SYCAL (9717) - Sycal - Point of Perak

Sycal Ventures Berhad (Sycal - 9717) might had caught the attention of some investor after seeing the emergence of new substantial shareholder through investment vehicle WestHill Capital Sdn Bhd as of lately. To recap, Sycal primarily involves in construction activities, and is a major construction proxy towards the upcoming development in Perak.

Perak - An Upcoming State

Perak is full of potential, considering with over 5 million acre of land and 10 administrative district covering various industry and communities. Under PKNP, future development in the state will focus in creating integrated township and develop plan with the ultimate goal of raising overall socio-economic and intrinsic values in the area.

Riding on the development in Perak, Sycal will continue to benefit from planned development in Greentown Ipoh, Klebang Ipoh, Taiping, Sitiawan, Segari and Sri Iskandar Perak, which can see a potential GDV of more than RM 1.2 billion.

Business with Accor Group

Sycal had significant business ties with the Accor Group that manages world wide hotel chain under the brand name like Pullman, Novotel and Ibis Hotel. To put this in simple terms, Sycal is the closest proxy towards the expansion of Pullman Hotel in Malaysia.

Currently, Sycal is constructing the ICC (Ipoh Convention Center) which feature a 21 storey Pullman Hotel and 23 storey Pullman Residences in Ipoh.

The current progress is at level 15.

According to Gerrard Guillouet which is the senior vice president for Accor Malaysia, Malaysia is one of the top tourism destination in Southeast Asia, hence there are still potential and plenty of room for the group to expand.

Accor Malaysia will continue to expand into region like Malacca, Penang, Johor and Sabah. The Accor Group run a travel booking site that promote their own brands of hotel and food under the site name AccorPlus.

Technical Outlook

On a medium term outlook, Sycal could had broken away from the down trend chart with a flow of strong volume recently.

The strong rebound on the floor price at the range of RM 0.31 could be marking a new trend in the making. Sycal next resistant should sit at RM 0.40.

The current price could mark similar entry price for substantial shareholder Westhill Capital Sdn Bhd during 2 November 2015. Westhill Capital should had purchased the block of shares at the price of RM 0.40, which is 40% discount on the NTA of RM 0.75

The latest open market buy in had saw Westhill Capital taking in more than 3 million shares from the open market, pushing their direct stake to 9.3%.

We continue to believe in the more robust infrastructural development in the state of Perak. Political influences will play a key role in development of Perak as deputy prime minister Dato Sri Hamid pushing Perak to more key development.

Baring unforeseen circumstances, Sycal will be able to perform well in 2016 with the progress billing on existing construction book order of RM 500 million, as well as potential RM 1.2 billion GDV in future township development in Perak.

TP : RM 0.45

SYCAL (9717) - Sycal - Point of Perak