Tebrau Teguh

While going through my collection of old reports from investment houses, this 2006 research paper from UOB Kay Hian attracted my attention. The report was on Iskandar Development Region (IDR) also known as South Johor Economic Region (SJER), which is the main southern development corridor in Johor. Area involved is about 2216 sq. km. 3 times the size of Singapore and 48 times the size of Putrajaya. The area is as shown below.

Major players are UEM Land, Khazanah, Tebrau Teguh, Danga Bay, Mulpha International, Gamuda, SP Setia and many others. Amongst these players, Tebrau Teguh own the best and the last piece of large landbank near Johor Baru. The land measuring some 1,012 acres with a gross development value of RM7.9 billion. Its land is 'super-prime' for several reasons:
(a) It is one of the last big tract of undeveloped landbank near Johor Baru, it is within 5 km of Johor Baru City Centre.
(b) It has 12 km of water front.
Tebrau Teguh (42% owned by Johor State Government) has won a Rm303 million contract recently from the Johor State Government to construct 2932 units of low cost apartments in Johor Baru to relocate squatters affected by eastern dispersal link highway.

UOB Kay Hian used RNAV (Realisable Net Asset Value) approach to project the targeted stock price for Tebrau Teguh.
(a) Based on Bayan Lepas, Penang Mixed Development land of Rm30 per sq. ft, price target is Rm 1.80.
(b) Based on Mixed Development in Damansara of Rm60 per sq ft. the price target is Rm3.77
(c) Based on Johor Baru City Centre Commercial Development of Rm110 per sq. ft, the target price is a fantastic Rm7.06 (Hard to believe).

(d) Based on Singapore's Rm 300 per sq ft the target price is Rm 19.56 (wah !!!!!!!!). I purely report what was stated in UOB Kay Hian 2006 papers. But of course I would be very very very happy if it can reach Rm 19.56 because Rm 55,000.00 investment (100,000 shares) can turn into Rm 1.956 million. (Fantasy)

The above long-term wave count indicates that the 30 cents low on October 2008 for Tebrau Teguh is likely to be the bottom. Refer to the 6-month chart below, Tebrau Teguh has completed its wave I and wave II by middle of March 2009. It is currently in wave III and so far it has completed sub-wave 1, 2 and sub-sub-wave i-ii-iii-iv. Sub-sub-wave v has started since last Wednesday. Friday closing was 55 cents with very high volume. Minimum target at this moment based on 1.618 times of 'wave I' magnitude, wave III is likely to reach 74 cents.