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Logo of Phnom Penh Post newspaper Phnom Penh Post - Industrial park looks to expand its land bank

Industrial park looks to expand its land bank

Phnom Penh SEZ Plc, which operates a 357-hectare industrial park on the outskirts of the capital, is considering land purchases throughout the Kingdom and investment beyond its borders in an effort to boost its land bank, the company’s primary source of revenue.

Hiroshi Uematsu, the company’s CEO, said during an investor presentation on Wednesday that the company was continually looking to expand its real estate portfolio as a way of securing future revenue.

He said the company was seeking to acquire new property around its existing special economic zone (SEZ) in Phnom Penh, and to increase the size of a 53-hectare plot near Poipet that has been earmarked as an SEZ.

“We are seeking expansion in Poipet . . . and always searching for our next destination,” Uematsu said. “[We are also considering] how to export our business model to neighbouring countries.”

A disclosure document for the company’s initial public offering on the Cambodian Securities Exchange (CSX) revealed the company has already invested in developing an industrial park in Laos.

In 2013, Phnom Penh SEZ commenced its acquisition of a 20 per cent stake in Savan-Japan Development Co Ltd (SJD), though incorporation is still pending.

Phnom Penh SEZ has invested $260,000 as of end-2014 in the joint venture company, which aims to develop Site B in the Savan-SENO Special Economic Zone (SaSEZ), an industrial park in Savannakhet.

“Site B of SaSEZ, is planned to be constructed on an approximately 20-hectare area of land at a cost of $1.5 million and the construction is expected to be completed by 2016, where it could accommodate up to 10 factory lots,” the disclosure document said.

Phnom Penh SEZ generated $23.4 million in consolidated revenue and $5.9 million in net profit in 2014, the latest full year on record.

“We expect the commencement of operation of SJD . . . to provide an additional source of revenue,” the document added.

Phnom Penh SEZ announced its timeline this week to be the fourth company to list on the CSX. Subscription will be held on May 17-19 following a bookbuild, with trading expected to begin on June 13.

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Don Rennie's picture

Dear Cam,

All of the talk about PPSEZ is laughable for a listing on the CSX. Why?

1. This listing is basically a penny stock.

2. The disclosure document provided limited financial data.

3. The CSX has no bond (debt) issues.

4. Real estate land values are considerably overpriced.

5. The cost of this listing represents about 10% of the issue raising capital and this is very high. Listing fees can be as low as 1%. Average fees are 5%. For example, Facebook's listing fees were 1.1% of the capital raise.

6. The high cost of this issue's listing can mean that the stock is not liquid.

7. Cambodia contains "country risk."

8. On average, a total of 10,000 shares trade each day on the CSX.

Based on the forgoing, being a part of the CSX is child's play by any reasonable standard.

DR

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