SPB ... Aug10

Selangor properties bhd, one of Malaysia's oldest and most conservative listed property companies, has a 51% stake, or 45.27 million shares in HELP.

Selprop is the largest landowner in the prime Damansara Heights suburb of Kuala Lumpur, where it owns 33 acres (13.2ha) as well as several commercial buildings, including Menara Milenium, Wisma Damansara, Kompleks Pejabat Damansara and 16 shops along Jalan Batai.

It also has a 50% stake in Claremont Shopping Centre project in Perth, and sizeable cash reserves.

Selprop's stake in HELP is carried at very low costs as Selprop invested in the company during the early stages. According to Selprop's annual report for the financial year ended Oct 31, 2009, the cost of its investments in subsidiaries quoted and which refers to its stake in HELP, stood at only RM2.62 million. That is equivalent to a book cost of just 5.8 sen per HELP share.

The market value of these shares then, according to the annual report, was RM70.63 million, which is equivalent to RM1.56 per share. Based on HELP's closing price of RM3.80, Selprop's stake would now be valued at RM172 million.

Compared with its book cost of just RM2.62 million, Selprop is sitting on unrealised gain of RM169.4 million, which is equivalent to 49 sen per Selprop share. The property company has 343.617 million shares issued. Selprop's net assets per share stood at RM4.95 as at April 30, 2010.

Adding the "unrealised gain" of 49 sen per share will imply a revised net asset value of RM5.43, some 43% above the last traded share price of RM3.80. And this does not yet include the revaluation of its own property assets.

The company derives most of its income from the rental of its properties, although the upcoming launch of the Jalan Batai condominiums in Damansara Heights will lift future earnings.