YNH in a major corporate makeover

YNH  Property Bhd, listed on Bursa Malaysia in 2003 under its former name Yu Neh Huat Bhd, started out as a plantation company in 1982 before it ventured into property development.

The group’s real estate business took off in 1987 in Sitiawan, Manjung and Lumut, Perak, where YNH’s ongoing bread-and-butter project — the RM3.12 billion Bandar Manjung Point township is located.

In Kuala Lumpur, YNH’s projects include Lot 163 Suites, a mixed high-rise development on a 0.4ha freehold tract in Jalan Perak, and the Ceriaan Kiara condominium on a 1.2ha freehold site in Mont’Kiara.

YNH’s move into healthcare is worth noting. In February 2009, the property developer signed a memorandum of understanding (MoU)  with hospital operator Pantai Holdings Bhd to build and lease a private hospital in Sri Manjung, Perak. Under the arrangement, YNH will lease the hospital to Pantai, which will operate it.

Moves by major shareholders and directors to acquire shares in YNH have not gone unnoticed, meanwhile. While the share accumulation could be  perceived as a prelude to bigger corporate moves by board members, the stock purchases, according to the company, were prompted by valuation concerns.

Chairman and executive director Datuk Dr Yu Kuan Chon, and managing director Datuk Yu Kuan Huat have been consistently acquiring shares in the company for about three years as they felt that the stock was undervalued.

The latest filings with the exchange show that Kuan Chon had raised his direct equity interest in the company to 17.4% (from 16.7% on Jan 5), while his brother Kuan Huat’s portion expanded to 11.7% from 10.6%.

On Dec 9, YNH shares rose three sen, or 1.8%, to RM1.73 for a market capitalisation of RM701.94 million.

At RM1.73, the stock was trading at a 44% discount to RHB Research Institute Sdn Bhd’s revalued net asset value of RM3.10 a share for YNH.

YNH’s earnings in the cyclical real estate sector will be closely followed. The group’s healthcare business venture is also worth watching as the developer seeks to build a recurrent income base to ensure earnings stability.

This article appeared in The Edge Financial Daily, December 16, 2010.