The domestic property sector has yet to regain its lustre after the previous boom, having suffered a slowdown for five years.
The Covid-19 pandemic has only worsened the situation, as property developers had to cease operations temporarily because of the lockdown measures. On top of that, they are facing a labour shortage and there were no sales to be made as their sales galleries were closed owing to the Movement Control Order.
Against such a backdrop, waning interest in property stocks in recent years is no surprise, with many of them seeing their prices on a downward slope.
Yet, YNH Property Bhd’s share price has managed to buck the trend, rising nearly 32% from RM1.42 on March 30, 2018, to RM2.81 on March 31, 2021, giving its shareholders a return of 26.3% over a three-year period.
For that, YNH Property has emerged the winner of The Edge Billion Ringgit Club’s Highest Returns to Shareholder award for property companies with a market capitalisation of RM3 billion or below.
The property stock had a strong rally between April and July 2019, when its share price soared from RM1.15 to RM2.79. Since then, it has been hovering in the tight range of RM2.60 to RM2.80.
The stock closed at RM2.75 on Dec 8, giving the company a market capitalisation of RM1.426 billion. YNH Property was trading at 1.6 times its net asset value of RM1.68 per share based on the prevailing share price.
In comparison, the Kuala Lumpur Property Index (KLPRP) had an average price-to-book value of 0.45 times.
It is worth noting that YNH Property chairman Datuk Yu Kuan Chon was actively trading the company’s shares almost daily between April 1 and Aug 31, 2019. Yu, the largest shareholder of the company, made 80 transactions involving 59 million shares during that period. As at May 19, 2021, he held a 32.58% stake, according to the company’s FY2020 annual report.
The property firm’s earnings had been volatile over the three financial years, FY2018 to FY2020 ended Dec 31. Its net profit grew from RM15.6 million in FY2018 to RM41.08 million in FY2019 but contracted to RM6.8 million in FY2020.
YNH Property, which was set up in Sitiawan, Perak, has ongoing projects in the state, including the Pusat Perniagaan Manjung Point 2 and Pantai Remis Taman Bintang projects. It has a remaining 700 acres of undeveloped land bank in the Manjung Point Township.
YNH Property owns parcels of land that have often been talked about. One of them is its 95 acres of land bank in Genting Highlands adjacent to the Genting Highlands Resort.
According to its FY2020 annual report, the proposed development on the 95 acres includes commercial units, bungalows, a condominium and retail units, estimated to have a gross development value (GDV) of RM1.96 billion.
The first phase of the proposed development, which has an estimated GDV of RM700 million, will see the group developing a 35-storey serviced apartment building.
YNH Property says it is in the final stages of planning and aims to launch the project in 2022, subject to prevailing market conditions.
The company also owns a three-acre tract of prime land in Jalan Sultan Ismail, opposite Concorde Hotel and dubbed Menara YNH. It has already obtained an approved development order for the project, which will comprise an office tower and mall.
Besides that, it has a six-acre freehold development in Mont’Kiara called The Kiara 163, which has a total GDV of about RM1 billion, and a development in Dutamas consisting of three blocks of serviced apartments, with a total of 1,159 units.