COUNTRY Heights Holdings Bhd’s (CHHB) ability to pivot to the digital realm – even to the extent of becoming an integrated digital landlord – will reinvigorate the company’s long term prospect.
Since the appointment of Datuk Jared Lim Chih Li as the company’s managing director back in September 2020, TA Securities Research said CHHB has laid out multiple plans to integrate its existing real estate businesses with technology.
For the uninitiated, Lim is the son-in-law of CHHB’s founder and executive chairman Tan Sri Lee Kim Yew. He is married to Lee’s eldest daughter Datin Dian Lee Cheng Ling who has carved a name for herself as an entrepreneur-activist since becoming a central executive committee (CEC) member of the Malaysian United Democratic Party (MUDA).
“The property segment is expected to be more robust in coming years with deliberate plans to monetise circa RM300 mil worth of assets in the form of completed properties including the sale of Mines Wellness Suites (gross development value [GDV]: RM180 mil) and College Heights Estate (GDV: RM85 mil),” projected analyst Jeff Lye Zhen Xiong in a non-rated company update.
“Starting with CHHB’s crown jewel which is the Mines township, plans are underway to turn Mines into a smart city connected via a Mines Smart City app and the upgrade of its infrastructure.”
Meanwhile, CHHB’s wellness division which is also located in the Mines has also begun its expansion plans to develop a complementary medicine hospital and a confinement centre. “These are expected to raise the overall value of the township where CHHB still has a significant land bank,” opined TA Securities Research.
The research house is also particularly upbeat about CHHB’s ability to secure a collaboration and licensing agreement with JD.com through Beijing Wodong Tianjun Information Technology Co Ltd.
“E-commerce is identified as the disruptor of the next decade with CAGR (compound annual growth rate) of 18% in Southeast Asia,” noted TA Securities Research.
“We believe leading the new retail development of JD.com in Malaysia via an omni-channel model to be called JDMines will allow CHHB to tap the outsized opportunity of e-commerce and the overall digital economy.”
All-in-all, TA Securities Research reckon that CHHB could gain investors’ interest over time as the transformation exercise signals a turning point for the group. The research house values CHHB at RM1.95/share based on sum-of-part (SOP) valuation.
“(This) is driven by New Retail (ascribed with four times sales in line with the average traded valuation of companies focusing on fast growing digital economy); property (discounted realisable value by 65% as CHHB’s lands have significantly low cost base); and healthcare & others (ascribed with 25 times earnings which is lower compared to average healthcare peers valuation of 29 times),” added TA Securities Research.
At 9.51am, CHHB was down 2 sen or 1.46% to RM1.35 with 145,500 shares traded, thus valuing the company at RM400 mil. – April 22, 2022
