ABLEGRP (7086) - ABLEGROUP - A Golden Turn

ABLEGRP (7086) - ABLEGROUP - A Golden Turn

ABLEGRP ABLE集团 7086 ABLEGROUP BERHAD

Sep 3, 2014

The year of 2014 had finally saw the fruits of turn around specialist - Dato Tiong Kwing Hee, blossom into beautiful fruits as 2 of his flagship company, Ecofirst Consolidated Berhad and AHB had finally saw the needed restructure that will put both the company back on the right track again. Previously, Dato Tiong had restructure a terribly messed up Mercury Industries Berhad into a good dividend paying company till date.

While the story of Dato Tiong Kwing Hee had already seen fruits of labor, it had came to my attention in another turnaround specialist - Dato Allan Lim Kim Huat after buying up 25.19% stakes in Ablegroup (Then called Gefung at 2009).

Dato Allan Lim had been well known as the pioneer of Mont' Kiara along with his sidekick, Dato Tong Kooi Ong, during the era of "Sunrise Berhad". Their vision had brought tremendous changes and transform Mont' Kiara into another level of living standard. One of the flagship accomplishment during their rule in Sunrise (before the merger with UEM, now UEM-Sunrise) had been the 28 Mont' Kiara project that had been international recognized and bagged in the "Best International High Rise Development" in the Year 2010.




Dato Allan Lim definitely had his undoubtedly track record when it comes to properties development. His current company, Ablegroup, had underwent a huge transformation and had finally come to it's blooming stage now.

Let's have a quick outlook at Ablegroup latest price movement.

Ablegroup had been consolidating at the range of RM 0.145 for a period of time after seeing some active trading in the middle of July 2014. The consolidation had saw a saturation and will be looking to see a new set of fresh volume into the company share as Ablegroup prepares to challenge above uncharted territory above the 20 cents region. A quick outlook will see that Ablegroup will be penetrating above their current resistance level at RM 0.16 in a strong manner in the coming days.


Ablegroup - A Remarkable Turn

Ablegroup, previously named Gefung, had been a prominent player that is engaged in the processing of high quality marble and granite products. Back then, Gefung is one of the top 10 player in China that is engaged in the manufacturing, and top 3 in Shanghai. However, due to stiff competition in China, Gefung had been recording losses from operation in China. All is not too late when Dato Allan Lim appear as a major shareholder, and later becoming the managing director of Gefung to restructure the company. After the disposal of Shanghai Ge Fung Marble Granite Co Ltd, Ablegroup is now all set for a remarkable turn under the lead of Dato Allan Lim as he will drive the company into a high end niche market property developer.

While doing so, Dato Allan Lim had not been putting a loose check in Ablegroup's current operation as well. Under Dato Allan Lim, he had been choosy in who to supply, as they are looking for customer with better trading terms to avoid default or bad paymaster. However, although after putting up a stringent screening, Ablegroup still had a a healthy book order of more than RM50 million for it's marble & granite division.

The latest 2Q FYE 2014 had saw a drastic increase in revenue. Although the result are still tiny, Ablegroup upcoming quarters will not be shy of showing it's strength.

Up Coming Catalyst

Ablegroup, under wholly owned subsidiary Atlas Rhythm Sdn Bhd, had underwent a land purchase in 2012 with Eden Quest Sdn Bhd. Currently, Atlas Rhythm Sdn Bhd is holding the 1.214 hectares (approx 130,680 square feet) of freehold land in Mont' Kiara.

This piece of strategic land is located at the western side of northbound Jalan Kiara 3 in Mont' Kiara area.

It is about 13 kilometers to the north west of Kuala Lumpur City Center. According to sources, this development will be the flagship development of Ablegroup under the helm of Dato Allan Lim with a GDV of approx RM 1billion. The project had been in plan for 2 years with features that is quite comparable with it's previous success - 28 Mont Kiara. With Dato Allan Lim track record in delivering what is promised, the project will be just another hotly hunted development. Currently, the company is in the advance stage of the planning, and Ablegroup had been informed of it's approval in it's delivery order for the project.

To spice things up, it had been officially known that Daiman will be in JV with Rainbow Crest Sdn Bhd to develop a 12.31 acre land in Plentong which will resemble the Publika in Mont' Kiara which is around RM 1.4 billion in GDV. While Ablegroup is Dato Allan Lim listed vehicle, there are definitely good chances for Ablegroup benefiting from the construction supplies.



I believe Ablegroup will be a good company to be invested in after a series of restructuring that had been done by Dato Allan Lim. Dato Allan Lim will transform Ablegroup into a high end niche market property developer. At the current price of RM 0.155, Ablegroup will be an interesting company to be invested in based on
- Ablegroup streamlining it's operation by selling off loss market arm in China
- Focusing in good quality customer for the marble and granite division.
- Transforming into a high end niche market property player under the helm of Dato Allan Lim which comes with a proven track of record.
- Mont' Kiara project to garner an approximate GDV from RM 750million to RM 1billion.
- Ablegroup being the closest listed entity by Dato Allan Lim for the JV with Daiman in Johor.

I believe that Ablegroup will be easily challenging RM 0.20 in the short term outlook. A break above RM 0.20 will put Ablegroup into the uncharted territory. Under Dato Allan Lim helm, Ablegroup will be looking to shine even brighter this time. A longer term outlook will see Ablegroup trading at RM 0.50 as more interesting development unveils in Ablegroup.

Bone's short term TP: RM 0.25

Cheers and have a nice day
Regards,
Bone

3 September 2014
http://bonescythe.blogspot.com