We attended a site visit hosted by Aspen (Group) Holdings Limited (“Aspen”) to its flagship project Aspen Vision City (GDV: RM10bn) on Mainland Penang, a few of their other development sites and a sales gallery of its ongoing and pipeline projects on Tuesday, 17 January 2018. We also met with the President & Group CEO, Dato’ M. Murly, and the Chief Financial Officer, Christopher Looi, who shared with us more on the Group’s developments and insights on the Malaysian property market.
Listed on the SGX Catalist Board on 28 July 2017, Aspen (Group) Holdings Limited is a Malaysia-based property development group that develops affordable residential and mixed development properties. The Group’s flagship project, 245-acre Aspen Vision City (in Bandar Cassia, Batu Kawan, Penang, Malaysia), is the result of its joint-venture partnership with Ikea Southeast Asia (Ikea) (through owner Ikano Pte Ltd).
Site Visit Highlights
1. Aspen Vision City (AVC) to create new communities and opportunities
2. Benefiter of enlarged focus on affordable housing
3. Strategic partnership with Ikea
No stock rating or price target provided, as we do not have coverage on Aspen.
Peer Comparison – Aspen is trading at a lower P/B than industry average
Aspen currently has four ongoing projects and four in the pipeline. We visited the sites of two ongoing projects – Tri Pinnacle (Penang Island), Vervéa (AVC), Villuxe (AVC), and a showroom for Vertu Resort (AVC).
Figure 1: Aspen’s projects laid out on a map of Penang
Figure 2: Highlighted portion shows the JV structure between Aspen and Ikea
Ikea, through Ikano Pte Ltd, owns the remaining stake in AV City and Bandar Cassia Properties
Projects at a glance
Figure 4: Total GDV of ongoing projects stand at RM2.17bn, with RM1.1 bn in unbilled sales that is expected to be recognised over next 3 years.
Figure 5: Total GDV of pipeline projects stand at RM2.09 bn. HH Park and Viluxe slated to launch in the next two weeks.
Figure 6: In addition to its development projects, Aspen also has in its portfolio the remaining site area of AVC as land bank, the Bandar Cassia Shopping Centre, as well as a few land developments.
Value-add packages to boost affordable home return
Affordable housing scheme plays well to Aspen’s business model
Figure 7: Johor currently has the highest proportion of unsold units in Malaysia (17%) followed by Selangor (14%), Penang (13%) and Kuala Lumpur (12%)