GSB Group Berhad ( 7077 ) formally known as SMSUMMIT
www.gsbsummit.com.my
HISTORYSMSUMMIT core business is providing services to manufacture of CD and cassette tape for the entertainment industry. Prior to the entry of directors related to SIMA GROUP, there were no property development activites within SMSUMMIT. Cassette tape business and CD business was not doing well. In fact cassette tape was a sunset industry and at the same time, many Directors has also come and go and company has become very unstable.
When new management team from SIMA GROUP starts to play a prominant role in SMSUMMIT in 2008 ( now known as GSB ). GSB undergo a massive clean up to get rid of all the loss making business units and at the same time ventures into property development. This effort is now bearing fruits and the latest interim results are showing positive results. Although GSB still retains the CD/DVD business ( now profitable ), they are moving towards a more lucarative property development business. With the SIMA GROUP banner in their properties, the are able to secure a very high take up rate of their properties because SIMA GROUP is well known for being a very reliable property developer that produce very high quality properties.
At the moment GSB have 2 small projects in hand. As you can see from the photos, both and near completion.
1. Laman Ara Utama in Bandar Utama.
http://www.sima.com.my/index.php?option=com_content&view=article&id=43&Itemid=50
May 2011
2. Courtyard Villa @ Taman Bentong Makmur in Bentong.
http://www.sima.com.my/index.php?option=com_content&view=article&id=46&Itemid=61
May 2011
These properties looks very attractive, they also have very practical designs and of very high quality. These two project will give you an idea what type of properties that they are capable to produce in the future. It does not show any signs of novice developer, it shows a signs of a very experienced property developer... You must be wondering what is going on ? How do they do it ?
The answer is.. the SIMA GROUPWho is SIMA GROUP ?Although very low profile, SIMA GROUP Group is a very reputable construction and property player in the country and has been around for about 40 years. They are well known for their quality of work and also being a very trustworthy property developer. Although low profile, do not under-estimate SIMA GROUP because they are handle any forms of property development projects and are able to compete with any big property players in the country in terms of capabilities and quality. Try study their properties from their website how well they design their properties ( www.sima.com.my ). The only trouble I see with them in the past is funding limitations of being a private company, thats why they never grow beyond of what they are today. I am very sure they are aware of it and that leads them to have a listed unit, GSB.
I also noticed that they have a Scholarship programme, although small matter but this is a sign of a strong and rich company that emphasize alot on the quality of their workers. Alot of people overlooked the importance of high quality workers, for me this is very important because these are the people who will decide the future of any company. A good company can be run into the ground with lousy workers but a bad company can be turned into gold by good capable workers.
You can also look at this old article about the SIMA GROUP :
http://www.theedgeproperty.com/news-a-views/4912-cityacountry-sima-group-banks-on-sincerity-to-grow.html
SIMA GROUP OFFICIAL WEBSITE :
www.sima.com.my
From SIMA GROUP website, 2 out of their 3 current projects belongs to GSB. GSB has become very significant business unit within the SIMA GROUP. GSB is also the only listed unit within the SIMA GROUP. This is based on the increased shareholding of SIMA GROUP related parties over GSB and also the backing from SIMA GROUP for all GSB property development projects. The only one current property project that not inside GSB is a very impressive project called Kelana Parklane. Although the Kelana Parklane project is not inside GSB, it does not mean GSB cannot do an equally impressive project in the future because GSB has the same capabilities with the rest of the unlisted companies under the SIMA GROUP because they share the same resources.
At the moment GSB is still trading around 10sen, this is very attractive for a fast growing profitable company with such a huge potential ahead and a exceptionally strong brand name SIMA GROUP. GSB is no longer an un-stable loss making company that it used to be in the past, it is now a profitable and financially stable company with a very good management team. GSB currently is still left unnoticed inside KLSE, in the wrong sector ( industrial ). People are still not aware of this transformation. One day when this transformed GSB starts its bold move into the property market with bigger projects, people will start to notice it and its share price will surely get a big boost. GSB is on the route to become a major property player in the country with SIMA GROUP as its back-bone.
Please take note of these date and how SIMA GROUP, slowly seeps quietly into SMSUMMIT taking over the control of SMSUMMIT ( later change name to GSB ). Which is now a vehicle for SIMA GROUP into KLSE. ( you can find all these from www.klse.com.my (http://www.klse.com.my) , look for SMSUMMIT and GSB )
Nov 2005, SMSUMMIT subscribe to 89.47% of Serta Usaha Sdn Bhd from Sima Group
Sep 2006, Annual Reports ( Sep 2006 ): Sima Group Related shareholdings... ( 4.9% )
Oct 2006, Many key directors of SMSUMMIT resigns
Dec 2006, Gan Pik Mui, Gan Book Kat becomes director of SMSUMMIT ( daughter and son of Sima Group owner, both are also directors of Sima Group )
Dec 2006, Change of name from SMSUMMIT to GSB Group Berhad
Feb 2007, Jeffery Ong ( husband of Gan Pik Mui ) becomes Managing Executive Director of GSB
Sep 2007, Annual Reports ( Sep 2007 ): Sima Group Related shareholdings... ( 26.3% )
Feb 2008, GSB acquired the remaining 10.53% Serta Usaha from Sima Group
Aug 2008, Chairman from previous SMSUMMIT management resigns
Aug 2008, Jeffery Ong becomes chairman of GSB
Sep 2008, Annual Reports: Sima Group Related Shareholdings... ( 31.6% )
Jun 2009, Laman Ara Utama Condovilla project launched, 100% sold out.
Oct 2009, Courtyard Villa, Bentong project launched
Sep 2009, Annual Reports: Sima Group Related Shareholdings.. ( 31.6% )
Apr 2010, Banda Industries Sdn Bhd from Sima Group is now 100% owned by GSB
Sep 2010, Annual Reports ( Sep 2010 ): Sima Group Related Shareholdings.. ( 31.6% )
Jan 2011, GSB sold Ritz Garden Hotel for RM22 million in Cash ( Profit RM4.4 million ).
Note: These are Sima Group related parties, Gan Seng Biang ( Sima Group owner ), Gan Pik Mui ( daughter ), Gan Boon Kat ( Son ), Jeffery Ong ( Son in law ), ID D’Art Sdn Bhd, Sun Acres Development... there could be many more that I am unaware of. There is another company Suria Bitara Sdn Bhd which holds 20.12% GSB shares, Suria Bitara has the same business address with SIMA GROUP.There are 2 significant units from SIMA GROUP has already been injected into GSB ( Serta Usaha Sdn Bhd and Banda Industries Sdn Bhd ). Both deals are already completed. They are contributing positively to GSB now and are expected to provide more future income for GSB. Lets look at both of them...
Serta Usaha Sdn Bhd.Serta Usaha Sdn Bhd is acquired from Sima Group for RM9.5 million ( 89.47% in Nov 2005 for RM8.5 million and 10.53% completed in 2008 for RM1 million )
Serta Usaha has 3 main assets,
Refer to KLSE Announcement, SMSUMMIT : 17/11/2005
http://www.klse.com.my/website/bm/listed_companies/company_announcements/announcements/archives.jsp
(1) A 13 storey hotel known as Ritz Garden Hotel, Taman Seputeh, Kuala Lumpur. Very near Mid Valley, rented to 3rd party operator
(2) Freehold commercial land in Bentong 1,999.15 metre square
(3) Two parcels of freehold industrial land, Daerah Kuala Muda, Kedah 22,311 metre square and 39,355 metre square
in Jan 2011, GSB sold (1) Ritz Garden Hotel for RM22 million in Cash.
Banda Industries Sdn Bhd.Banda Industries Sdn Bhd is acquired from Sima Group for RM5 million in Apr 2009
Banda Industries Sdn Bhd comes with following assets,
http://www.klse.com.my/website/bm/listed_companies/company_announcements/announcements/archives.jsp
Refer to KLSE Announcement, GSB: 30/07/2009 ( Page 7 and Page 8 in PDF file )
If you want to know how much all that is worth, please do your own calculation because prices of houses change all the time. Posted in May 2011 ( iproperty ), New Launch of a Semi-D in Bentong is RM788K, you can use that as a benchmark to do your own valuation. http://www.iproperty.com.my/propertylisting/829684/TAMAN_BUKIT_BENTONG_Semi-detached_House_ForSale
(1) Land earmarked for development of 66 units of double storey terrace houses
(2) Land earmarked for development of 20 units of bungalow
(3) Riverville is a proposed high end residential development project 20.6 acres adjacent to the Taman Bentong Makmur
It is expected to comprise the following developments:
- 120 units of double storey terrace houses
- 64 units of semi-detached houses
- 16 units of bungalows lots/bungalows
Banda Industries Sdn Bhd also comes with a JV business with another company Restu Angkasa Sdn Bhd ( Land Owner ) to develop a 52.08 acre land
Known as Bukit Utama next to Taman Bentong Makmur where Banda Industries Sdn Bhd land are
Comprise the following developments:
- 233 units of double storey terrace houses;
- 34 units of semi-detached houses; and
- 80 units of bungalows lots.
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FinancialsFor safety reason, lets look at whether this company is financially stable or not.
Bank borrowings vs Cash position.Un-manageable Bank Borrowings can bring down a company. Because once you defaulted a bank repayment you will get a nasty classification and this can be very damaging any companies because both suppliers and customers will also be avoiding such companies. So, this is something we must always look into.
Based on the latest financial report, until 31 Mar 2011.
| Short Term Bank Borrowings | = RM1.753 million |
| Bank Overdraft | = RM6.161 million |
| Long Term Bank Borrowings | = RM4.822 million |
| Total Bank Borrowings | = RM12.763 million |
| Cash in Hand plus Fixed Deposit | = RM4.068 million |
So, by just looking at it,
it is Cash RM4.068 million vs Bank Borrowings RM12.763 million. It does not look good especially when GSB has always been known as a loss making company with no future prospects. Probably thats why people are afraid of it and bypass GSB without looking any further.
Most people do not know that GSB has now turned profitable under the new SIMA GROUP management and they also have a new lucarative property development business with a very strong brand name, SIMA GROUP. With SIMA GROUP, we can expect exciting bright future for GSB especailaly in the property development business... because SIMA GROUP is a very reputable and proven as reliable property/construction player that has been delivering good quality properties for the past 40 years.
Even though Cash vs Borrowings position is not a good at the moment, it is still considered as manageable because RM12.763 million is not a very big amount of money.
However
, there is a very significant development in GSB that will change everything; Just recently in Jan 2011, they sold a hotel building which is held under one of their Subsidiary, Serta Usaha for RM22 million in Cash ( RM4.4 million profit ).
Their Cash in Hand will now will be increased to at least RM26.068 million after the sales of the hotel.So it will be RM26.068 million Cash in Hand vs RM12.763 million total Bank Borrowings.With that, we can say GSB is no longer a Bank Borrowing risky counter. GSB will be in a very comfortable cash position and this position will improve further because GSB is also profit making company now and more net cash ( profits ) will be coming in from their other business operations. This, however will not make GSB very rich but enough to keep away the Banks from causing troubles and enough for them to launch bigger projects in the future.
Furthermore, with the completion of Both Laman Ara Utama and Courtyard Villa ( whithin this few month ), more cash will be flowing back into GSB. That will put them in even a stronger position.
Although not fantastic but it is good enough to ensure that GSB will not be in any financial difficulties. Best of all GSB achieve all this from a troubled company without asking a single sen from their shareholders. I believe this will improve further as GSB launch more property projects in the future.
SummaryGSB Berhad ( 7077 ) represents an excellent investment oppurtunity with the entry of SIMA GROUP. GSB have the same attributes of all the other unlisted sister companies within the SIMA GROUP. GSB are now able to build properties under the SIMA GROUP name with the design and built quality of SIMA GROUP. This will ensure a very high take up rate in any project launched by GSB ( already proven by their two project Laman Ara Utama and Courtyard Villa @ Taman Bentong Makmur ).
You can read about Sima Group from http://www.theedgemalaysia.com/property/175417-city-a-country-sima-group-banks-on-sincerity-to-grow.html and www.sima.com.my . You will noticed that SIMA GROUP is a very progressive company with very bright future ahead, GSB is currently the only company in SIMA GROUP that is public listed, we can expect them to become more prominent in the future taking on larger property projects because they have better access to the capital market for fundings and also better image of being listed compared to their other unlisted sister companies within the SIMA GROUP.
Not only being a very reputable property developer for the past 40 years, from Sima Group website you will also noticed that they are investing a lot into human capital by having a Scholarship programme... this programme will enable them to take advantage from some of the smartest people in the country. Just by looking at some of the design of the properties you can immediately sense great progressive minds are at work in the SIMA GROUP. The combination of great progressive minds together with 40 years of technical knowledge/skills and high quality work in the property/construction industries, surely it will have a clear advantage when comes to competition.
And of cos as an investor, you need to protect your investment. Besides capabilities, SIMA GROUP is also well known for the past 40 years for their trustworthiness. With that, you can feel at comfort investing into this company because they are not known to take advantage of the minority shareholders. It has already been proven for the past 4 years, even though they are not in good financial health, they just make use of whatever limited resources they can find in the company and yet still able to turn around the company with 4 years of non-stop improvement... without having to ask for more money from minority shareholders.
Many people have ask, why SIMA GROUP already existed 40 years and yet still not as big some of the major property players. As a private company, as we all know will have funding limitations... it all depends on how their boss take risk to secure funds. This for sure will limit the available funds for their property development projects, that is why SIMA GROUP will not be able grow much even though they are have all the technical capabilities.
They could have continued to operate as a private company, I believe it has to do with his children slowly taking over the SIMA GROUP since the boss is already 66 year old... and these young people are definately more ambitious and are exposed more to the financial market, they will surely try to break the funding limitation by getting SIMA GROUP into the capital market ( GSB ). Now together with the SIMA GROUP 40 years of property development expertise and unlimited funds from the capital market, it is new era for SIMA GROUP via GSB. I would not be surprised they were inject the entire SIMA GROUP into GSB in the future. New asset injection or not GSB is set to go after the big boys.
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Lets look at the Latest Events... everything are pointing at a very positive and promising future for GSB.Latest Financial Results ( 300% improvement ) This is the best results in the past 4 years, both quarterly and also yearly. It also shows that GSB is moving into the right direction with their new property development business. Just look at the data, every single year there are improvement. They are able to achieve all this with the limited cash they currently have. This show us that GSB have a very good management team because with such a tight resources, they are still able to produce such a good progessive results ( 300% improvement vs last year and non-stop progress for the past 4 years )
ProspectsNow with the additional RM22 million from the hotel sales ( RM4.4 million profit already in the pocket ) and the remaining money coming in from Laman Ara Utama and Courtyard Villa in the next financial year, and a RM300 million (estimates based on RM1M for a Bangalow, RM699K for Semi D and RM300K for Doube-Storey Link ) project in Bentong in the pipe-line at a location where I was told many rich people are staying.
Everything looks very promising for a counter which is still trading around 10sen. Apart from these existing projects and confirmed money coming in, GSB also stand a very good chance to secure new projects since they are now part of the SIMA GROUP. SIMA GROUP as a private company will not be able to secure enough funds to handle too many projects, rather than losing projects to competitors, they will definately pump some projects into GSB because GSB has no funding limitations being a listed company.
4 years of non-stop improvement.Full Year ( Profit/Loss )2008 =
-4,765K2009 =
-3,788K 2010 =
-879K2011 = 1,629K = Latest ( improved around 300% vs last year, best result in the past 4 years, turns profitable )4th Quarter ( Profit/Loss ) 2008 =
-3,241K2009 =
-1,161K2010 =
-982K2011 = -306K = Latest ( improved around 300% vs last year, best result in the past 4 years )With the RM22 million cash coming in from hotel sales and more money will be coming in from their two completing, They will end up with alot of cash on hand. Strangely, they have yet to launch any new projects... new project launch is unavoidable, or are they preparing to take over the Kelana Parklane project ? Whatever it is, it will give GSB a big boost. GSB is about to move into a new era... massive potential ahead.
