Tortie Portfolio: Plenitu - 11July2006
Thursday, July 13, 2006
PLENITU (5075) closed high at RM1.49 today, achieving a stunning 22% half year gain. Its highest price on 2006 was RM1.72 on the 3/5/2006, which was a nice-looking market condition before the global market adjustment. Follow by the correction, PLENITU dropped to RM1.33 and then has bounced back and still at its uptrend now.
Despite the RHB research today has downgraded call for PLENITU from BUY to HOLD based on the underweight stance and expectation on an imminent economic slowdown in 2007, we still maintain our BUY call for medium and long term. The reason is simple: strong balance sheet (RNAV of RM4.21, PE of 4, healthy EPS growth), attractive cash-in-hand (RM0.44/share) and enormous land bank (can keep the company busy for next 10-15 years).
Yesterday, PLENITU has just acquired RM25.96m worth of land at Pulau Penang. We see this as a proof that PLENITU is still keep on its strategy of accumulating land banks for future development. With a huge land bank, the future profits should be more guaranteed and sustainable. Based on the RHB research, due to its previous abandon status, the land was sold at 13% cheaper than the estimated market value. Moreover, PLENITU will not assume any liabilities from the previous project. This land is definitely a good buy.
posted by winpulse @ 12:46 PM,
