Furniweb carefully looking at more JVs in property development

PETALING JAYA (Jan 26): Furniweb Industrial Product Bhd (FIPB) which is in talks with a few parties to establish joint ventures in property development, is taking a cautious stance in selecting its partners.

According to  Datuk Lim Heen Peok, FIPB's (Fundamental: 1.05; Valuation:1.20) group chairman, the company has  been approached by many companies proposing  joint development of new projects in the Klang Valley and outside of the Klang Valley.

“We have many suitors. Our approach is careful and selective, not only on location and types of development. We want to do something with quality and do it well,” Lim told a press conference after the company’s extraordinary general meeting (EGM) today.

To date, nothing concrete has emerged  from the talks.

According to Lim,  the company’s “prime strategy” is to establish joint ventures with other parties, such as land owners, which is the business model of its maiden residential development project Picasso.

Meanwhile, Group executive director Datuk Seri Yeoh Soo Ann who is mainly in charge of the property development segment said the company expected revenue from the sale of units in Picasso (GDV RM560million), to come in by year-end.

The Picasso residential development, comprising two 38-storey condominium blocks strategically located at Jalan Jelatek, will be launched by Mar 28. The company is targeting sales of  RM72 million or 60% of the RM120 million from the launch.

Picasso is developed by Premier De Muara Sdn Bhd, a 60:40 joint venture between Premier Gesture Sdn Bhd, a wholly-owned unit of Furniweb, and Almaharta Sdn Bhd.

Despite a softening property market, Yeoh is optimistic demand will remain strong as the company  leveraged on a weak ringgit to draw foreign buyers looking to buy properties in Malaysia.

Apart from the new venture, the company will continue to focus on its core business of  furniture webbing, industrial and safety webbing, covered elastic yarn, seat belt webbing, rubber strips and sheets, and narrow elastic fabrics.

Group managing director Jimmy Cheah said the company's fourth quarter ended Dec 31, 2014 would be  “better than last year”, but he did not elaborate.

Tthe company will also continue to focus on existing operations in Vietnam and Malaysia, with Vietnam holding a lot of potential in the near term.

The company is in a good position as it derives a stable income  from its core business, which could act as a buffer for its property ventures which have longer gestation period, said Yeoh.

Earlier in the EGM, the shareholders agreed to change the name of the company to PRG Holdings Bhd; establish a long term incentive plan of up to 15% of the issued and paid-up share capital of FIPB for  eligible employees and directors of FIPB and its subsidiary companies,  allocate an employees’ share option scheme (ESOS)  options and/or FIPB shares.

Lim said the name change with the emphasis on “premier” was to reflect the company's diversification from its core business into property development.

FIPB traded 2.68% lower at 68 sen at 12pm today, giving it a market capitalization of RM101.4 million.

(Note: The Edge Research's Fundamental Score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. A score of 0 means weak fundamentals and a score of 3 means strong fundamentals. Meanwhile, the Valuation Score determines if a stock is attractively valued or not, calculated based on historical numbers. A score of 0 means valuations are not attractive, while a score of 3 means valuations are attractive.)


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