land banks currently under development are within the boundary of Iskandar Malaysia which will benefit from the Government s proposed development expenditure of RM12.2 billion under the 9th Malaysia Plan. Due to the close proximity of NCIP to Tuas in Singapore, it is anticipated that there will be significant relocation of Singapore industrialists to NCIP to take advantage of the lower land cost, lower operating, utilities charges and capital expenditure. Such close proximity to Singapore will also facilitate the management of the operation by the Singapore industrialists after the relocation. 48

49 Strengths (Cont.) Integrated operation The residential, commercial and industrial lots are competitively priced since the construction is undertaken by in-house construction companies. Consequently there have been repeated sales through introduction of new buyers by existing customers. Capable Management Top management has almost 30 years experience in property and construction industry and is quick to identify and capitalize on opportunities and trends in the property market as well as identify commercially viable projects for diversification. 49

50 Strengths (Cont.) Financial Strength Healthy balance sheet: net gearing at only 0.36x. The strong financial position of CCB Group allows for prepurchase of building materials and pre-building of properties to mitigate the impact of rising building material prices on development costs. This will result in better profit margins for the Group. 50

51 COMPETITIVE ADVANTAGES 51

52 Competitive Advantages Iskandar Malaysia covers 2,217 square kilometers of land in South Johor and is the key engine of growth identified under the 9MP. Iskandar Malaysia has attracted US$11.96 billion of investments in the last 24 months and has almost achieved its US$13 billion overall foreign direct investment target for the phase ending in As the government had provided adequate world class infrastructures to woo more foreign investors to invest in the area, we are optimistic of the success of Iskandar Malaysia. There are large foreign direct investments into this region especially those from Singapore, in view of the spiraling property prices in Singapore and to take advantage of the various Iskandar Malaysia incentives. 52

53 Competitive Advantages (Cont.) Malaysian property remains one of the cheapest in the region - The availability of contiguous and sizeable land in Malaysia gives Malaysia a competitive cost advantage in terms of land prices. Competitive utilities and manpower cost - The utilities and manpower cost of Malaysia is among the cheapest in the region. Proposed tax incentive (Budget 2009) - The employment income of a Malaysian and foreign knowledge worker residing in Iskandar Malaysia is to be taxed at 15% indefinitely. 53

54 Competitive Advantages (Cont.) Potential Appreciation of Land Value Initiatives by Johor State Government/ Khazanah to attract international property developers, operators and investors to invest in the property in Iskandar Malaysia will lead to a big jump in property values, especially land with international development potential. Due to the close proximity of NCIP to Tuas in Singapore, it is anticipated that there will be significant relocation of Singapore industrialists to NCIP to take advantage of the lower land cost, lower operating cost, utilities charges and capital expenditure. - Such close proximity to Singapore will also facilitate the management of the operation by the Singaporean industrialists after the relocation. 54

55 Competitive Advantages (Cont.) Synergistic and Integrated Operations In-house construction, civil engineering and building materials division offers synergistic benefits. The integrated building and civil construction work ensure that building and construction works are of consistently good quality and completed on time at low costs. The in-house building materials trading arm ensures timely supply of building materials at competitive prices. BC, DC and TDC are located close to one another, consequently the overall management overhead will be lower. 55

56 BUSINESS OUTLOOK 56

57 Business Outlook The first half of FY2010 was a relatively challenging period with uncertainty in the global economic environment and credit crunch problems. However, for the second half of FY2010, the property market is making a strong comeback with renewed buying interest on expectation that the economic downtrend is bottoming out and relative stability of the job market. profit The Group expects the industrial and commercial development operations to remain as the main 57 contributors for the Group in FY2010.

58 Business Outlook (Cont.) The business outlook for Crescendo Group in the medium to long term is expected to be good for the following reasons: Good rental market The rental market for industrial properties is expected to be good as it can cater for industrialists who are not prepared to enter into sales commitment due to the economic slow down. Malaysian property remains one of the cheapest in the region The availability of contiguous and sizeable land in Malaysia gives Malaysia a competitive cost advantage in terms of land prices. Attracting international property developers, operators and investors to invest in the Malaysian property sector will lead to increase in property values, especially land with international development potential. The Malaysian real estate remains attractive in terms of price stability, value and potential appreciation. Prime Location - Out of our total landbank of 3,093 acres, 1,773 acres of our converted landbank is located within the prime Iskandar Malaysia area. 58

59 Business Outlook (Cont.) Improvement in residential property market - Although the demand for residential property is currently slow due to oversupply, we believe this scenario will change in a few years time. in view of the scheduled opening of the Integrated Resorts project in Singapore in 2010 as well as the various developments within Iskandar Malaysia. These developments will create significant employment opportunities for the JB residents and inmigration workers from other states. This large population of young employed will be ready to purchase their residential homes in the Iskandar Malaysia area where our projects are located. The Government is currently further liberalising various sectors of the economy as measures to boost it in the face of the global recession. All property transactions including those between foreigners and non-bumiputeras will no longer require the Foreign Investment Committee s approval. 59

60 Dividend Policy Dividend Policy Rewarding shareholders with minimum dividend payout of 30% of Net Profit After Tax and Minority Interests. For FY2010, expected to maintain a gross dividend of at least 7%. 60

61 Near-Term Prospects Total committed sales for FY2010 up to 31 October 2009 is RM94.2 million, out of which new sales committed this year is RM56.4 million. Total revenue recognised up to 31 July 2009 is RM50.8 million. The Group expects the Group to remain profitable for FY

62 Near-Term Prospects (Cont.) Development for Financial Year 2010, 2011 and 2012 (Period covered: 1 Feb 2009 to 31 Jan 2012) Development Type Unit available / launched Unit GDV RM m La unche d Proje cts Residential and commercial - Double storey terrace houses - Shop office Industrial - Detached and semi-detached Ne w Proje ct la unche s Residential and commercial - Shop office Industrial - Detached and semi-detached 62

63 Medium-to-Long Term Prospects NCIP will be the main contributor to future Group earnings in the next few years. We will complete the main access and reclamation works for CLSB Land by FY

64 Medium-to-Long Term Prospects (Cont.) An interchange providing access to the Bandar Cemerlang development via the Johor Bahru-Kota Tinggi highway is presently under construction and is scheduled for completion together with the Johor Bahru-Kota Tinggi highway by end of Phase 1 & 2 of Bandar Cemerlang will commence in FY2013 and this project is expected to contribute positively to the revenue and profit of the Group. The completion of the Sg Johor Bridge project in tandem with the new Senai-Desaru Highway in 2 years time will boost land value of 794-acre landbank in Kota Tinggi. This land has been zoned for mixed development and it is possible to start developing this land in 10 years time into a retirement homes cum mixed development project. 64

65 Medium-to-Long Term Prospects (Cont.) Education Proposed construction of a new campus for our college which is expected to be in operation by FY2011 With the proper campus and hostel facilities, the college will be able to attract foreign students Total project cost of the new campus is expected to be approximately RM6 million 65

66 STRATEGIES 66

67 Strategies scaled our For the residential and commercial operations, we have down our launches this year and concentrate on selling existing stock. The Group s focus now is on the development of industrial properties as the demand for residential property is currently slow due to oversupply and economic slowdown.the demand for the commercial properties is good and the Group will continue to invest in this sector but in smaller phases so as to be conservative. There will be more emphasis on residential and commercial sector in the medium term when we start to develop Bandar Cemerlang and CLSB Land. 67

68 Strategies (Cont.) The Group will continue its strategy of selling substantially built and completed buildings as the Group has received strong demand from customers preferring to buy substantially built/completed buildings. We also have pre-built factories for rent to industrialists. Given the lower cost environment, we are confident of significant demand for rental market at NCIP by foreigners who are currently operating in higher cost areas. The Group will provide wider array of ready built property choices according to market demand Large detached factories and landed commercial properties to attract purchasers from Singapore Smaller semi-detached factories for both the local and foreign purchasers Affordable houses (<RM250,000) Quality & modern design shop offices at populated areas 68

69 THANK YOU Questions & Answers Session Telephone number: address: 69

70 APPENDIX 70

71 CORPORATE FACT SHEET Listed On: April 8, 1997 (Main Board) Issued Shares: mil (31 October 2009) Par Value Per Share: RM1.00 NTA/Share (31 July 2009): RM2.56 Estimated Free Float: 25% or 38.8m shares Market Capitalization as of 31 October 2009: RM169 mil Major Shareholders: Sharikat Kim Loong SB (64.02%) (18 June 2009) Public Smallcap Fund (2.57%) Public Far-East Property & Resorts Fund(2.38%) Financial Year End: 31 January 71

72 CORPORATE FACT SHEET (Cont.) Corporate Address: Lot 18.02, 18th Floor, Public Bank Tower, 19, Jalan Wong Ah Fook, Johor Bahru, Johor, Malaysia Telephone number: Fax: Website: 72

73 BOARD OF DIRECTORS Name Position Gooi Seong Lim Chairman & Managing Director Gooi Seong Heen Executive Director Gooi Seong Chneh Executive Director Gooi Seong Gum Executive Director Gan Kim Guan Senior Independent Director Yeo Jon Eeyo Jon Thiam Independent Director Tan Ah Lai Independent Director 73