BIMB revises Ho Hup's TP to RM2.26 on maiden property project in Myanmar

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KUALA LUMPUR:  BIMB Securities has revised its target price for Ho Hup Construction Co Bhd to RM2.26, following the construction company’s  announcement of its maiden property project in Myanmar.

“We are positive with this move as it represents Ho Hup’s maiden project in Myanmar. We believe this is the best opportunity to scout for other projects in the country,” said BIMB Securities in a note today.

In a filing with Bursa Malaysia yesterday, Ho Hup Construction Co Bhd announced that it would develop a high-end residential property project with a gross development value (GDV) of US$200 million (RM636 million) in central Yangon, Myanmar.

Ho Hup (Myanmar) E&C Co. Ltd (HoHup), a 70%-owned subsidiary of Ho Hup Construction has entered into a Joint Venture Agreement (JVA) with Zaykabar Company Limited (Zaykabar) to develop the “Z Villas 191 Units Land” located in Mingalardon Garden City.

HoHup will have sole and exclusive right to develop the land and in return to Zaykabar as the land owner, HoHup have to pay the land cost and share 60% of net profit to Zaykabar.

From the JVA, Zaykabar will be entitled to a sum of cash equivalent to the aggregate of the land cost which is pegged at US$40 per square foot (psf) and shall have 60% of the total net profit of the project.

“GDV of the project is expected to be around US$200 and first launch will be by mid Nov 2014.

“Therefore, we are leaving our FY14 forecast unchanged and revised our earnings projection for FY15 higher by 11.6% to RM110.3 million from RM98.8 million,” it said.

As at 12.25pm, Ho Hup’s share price is unchanged at RM1.46.