KUALA LUMPUR: While its flagship development Bandar Saujana Putra, located south of Kuala Lumpur, is expected to continue contributing to the group for another three to five years, LBS Bina Group Bhd is now set to undertake another major development.

This time the project is located north-west of the city — in Ijok, near Kuala Selangor.

LBS managing director Tan Sri Lim Hock Sam said Bandar Saujana Putra remains as the main contributor to LBS’ sales, with the 850-acre (343.98ha) township accounting for half of its total sales.

“[But] we need another township for LBS to grow further, to have double-digit growth. Ijok is the one,” he told The Edge Financial Daily. “This development project will have at least 3,700 landed properties, consisting of terraced and semi-dee houses.”

The mixed-development township, to be undertaken jointly with the Selangor government, is estimated to have a gross development value (GDV) of RM3.43 billion over a 12-year period.

LBS’ 51%-owned subsidiary Kemudi Ehsan Sdn Bhd, together with Worldwide Property Management Sdn Bhd, an indirect subsidiary of Perbadanan Kemajuan Negeri Selangor, last month entered into a development rights agreement with Menteri Besar Selangor (Incorporated) for the development on 10 parcels of leasehold land in Ijok, collectively measuring 909.01 acres.

The GDV (excluding Rumah SelangorKu units) of Kemudi Ehsan’s five parcels of land (about 470 acres) is RM1.83 billion.

Lim said another property developer, Eco World Development Group Bhd (EcoWorld), which has launched the first phase of its new township in Ijok, has received a good response.

EcoWorld is also banking on Ijok, where it has planned a 1,400-acre township with an estimated GDV of RM15 billion.

Lim said landed and affordable houses, priced between RM400,000 and RM500,000, are still the selling products.

He expects the Ijok project, which LBS plans to launch in the middle of next year, to be another earnings’ tool for the group from next year onwards.

Another major development project LBS is banking on is its 640-acre Dengkil township development.

“We will have 400 to 500 units of landed houses at an affordable range. We plan to launch this in the third quarter next year. We will launch apartments at a later stage of the development. The concept is similar to Bandar Saujana Putra,” he said.

In a note dated Aug 29, CIMB Research estimated the land’s potential GDV to be more than RM2 billion.

Another major project to be launched by LBS next year is a residential development in Bukit Jalil. Comprising 1,360 units of Perumahan Penjawat Awam 1Malaysia and 1,342 units of medium-cost apartments, it has a total GDV of RM1.29 billion.

Year to date (YTD), LBS has recorded total sales of RM906 million. Lim is still confident that the group’s target of RM1.2 billion sales can be achieved by year end.

Last year, LBS achieved record-high property sales of RM1.03 billion. Its unbilled sales as at July 31 were RM1.25 billion.

Meanwhile, LBS’ announcement last month of streamlining its construction business under its 51.18% subsidiary ML Global Bhd, has put the two counters under the spotlight.

LBS has proposed to dispose of its indirect 75% equity interest in MITC Engineering Sdn Bhd (MITCE) to ML Global for RM225 million, to be satisfied via the allotment and issuance of shares to its indirect wholly-owned subsidiary MITC Sdn Bhd.

MITCE has some RM1.52 billion order book with current total contract value of about RM1.06 billion yet to be billed.

Lim, who was appointed as ML Global’s managing director in July, said MITCE has been receiving invitations from government agencies and the private sector to tender for construction jobs.

“LBS should focus on its core business, which is property development. Therefore, another vehicle is needed for the construction business,” he explained.

“We [ML Global] will be selective in tendering for government and private sector construction jobs as the main focus will still be on LBS’ jobs. ML Global is currently bidding for RM600 million worth of jobs. By year end we will know the results,” said Lim.

“I will sit on the board of ML Global for another one or two years, but I am not running the company. This is to make sure ML Global is in the right direction, creating value for LBS’ shareholders eventually,” he added.

ML Global shares rose 0.5 sen or 0.64% to 78.5 sen last Friday, with a market capitalisation of RM70.36 million. YTD, the counter has risen 74.4%.

On the international front, Lim viewed LBS’ 60%-owned unit Zhuhai International Circuit (ZIC) as a long-term investment. Its plan to transform ZIC into a tourist spot with hotel, theme park and commercial components is awaiting approvals from the authorities.

LBS shares closed two sen or 1.11% lower at RM1.78 last Friday, with a market capitalisation of RM1.13 billion. The price has been on a gradual upward trend despite the gloomy property market. YTD, LBS has risen by more than 31%. In comparison, the Bursa Malaysia Property Index has only risen 2.14%.

Bloomberg data showed the counter has five “buy” calls, with an average target price (TP) of RM2.02. The TP range is RM1.87 to RM2.23.