PDC Corp
The Company was incorporated in Singapore on 4 September 1999 and converted into a public limited company under the name of Hong Lai Huat Group Limited on 23 May 2000.The Group is a diversified investment group with interests in construction of residential, industrial & commercial properties, property development & investment, trading of construction equipment & maintenance services, consultancy & business development and technology product, such as multi-media accessories, wireless surveillance system & multi-ledia accessories, wireless surveillance system and intelligent wehicle digital system (IVDS), businesses.The Group has set up companies in Malaysia and East Timor. In East Timor, makepeace Enterprise Pte Ltd was set up to deal in construction and property development and investment. As part of its diversification efforts, the Group acquired regional distribution rights for products dealing in IVDS.The Group subsequently changed its name to PDC Corp Ltd wef 31 July 2002.
Proposed Development of Corn Plantations
On 6th Nov 06, PDC has entered into a cooperation agreement with Regency Government of Toba Samosir for the proposed development of corn plantations, to promote, market hybrid corn seeds in TOba Samosir and to sell and export corn or other type of plants specie on approximately 40,000 hectares of arable lands. The tenure f the land will be not less than 20 years with the rights to renew another 20 + 20 years without payment.
PDC in return shall invest and fund the development of the project to cultivate corn on the land. Also, PDC need to introduce modern agriculture technology and resources, design and construct agriculture infrastructure such as roads and offices and to generate employment opportunities for the locals.
PDC will invest US$50 million over a period of 18 months starting from 2nd quarter of 2007. This is expected to be funded by bank borrowings and equity fund raising.
New Revenue Streams for PDC
This new cooperation to develop agriculture will enable PDC to access new markets. This is in line with PDC’s diversification strategy to reduce its reliance on construction and property development in Singapore.
Corn has been a track proven record as a biofuel. PDC has chosen corn as a focus as the matured period of corn plants are within months.
New Contracts Secured as a kick start
PDC has signed a contract to deliver US$111 million worth of prilled fertilizers over a period of 24 months. The board expects this contract to have a material impact on the earnings for the next financial FY ending Dec 07.
Singapore’s First AgriAcademy / R&D Centre at Lim Chu Kang
PDC has unveiled plans to develop a R&D Centre with F&B and retial outlets, spas operations and chalets for integrated farmstays and experience and educational tours.
Super Coffeemix to sign a MOU to set up a Coffee Academy. PDC will cultivate coffee plantations and supply to Super Coffeemix at a discount price for its coffee beans. This marks a milestone for PDC.
Future Prospects for PDC?
Although PDC will be issuing new equities to fund the projects, but I believe the dilution of shareholders’ stake is worthwhile. PDC has diverse its reliance on the construction and property development business in Singapore. By opening up a new revenue stream in the agriculture, PDC has secured a US$111 million contract over the next 24 months. This has kick start PDC intention to venture into new business. The success of this delivery of this contract will instill confidence in new clients. This might draw in more client base for PDC.
The development of R&D will enable PDC to enhance its hybrid corps. Should there be a breakthrough, PDC will benefit greatly from it.
Lim Chu Kang’s Agri Academy will enable PDC to generate revenue from F&B outlets, educational tours and spa etc. However, the revenue will only come in around 2008 when they are operational ready.
Risks
The usual risks are diseases that affect yield of the land, overstrain on the land resources without replenish of its nutrients, bad weather…etc. That’s always the traditional risk associated with agriculture.
My personal take will be a profit of US$6.5 million for FY08 or EPS of S$0.008 per share assuming that no further dilution of current share capital and no other contributions from its construction and property dev business. I would expect share to trade at 20 times PE ratio, or at S$0.16.
The Company was incorporated in Singapore on 4 September 1999 and converted into a public limited company under the name of Hong Lai Huat Group Limited on 23 May 2000.The Group is a diversified investment group with interests in construction of residential, industrial & commercial properties, property development & investment, trading of construction equipment & maintenance services, consultancy & business development and technology product, such as multi-media accessories, wireless surveillance system & multi-ledia accessories, wireless surveillance system and intelligent wehicle digital system (IVDS), businesses.The Group has set up companies in Malaysia and East Timor. In East Timor, makepeace Enterprise Pte Ltd was set up to deal in construction and property development and investment. As part of its diversification efforts, the Group acquired regional distribution rights for products dealing in IVDS.The Group subsequently changed its name to PDC Corp Ltd wef 31 July 2002.
Proposed Development of Corn Plantations
On 6th Nov 06, PDC has entered into a cooperation agreement with Regency Government of Toba Samosir for the proposed development of corn plantations, to promote, market hybrid corn seeds in TOba Samosir and to sell and export corn or other type of plants specie on approximately 40,000 hectares of arable lands. The tenure f the land will be not less than 20 years with the rights to renew another 20 + 20 years without payment.
PDC in return shall invest and fund the development of the project to cultivate corn on the land. Also, PDC need to introduce modern agriculture technology and resources, design and construct agriculture infrastructure such as roads and offices and to generate employment opportunities for the locals.
PDC will invest US$50 million over a period of 18 months starting from 2nd quarter of 2007. This is expected to be funded by bank borrowings and equity fund raising.
New Revenue Streams for PDC
This new cooperation to develop agriculture will enable PDC to access new markets. This is in line with PDC’s diversification strategy to reduce its reliance on construction and property development in Singapore.
Corn has been a track proven record as a biofuel. PDC has chosen corn as a focus as the matured period of corn plants are within months.
New Contracts Secured as a kick start
PDC has signed a contract to deliver US$111 million worth of prilled fertilizers over a period of 24 months. The board expects this contract to have a material impact on the earnings for the next financial FY ending Dec 07.
Singapore’s First AgriAcademy / R&D Centre at Lim Chu Kang
PDC has unveiled plans to develop a R&D Centre with F&B and retial outlets, spas operations and chalets for integrated farmstays and experience and educational tours.
Super Coffeemix to sign a MOU to set up a Coffee Academy. PDC will cultivate coffee plantations and supply to Super Coffeemix at a discount price for its coffee beans. This marks a milestone for PDC.
Future Prospects for PDC?
Although PDC will be issuing new equities to fund the projects, but I believe the dilution of shareholders’ stake is worthwhile. PDC has diverse its reliance on the construction and property development business in Singapore. By opening up a new revenue stream in the agriculture, PDC has secured a US$111 million contract over the next 24 months. This has kick start PDC intention to venture into new business. The success of this delivery of this contract will instill confidence in new clients. This might draw in more client base for PDC.
The development of R&D will enable PDC to enhance its hybrid corps. Should there be a breakthrough, PDC will benefit greatly from it.
Lim Chu Kang’s Agri Academy will enable PDC to generate revenue from F&B outlets, educational tours and spa etc. However, the revenue will only come in around 2008 when they are operational ready.
Risks
The usual risks are diseases that affect yield of the land, overstrain on the land resources without replenish of its nutrients, bad weather…etc. That’s always the traditional risk associated with agriculture.
My personal take will be a profit of US$6.5 million for FY08 or EPS of S$0.008 per share assuming that no further dilution of current share capital and no other contributions from its construction and property dev business. I would expect share to trade at 20 times PE ratio, or at S$0.16.
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