Despite the slowing property sentiment surrounding Malaysia, corporate exercises involving company diversifying into property development and construction in fact happen even more frequently this year.
However, most of these corporate exercise falls into company that are struggling to perform in their existing industry, and a diversification could give the company a new light of hope in order to turn the company back into the black.
While there are a few example, some notably successful example on listed companies diversifying into construction had to be Mercury Industries Berhad and Voir Holdings Berhad.
As you can see, for the case of Mercury where Dato Tiong inject his own construction firm into it, the share price appreciated much and shareholder are confident on the diversification that will bring in more benefit. That had been the same case for Voir, and shareholder view the diversification as a good.
While such are the successful case, it had me wondered if this company can also repeat such wonderful feat created like the above 2 example.
So, this company is the little known Bsl Corporation Berhad (Bslcorp - 7221).
This company had been laying on the lower side for the past few years. However, the recent month saw the company share price appreciated as the company start to turn into profit with new manufacturing contracts.
What is interesting is the latest development where Bslcorp had formed a JV with Mr Wong Sze Chien to explore on the property development and construction opportunities.
Albeit the current share price which could be trading at a considerably higher PE, the share price of Bslcorp had been sustainable at the range of RM 0.60, implying that the company had greater plans ahead.
The joint venture will be able to see Bslcorp diversify their income stream and tap into the property development.
According to the latest annual report filling, Bslcorp had a vast land piece at the area of Kundang, which is near Rawang. The land spanning 1214 hectares, which is almost 3000 acre, can be suitable for township development.
Currently, Bslcorp is having a NTA of RM 0.80 per share.
Will Bslcorp break above RM 0.65 and trade higher in the coming days after consolidating at the range of RM 0.60 for more than 6 months ? That depends on how you will see it.