Phnom Penh Special Economic Zone (CSX: PPSP) subsidiary Sahas Properties Co Ltd broke ground this week on a new rental warehouse located inside the Phnom Penh Special Economic Zone   along National Road 4.

The new development,  costing around $1 million, was commissioned after the subsidiary’s first four unitrental factory building was built and partially leased out this year.

There are currently two tenants under the new subsidiary, Seikawa (Cambodia) Technology Co Ltd, a manufacturer of plastic parts for electrical and electronic devices from China, and WCFO (CAMBODIA) Co Ltd, another Chinese manufacturer, producing fibre optic devices for export to Japan and the United States.

However, the company would not disclose rental rates, stating: “The prices are confidential based on our tenant agreements.”

According to the company, total employment in the zone rose  from 21,000 in January to 26,000 in November, with its exports for the same period valued at $547 million. This represents a 13.7 percent increase from the same period year to date.

The main business of PPSP (established in 2006) is to develop and operatethe zone but they also have several new businesses active, including construction, security, tax consultation and support, property development and management.

Sahas Properties Co Ltd was established in November 2018 to take charge of property development and management inside the zone. As of today, they accommodate more than 30 investors from Japan and China, as well as other countries in the zone’s new  rental factory buildings.

According to PPSP, more rental factory and warehouse buildings are to be built and managed by Sahas  to meet the ongoing demand from investors in Japan and other countries.

It added that the ground-breaking ceremony for a new rental warehouse is another achievement to look forward to in 2021, after the completion of the four unit rental factory building built this year which currently has tenants in two of those units.

According to the company’s third-quarter report (covering the first nine months of 2020), PPSP made  $537,246 which is down 93 percent compared with the $8,615,848 generated over the same period last year. The company’s revenue and profit are largely attributed to land sales within the zone.

However, according to PPSP Chairman Tan Kak Khun: “The financial position of the company remains strong,” with total assets amounting to $95,142,366 and total equity amounting to $59,944,787, which represent a debt-to-equity ratio of 0.59.

The PPSP share price hit a record low this month (1,310 riels a share) before a slight recovery this week with the stock now trading upwards at around 1,350 riels a share.

This month PPSP Chief Financial Officer Fong Nee Wai said that in his opinion, the company share price (at the time trading at 1,490 riels a share) are currently way undervalued and believes there are buyers/investors in the market who will see potential value and be prepared to invest and buy shares from seller(s).

It should also be noted that PPSP is currently in arbitration with Asiatic Group (Holdings) Ltd (AGHL), a Singapore Exchange-listed company seeking a minimum of $14.4 million in relief over a disputed power supply contract – allegations PPSP fully denies.

• Tags: PPSP, Sahas Properties