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Yu Neh Huat to make KL its base


SITIAWAN-based Yu Neh Huat Bhd's presence in the Klang Valley property market will be further strengthened when the group makes Kuala Lumpur its corporate headquarters by 2008.

Steering the group's plans is executive chairman Datuk Dr Yu Kuan Chon who sees the Klang Valley as the country’s fastest growing market, and the place to be for a developer.

According to Dr Yu, it has become “quite necessary” for developers to have a presence in this robust market, especially Kuala Lumpur, in order to join the league of the reputable and leading property boys.

“It is not enough to be the market leader in your home ground although that is a good start for most companies. Beyond those start-up years, if the ambition is to grow bigger in the property game, then the place to be is Kuala Lumpur,” he told StarBiz in an interview.

Having projects in the right addresses and within the vicinity of other high profile developments, especially in the Kuala Lumpur inner city, is an advantage being sought by developers these days. Projects situated in these locations have the power to raise the profile and reputation of these companies.

Maintaining a high profile certainly bodes well for the bottomlines of these companies as most of these projects with good addresses can provide very comfortable margins.

An srtist's impression of the 163 Residence project

Yu Neh Huat's efforts to become KL-focused will pay off handsomely for the group when it sees its revenue and earnings surge in the next six years.

Dr Yu said the group's three projects in Kuala Lumpur - 163 Residence, Wisma YNH and Radiant Kiara - would contribute to 80% of group earnings from financial years ending Dec 31, 2006 to 2012.

Presently, all the group's earnings are contributed by Yu Neh Huat's traditional markets in Sitiawan and Ipoh. The group's bread-and-butter project, Bandar Manjung Point, located on 1,000 acres in the Sitiawan-Sri Manjung-Lumpur corridor, will feature 20,000 affordable homes and commercial properties for a total gross development value (GDV) of RM1.5bil.

About 500 units with sale value of RM100mil are expected to be launched a year. The project, which took off more than 15 years ago, will take another 20 years to complete.

The other ongoing projects are commercial developments in Ipoh - Medan Ipoh and Medan Bercham.

Last year, the three projects in Perak brought in sales of RM110mil and they will continue to register monthly sales of RM300,000 and regular cashflow to the group. Yu Neh Huat's three Kuala Lumpur projects are set to bring in sales.

Marking the group's debut in Kuala Lumpur is 163 Residence in Jalan Perak. With an average price tag of RM800 per sq ft, 163 Residence (comprising 310 serviced residences in a 55-storey block, a retail podium and a 14-storey office block) will yield a total GDV of RM218mil. Since the launch of the serviced residences in February, sales of between 60% and 70% have been achieved. The fully furnished residences with built-up of 450 to 2,500 sq ft are priced from RM800 to RM1,000 per sq ft for a GDV of RM80mil.

Dr Yu said buyers who leased back their units to the company, to be operated as serviced residences by a reputable hospitality group, would be able to reap guaranteed rate of return of 8% per annum for two years. The office block will be sold en-bloc to a corporate buyer.

Yu said the group's Kuala Lumpur developments would have a mix of 70% commercial and 30% residential components in view of their well-sought after addresses.

Two other projects in the pipeline are a condominium development, Radiant Kiara in Mont'Kiara, and a commercial- cum-serviced residences in Jalan Sultan Ismail, with the proposed name of Wisma YNH for the office block and 168 Residence for the serviced suites

Supported by their Kuala Lumpur inner city addresses, both 163 Residence and Menara YNH have the advantage of high visibility and limited supply, which will drive demand for these properties.

Radiant Mont'Kiara, scheduled for launch at the end of the year, will feature 238 condominiums of 1,800 to 2,100 sq ft. The homes will be priced from RM330 per sq ft. Construction is scheduled to kick off next month for completion in 2008.

12,998 Posts
Yu Neh's projects in the city to be main profit earners

WHILE the annual net earnings projection for Yu Neh Huat Bhd has stated figures of between RM23mil and RM25mil for the financial years ending Dec 31 between 2004 and 2006, the property group has maintained an impressive record in its quarterly performance since being listed on the main board of Bursa Malaysia on Dec 9, 2003.

The quarterly net profit figures that came in so far have surpassed the forecasts made in the prospectus by more than 60% on an annualised basis.

With the line-up of more interesting projects in Kuala Lumpur, the group is set to see better times ahead where profit generation is concerned. Yu Neh Huat has also scored points by moving up in ranking in terms of market capitalisation.

The group’s market capitalisation of RM500mil has placed it in the top 20 among listed property groups, reflecting its achievement and potential ahead.

At an average price of RM1.30 a share, Yu Neh Huat's 350 million shares translate to a market capitalisation of RM500mil.

Analysts are confident that Yu Neh Huat's projects and proactive management bode well for the group's earnings, going forward.

An artist's impression of the Wisma YNH and Residence project

A senior analyst with a foreign brokerage said the counter's shares have strong upside potential, given the low price to earnings multiple of eight times.

The group can look forward to a quantum leap in earnings growth these two years as the consensus estimates for its revenue have been projected at RM160mil for the current financial year ending Dec 31 and RM230mil in FY 2006. For FY 2004, it registered net profit of RM38.3mil on revenue of RM114.97mil.

Yu Neh Huat has a strong institutional presence with 60% of its shares being held by institutional shareholders.

It has successfully placed out 65 million shares to approved bumiputra shareholders and the remaining 20 million shares were granted approval recently and will be issued soon.

The group’s land bank profile - that comprises 800 acres in Sitiawan, 50 acres in Ipoh, six acres in Teluk Intan and seven acres in Kuala Lumpur - provides the flexibility for it to serve different market segments through a range of diversified product offerings.

Over these two years, Yu Neh Huat has lined up project launches worth RM1.3bil to RM1.5bil, mainly made up of the Kuala Lumpur projects. This will be the first time projects outside its traditional markets of Sitiawan and Ipoh will be contributing to the group’s bottomline.

Despite being much smaller, the Kuala Lumpur projects, given their high margin, will be the main profit earners, going forward.

Yu Neh Huat believes in doing everything in-house from project designing, construction, sales and marketing to property management.

This model has worked very well for the group as it has translated into the high margin of between 40% and 50% for its projects.

According to Yu Neh Huat executive chairman Datuk Dr Yu Kuan Chon, being self-sufficient would certainly contribute positively to the group’s earnings potential through economies of scale and more efficient cost control.

The lack of supply and improved demand for Grade A office space in the Kuala Lumpur inner city are factors that bode well for the launch of group’s projects in the city.

Besides the good addresses, the two commercial-cum-serviced residences projects also have the advantage of high visibility. 163 Residence Kuala Lumpur is located beside Wisma Hong Leong in Jalan Perak while Wisma YNH is across Concorde Hotel in Jalan Sultan Ismail.

Wisma YNH and 168 Residence have been earmarked for launch in the middle of next year. The 3-acre site in Jalan Sultan Ismail was acquired from Danaharta two months ago for RM63mil. The three-phase project will be completed in six years.

Talks are underway with a few parties to sell the office block en-bloc at an indicative price of RM320mil.

12,998 Posts
choon said:

Although I love the gorgeous Wisma Hong Leong but I always think that is a waste of space. First the location is kinda bad for such a magnificent building....okay....maybe HL can't help it but at least they could make it taller since it is on a prime land. Not to say they aren't rich enuf ma :eek:hno:

With such a rich owner and a good location ...there should be a skyscraper there! :cry:

12,998 Posts
ZaHiRnYa??? said:
But both is located at a different location what :?..and is there any land across Concorde Hotel?

NO need to crack your haed on this is just an artist impression and it shouldn't make sense :D They are just combining the buildings there for fun (or to impress people) I guess :D

Anyway there is a very narrow strip of land across the road from The Concorde (where a Chinese restaurant and Mofaz Exoticar is). I seriously doubt that land could hold such a structure....actually I think the piece of land behind Concorde is a better candidate. But then again who knows leh.......maybe they are cutting into the foothill of Bukit Nanas :?
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