Hot Stock Brem jumps 15% on undervaluation

by **Cals** Mon 13 Jan 2014, 18:24

Hot Stock Brem jumps 15% on undervaluation

Business & Markets 2014

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Monday, 13 January 2014 14:34

KUALA LUMPUR (Jan 13): Brem Holding Bhd rose as much as 15% after a report by Kwong Wah Yit Poh yesterday highlighted the group’s undervaluation.

At 12.30pm, Brem, a property developer, was traded at RM2.24, up 25 sen or 13% from RM1.99 with some 7.2 million shares done.

The stock which was among top gainers on the exchange, had earlier risen as much as 30 sen or 15% to RM2.29.

Bloomberg data show that Brem shares have advanced 12% so far this year, outperforming the KLCI's 2% decline.

An earlier report by Nanyang Siang Pau dated December 30, 2013 had pointed out the undervaluation of Brem shares.

It said that Brem’s net asset value per share is worth RM8.32 if the group revalues its assets. The report also indicated that Brem has reserves of RM311 million which translate into a possible bonus issue.

The report had recommended investors to “boldly buy the stock to get rich.”

Analysts have said that there may be an upside to the group’s reported book value based on the list of properties it included in its annual report for the financial year ended March 30, 2013.

The list of properties includes a piece of land in Kapar, Klang, which was valued at 4.3 sen psf. The site was acquired in 1994.

Brem also has multiple tracts in Mukim of Batu, Kuala Lumpur, where one of the tracts, PT 25794, is said to be already under development.

More importantly, the average net book value of the eight plots of freehold land covering 34.38 acres (14ha) in the Segambut area appear undervalued at RM73.55 psf.

For comparison, IJM Land Bhd and FCW Holdings Bhd recently bought four parcels of land in Segambut at RM280 psf.