Eastern & Oriental Bhd (3417)

Buy 1 and get 3

It is a great deal fo any buyer who can get 3 different businesses by buying into 1 stock? If you think so, you may consider about this stock - Eastern & Oriental Bhd.

The 3 different businesses

Hotel
First of all, E&O has a very strong brand name hotel which is located in Penang Island. You may go to anywhere of Penang Island and simply ask anyone, they will know where is the hotel. It is one of the greatest hotel you can find in Penang. E&O Hotel is ready to capitalised higher revenue due to Tahun Melawat 2007 next year.
Meanwhile, it has another hotel which situated in Batu Ferringhi - Lone Pine Hotel. Although it is not as famous as E&O Hotel, it definitely has its own class as well. Once again, it is a very nice hotel that you can find in Batu Ferringhi.

Property
E&O owns more than 70% shares of E&O Property Development Berhad (EOPROP). I believe I do not need to spend much time to write about the introduction of EOPROP. They pride themselves as a developer that caters to the needs of everyone,building premium homes in establishedneighbourhoods.
Their current projects include Dua Residency, Seventy Damansara, Idamansara, The Peak and Seri Tanjung Pinang. It enjoy great sales of all the mentioned projects. Seri Tanjung Pinang is an important project which will contribute to EOPROP result in the future. Construction is very active at the project site at this moment. How much land can you find in a small island like Penang? Let us wait and see how much can Seri Tanjung Pinang project contribute to EOPROP. As far as I know, the cheapest property that available in Phase 1 of the project costs about RM800k. EOPROP managed to convert the land from leasehold from freehold as well.
Looking at all the projects of EOPROP, it has been always my dream to own 1 unit property in each of them. I like Dua Residency and Seventy Damansara the most.

Construction
Putrajaya Perdana Bhd (PPB)is the construction arm of E&O. E&O holds an aggregate direct and indirect interest of about 51% in PPB. Putrajaya Perdana’s current book order exceeds RM1.2bil and the company is undertaking several projects such as MARC Service Residence, Pavilion Kuala Lumpur, Kolej Universiti Teknikal Kebangsaan Malaysia in Malacca and Zero Energy Office for Pusat Tenaga Malaysia.

Recent News

Its shares surged to a high of RM2.01 a few weeks ago, following reports that the company might be taken private. However, E&O has issued not 1, but 3 announcements that no plan for the privatasation at this point.
Its share price is moving sideway in the past 2 weeks, within the range of RM1.83 to RM1.90. It closed at RM.187 at the point of writting.

Undervalued

Do you always think that your investment in stocks is equivalent to your cash? I would consider that as you can always sell your stocks investment easily in the market and receive the proceed after a few days.
If that is the case, E&O is undervalued seriously. Its holdings in EOPROP and PPB worth at least 20% more than the current value of E&O.
Big investment company from US, The Goldman Sachs Group International has been buying into E&O since early of December. It has emerged as the substantial shareholder of E&O, with 20,690,100 unit of shares which represent 5.89% of total E&O shares.

Conclusion

Buy 1 and get 3. Isn't a good deal for the investors who are looking for the value in long term?