SINGAPORE (Jan 2): Yoma Strategic recently awarded of the construction contracts for two major Yangon developments and completed the sale of its tourism-linked businesses.
The two events show the conglomerate’s intention of growing its core businesses of food, motor and property while streamlining its non-core operations, says OCBC in a Tuesday report.
On Dec 26, Yoma announced it has completed the proposed sale of its tourism-related businesses on 26 Dec through a RTO of SHC Capital Asia which has been renamed as Memories Group.
Memories will operate the Balloons Over Bagan, Hpa-an Lodge and Pun Hlaing Lodge businesses, among other offerings.
Memories also plans to expand its portfolio through acquisitions of tourism-related businesses and will also actively identify new destinations that may be developed into future tourism attractions.
Approximately 167.1 million new consolidated shares have been allotted and issued by Memories to Yoma at 26.3 cents each, representing 54.1% in the enlarged issued and paid-up share capital of Memories.
“Following the proposed compliance placement taken by Memories, the latter will become an associated company of Yoma. We note that Memories has launched a compliance placement of up to 50 million shares at a price of 25 cents each,” says lead analyst Joseph Ng.
According to the World Travel and Tourism Council, Myanmar’s visitor exports are expected to nearly double to reach US$5.2 billion ($7 billion) in 2027 from US$2.3 billion in 2016.
Separately, Yoma announced at end November it has awarded Bouygues Construction and Taisei Corporation the construction contracts of Yoma Central and The Peninsula Yangon.
The combined contract value of the two projects is over US$400 million ($532 million) for civil, structural, architectural, mechanical, electrical, plumbing and heritage preservation works.
“We are encouraged by the involvement of two global construction companies, as the hotel and residences in the two projects have been designed with an element of luxury in mind,” says Ng.
“We maintain our “hold” rating and our fair value estimate of 55 cents.”
Shares in Yoma are trading at 54 cents or 28.4 times FY18 forward earnings.
