MUI BERHAD – THE HIBERNATING GIANT WITH DEEPEST HIDDEN VALUE

MUI BERHAD – THE HIBERNATING GIANT

“Many Shall Be Restored That Are Now Fallen;  Many Shall Fall That Are Now In Honor.” – —- Horace.

MALAYAN UNITED INDUSTRIES BERHAD was founded in 1960.  It has widely diversified investments in Hotel, Travel & Tourism, Insurance, Departmental Store like Metrojaya,  Stock Trading Firm,  & Food Manufacturing.

Above all MUI Berhad own Highly Valuable Assets in hotels, factories, offices, condominium, lands & houses All Over Malaysia & UK & USA!

In its heyday, MUI Bhd was once traded as high as RM24. The ‘Darling’ of Stock Traders & Analyst in KLSE at one  time. It has gone out of favor and fallen on hard times.  It once owned MUI BANK,  which was sold & renamed Hong Leong Bank today.

The Share of MUI Bhd, together with its Sister Companies Or Subsidiaries : MUI Properties, PMI, PM Capital, PM Holding & PM Corp, have all Fallen More Than 90% of its Value!

Rumor Mongers have said, “Tan Sri  Datuk Khoo Kay Peng sold MUI Bank. Took the money and invested in UK Hotels”‘ MUI Group bet on the Wrong Horse – Tengku Razaleigh!” You cannot touch MUI Group of Companies – they are really lousy. One By One They Go into PN 17.” PN 17 also stands for Prison No. 17.

That could mean execution – the doorway to delisting! And with the unfortunate news of divorce proceedings in UK, share prices have continued to fall lower and even lower! With  so much bad publicity and negative sentiment-how to buy? You should only sell.

Only Sell? Definitely not! We have turned bullish on MUI Group. Why? These Are The Reasons To Accumulate MUI Berhad:-

No. 1) HIDDEN VERY EXTREMELY  HIGH VALUE ASSETS.

MUI Bhd owned highly strategic properties in Prime, Prime Locations. Highly profitable Businesses like Metrojaya. High Value Attire Manufacturer like Laura Ashley in UK. And they are All Grossly Undervalued.

Take CORUS Hotel,  Jalan Ampang KL,  for a case study.  In the 2012  Annual Report of MUI Bhd:  CORUS Hotel was Valued at RM62 Millions. It Is A 13 Story Hotel sitting on Freehold land of 7,289 sq meter.

One sq meter equals 10.764 sq ft. So 7,289 sq meter is 7,289 x 10.764 = 78,458 sq ft. A piece of land was just transacted for RM3,300 psf last week. The highest price done in KL Because it is located very near to Petronas Twin Towers.

Now we know the value. CORUS Hotel is just across the road from Petronas Twin Towers. It should also be valued at RM3,300 psf. So CORUS Hotel land is 78,458 x 3,300 = RM258.9 Millions! Wow! The Underlying Land is valued at Almost RM260 Millions! What about the Value of the 13 Story CORUS Hotel?

Any Property Valuer Out There In KL?  And What About The Existing Business Of The Hotel? We have been to PM Corp AGM for 3 years. Years 2010, 2011 & 2012 were all held in CORUS Hotel. And everytime we were there, business is so good – 70% to 80% occupancy.

Our Intrinsic Value for CORUS Hotel is RM450 to RM500 Millions! Computed from Land Value, Hotel Building & Existing Business. Book Value RM62 Millions Only. Why? Look carefully at the Annual Report (IT WAS LAST VALUED IN 1982 – 31 One Years Ago!!)

At Half Billion Ring-git,  Value Has Gone Up 8 Times In 31 Years.  This is Only One Of MUI Berhad Many, Many, MANY, MANY  UNDERVALUED ASSETS!! You see, I am Shouting Out Its Value For All To See.

No. 2) UNFURLING SAIL TO CATCH TOURISM WIND IN 2014.

VISIT MALAYSIA YEAR.  Yes! In Four Months’ Time Is VISIT MALAYSIA YEAR Again.

MUI Berhad has Hotels For Tourists to stay in, Travel & Touring Agencies To Bring Them Around. Metrojaya Departmental Stores  for them to shop.

Insurance To Protect them (their loved ones) when traveling around.  And Food Like Tudor Gold, Tango & Crispy Chocolate to buy. MUI Berhad will   benefit from Increasing  Tourist Arrivals.

No. 3) UNLOCKING OF VALUE THROUGH ASSET DISPOSAL

This is a new trend in MUI Group. PM Corp (4081) has sold off all Bank Of East AsiaShares, Johan Shares & The Woodland Factory (S’pore) for RM38.5 Millions.

While MUI Berhad has Sold Off George Kent Shares. PM Corp is Proposing Capital Reduction & CASH DISTRIBUTION

The Impending Announcement Of CASH DISTRIBUTION From PM CORP will draw attention to ALL MUI GROUP COMPANIES! AND THE UNLOCKING OF VERY, VERY VERY HIGH VALUE ASSETS BY PUBLIC OPEN MARKET SALE WILL CAUSE INVESTORS TO SIT UP & PAY ATTENTION.

MUI BERHAD – THE HIBERNATING GIANT WILL WAKE UP AT LAST!

INVESTMENT MAXIMS:

“TO BE GREEDY WHEN OTHERS ARE FEARFUL, AND TO BE FEARFUL WHEN OTHERS ARE GREEDY.”

“BUY AT THE FUNERAL – SELL DURING THE WEDDING.”

“BUY AT THE SOUND OF CANNON – SELL AT THE SOUND OF THE TRUMPET.”

“SELL WHEN KLSE WAS AT ITS EUPHORIC INDEX 1332 – BUY DURING EXTREME DESPAIR & PESSIMISM DURING ASIAN FINANCIAL CRISIS WHEN KLSE WAS At INDEX 262.”

“BUY SINGAPORE AIRLINE SHARES (SIA) AFTER 911 WHEN TWIN TOWERS CRASHED AND ALL TELEVISIONS  SHOWED 2 PLANES CRASHED INTO TWIN TOWERS A MILLION TIMES.”

BUY WHEN THERE IS PANIC & FEAR & WHEN BLOOD IS ON THE STREETS.

HOW TO BUY? HOW TO GO AGAINST HUMAN EMOTIONS?

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Why invest in Johor now.

Why Invest in Johor Now?

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Why Invest in Johor Now?

Lately, there are plenty of negative news from declining growth numbers in many countries (especially China and Singapore) to declining investments, impaired currency exchange rates, lower commodity prices and increasing job losses.

The Star newspaper recently reported that Petronas Chemicals Group Bhd scrapped a giant elastomers project worth US$1.3bil as part of the Refinery and Petrochemicals Integrated Development (RAPID) project in Johor.

Moreover, although the Ringgit has regained some strength in the market (trading at 2.90 to the SGD), an oversupplied oil market and slower demand for fuel continue to pose great pressure on the currency.

So why invest in Johor now?

As the only state linked to the third largest financial centre in Singapore, Johor has been catching up with synergies long overdue. The good bilateral relation between Malaysia and Singapore established by the Prime Ministers of both countries has given Johor tremendous advancement momentum.

While other states in Malaysia suffer from lower trade receipts, tourism spending in Johor has increased with the strong Singapore dollar.

The state will also see better transportation links to Singapore in particular via the Causeway and second link. Both countries are meeting in June for their yearly leaders’ retreat which is expected to progress transportation links further. The MoU for high speed rail links has been reported to be signed then.

One more exciting prospect is having direct air links to China. This will begin soon between Senai Airport and Guangzhou, China. The AirAsia route will be expected to bring in thousands of wallet-padded Chinese tourists to Johor.

Johor also has a relatively low population density.  With large growth in business, Johor will see a greater influx of workers and talent from other states in the near future.  This new migrant population will need housing and services. It means existing home owners will see greater demand for rental returns.

Across the causeway, Singapore economy continues to restructure. Many companies both large and small will look to move operations to lower cost destinations. Johor with its vast land and good links will be the single biggest beneficiary.  Many individuals especially Malaysians working in Singapore will look at Johor as the secondary home base either for recreation or retirement.

There has been little academic research on this future trend.  But I am certain that Johor will be the first port of call for both companies and individuals alike.

I believe many buyers do not study enough the future housing demand for rental.  Most buyers just buy what they can afford without evaluating other risks.  This is logical but inadequate. Mass buying causes developers to react in reciprocation. For example, many small or mini apartments were sold in the last few years to cater to affordability.  Sadly, equally many were returned to developers when fear set in.

You need to buy a good property when you can afford it.  Migrant workers and retiring Malaysians will not live in small cramped apartments. Many prefer better quality homes which mean securing places with facilities in a good neighbourhood.

As prices continue to increase, it is still much better to buy earlier than later.

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