Monday, September 2, 2013

Yoma Strategic : A play on economic growth in Myanmar (CS)

Singapore Discovery Series:
Yoma Strategic Holdings Ltd
A play on economic growth in Myanmar

● We met with Yoma management for an update on the company.

● Yoma is a real estate major in Myanmar, with interests in automotive retail, agriculture and luxury tourism sectors. Yoma believes they are well placed to partner global enterprises now looking to start businesses in Myanmar, but also say real estate will continue to dominate their business mix near term.

● Yoma suggests they will continue development of their three existing property projects, but are also looking to the development of "Landmark" – a mixed use project in Yangon – for near term growth. SPA, a 20% partner in the project is yet to obtain a revised Master Lease Agreement from the govt., post which Yoma may issue a S$100 mn rights at 38 cents a share to finance the project.

● Yoma (through a JV) has recently been unsuccessful in the recent telecom license bids, but is hopeful of participating in the telecom infrastructure space. Yoma has a small stake in the Mandalay development project JV, has a 70% stake in 100,000 acres of (undeveloped) agri land, and is looking at the financial services and transport and logistics opportunities in Myanmar.

Myanmar play
We met with management of Yoma Strategic Holdings (Yoma) for an update on the company. Yoma is a Myanmar focussed real estate conglomerate. It currently has three real estate projects: a) FMI City (465 acres); b) Pun Hlaing Golf Estate (600 acres); and c) Star City (135 acres), and has acquired an 80% stake in the development of a mixed used project in Yangon "Landmark". Yoma also has interests in automotive retail, agriculture and luxury tourism sectors in Myanmar.

Real Estate to remain the core business
While Yoma is on the lookout for new opportunities within Myanmar, the company suggests real estate will continue to dominate its business mix for the foreseeable future. Most real estate operations are in JV with Mr. Serge Pun's companies as that helps Yoma with local execution. Yoma has some undeveloped land (about 400,000 sq feet) in FMI city, and further development in the Golf Estate is likely.

Development of the Landmark project key near term
Serge Pun and Associates (SPA) is in discussions with the government to obtain a Master Lease with renewed terms for the Landmark re-development, which has taken longer than expected. Yoma has recently extended the long stop date in the sales and purchase agreement it has with SPA (for Landmark) to 31 Dec 2013. Yoma plans to issue a S$100 mn rights issue at 38 cents a share to help finance the project, and induct a majority partner for the development of the proposed Peninsula hotel in the complex. In addition, the project is expected to have Grade A office towers, 5 star luxury condominiums, a retail podium, serviced apartments and a business hotel—for a total GFA of about 2 mn sq ft. Yoma expects total construction cost of about US$330-350 mn.

Unsuccessful in telecom bids, part of winning Mandalay airport consortium
A consortium comprising Yoma, Quantum Strategic partners and Digicel group was recently unsuccessful in its bid for a telecom license in Myanmar. Yoma management however suggest that they have secured more than 5000 site leases in Myanmar and have close to 800 people employed in the telecom venture, and hope to participate in the telecom infrastructure opportunity in the country. A subsidiary of Yoma is a 5% partner in a consortium with Mitsubishi to upgrade and operate the Mandalay International Airport.

Automotive distribution, Luxury tourism, agriculture
Yoma is a distributor of Dongfeng trucks in Myanmar and operates a service centre for European automobiles in Yangon. The company has recently opened its first after sales service centre for Mitsubishi motors, and is looking at the possible acquisition of the existing automotive businesses of SPA.

Yoma has a 70% stake in 100,000 acres of contiguous land about 260 km from Yangon, and currently uses about 2000 acres to cultivate Jatropha. The company is looking to partner with regional agri-majors to utilise the rest, and is happy to be a minority partner. Yoma have recently acquired a 75% interest in hot air balloons over Bagan, and plan to construct a hotel on some associated land in the region.
Future opportunities
Yoma believes the financial services opportunity is very large in Myanmar and is looking at ways to participate in growth of the business. The company is also looking closely at the oil and gas services businesses in the country. Yoma has also commenced a few initiatives in the transport and logistics segment.

Source/Extract/Excerpts/来源/转贴/摘录: Credit Suisse
Publish date: 30/08/13

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