NWP (5025) - NWP - Grand Shake Up

NWP Holdings Berhad (NWP - 5025) is currently known for it's timber products in Sabah, carrying more than 15 years of history of operation. NWP also offers klin drying, timber treatment, contract logging and contract saw-milling services. While the local timber industry is growing rapidly for the past 1 year with the likes of Focus Lumber, Mieco, Evergreen and Hevea, NWP had been at the darker side of the boom. However, the latest development in the entry of new shareholder could start to spark a new lease of life for NWP.

Dato Seri Nelson Kee
The consortium of Dato Seri Nelson Kee and Marcus Mak from GS Realty Sdn Bhd had altogether took up a combined stake of 17.73% in NWP. Unofficial number would suggest that Dato Seri Nelson Kee with the key team leaders from GS Realty could see more than 30% in controlling stake of NWP.

GS Realty Sdn Bhd is a no stranger in the realm of the real estate market in Malaysia. Started humbly from a corner shop in Mahkota Cheras more than 5 years ago, to date, GS Realty headquarter is situated at Fraser & Neave Business Park at Jalan Loke Yew, with branches in all over of Malaysia.

In the beginning, GS Realty started out in the sub-sales market. However, with the rapid growing property market for the past 4 years, GS Realty had worked with a good number of developers for the sales and marketing of their new under construction properties.

GS Realty is prime sales and marketing to several branded developer such as i-Bhd, Hatten City and KSL, just to mention a few. Albeit the property market condition, GS Realty had achieved a total RM 11.7million sales commission for the month 31st May 2016 (Average of RM 585 million in sales value based on 2% commission). As of to date, there are more than 18,000 agents in GS Realty.

Bringing Real Estate to another Level

It had been the dream and vision of Dato Seri Nelson Kee to bring the arena of real estate into another level. The usual practice of most real estate firm will be focusing on sub-sales market and new development properties that are built by developers. For a real estate agency to be able to sell their own property project is another new level altogether.

While doing so, retaining key people will be utmost important in the real estate industry. With GS Realty owning a public listed entity, this will enable key leaders as well as key sales people to have the opportunity to be part of the owner of the company through shareholding.

With NWP being the public listed vehicle for GS Realty, there will be great beginning and interesting journey ahead.

NWP to see corporate exercise and joint venture

NWP could be looking to see more corporate exercise in the coming days. While balance sheet of NWP is quite clean with borrowing of less than RM 1million, we could be looking at right issue with free warrant as a mean of raising fund for new land acquisition as well as working capital at 2H 2016.

NWP will also be able to see joint venture opportunity with developers for their new launch project, such as i-Bhd.

On a technical outlook, NWP could be looking interesting with a potential breakout on an ascending triangle that could see saturation at RM 0.40 level. A successful break out at the key level of RM 0.40 will then be able to see NWP trading towards RM 0.50.

Although the current fundamental of NWP doesn't support the current price valuation, however, the current changes in the shareholding, foreseeable corporate exercise in raising working capital and for new acquisition as well as new business direction from a proven team of management in GS Realty could breath a new lease of exciting life in NWP.

While on a wild thoughts, should cash cow GS Realty Sdn Bhd be injected into NWP, that will definitely cause a market frenzy. Who knows?

Bone's short term TP : RM 0.50

NWP (5025) - NWP - Grand Shake Up