KUCHING: Hunza Properties Bhd (Hunza) aims to capitalize on the firmer property sales in the Penang area as a result of sustainable and encouraging property sales at the second half of the last financial period.
OPEN OPPORTUNITY: Gurney Paragon. The condominium has achieved a take-up rate of 58 pct.
OSK Research Sdn Bhd (OSK Research) said in its report cited that recent buying activities on the island’s high-end condominiums segment were sustained by domestic real demand.
It observed that the positive sentiment was driven by the improving property sales and encouraging pick-up in construction works on Gurney Paragon where Hunza reported significantly better number for the first half of this financial period.
Meanwhile, Gurney Paragon achieved a take-up rate of 58 per cent which was up from 55 per cent in the first quarter of its current financial period.
On the other hand, Hunza’s beachfront resort condo, Infinity and the condominium Alila both in Penang, recorded impressive performance of 75 and 99 per cent from 71 and 94 per cent respectively in the first quarter of the current financial year.
However, OSK Research noted that Hunza would faced challenges for its Klang Valley projects due to an imminent oversupply of condominiums.
Furthermore, the research report said Hunza was making a three-for-ten rights issue with free detachable warrants on the basis of one for every one rights share.
This was foreseeable taking into account the need to raise funds for Hunza’s ongoing projects although this might result in the dilution of potential earnings of some 25 per cent for the year 2010-2011.
On the same note, OSK Research highlighted that the market had ascribed a 14.5 per cent premium on Hunza’s free detachable warrants against the current trading price and the fair value ascertained making the rights overvalued.
As a result OSK Research upgraded its ex-rights target price from RM1.10 per share to RM1.27 per share.