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Rowsley Has Fallen More Than 60% to a 52-Week Low: Is It Time For a Turnaround?

Rowsley (SGX: A50) has been selected by local billionaire Peter Lim (the famous “Remiser King”) as a vehicle of choice for his reverse takeover exercises (RTOs). The company has since then used its shares as currency to purchase a 9.23-hectare plot of land in Johor Bahru, Malaysia, and Singapore’s leading design firm RSP Architects Planners & Engineers.

These acquisitions have effectively made Lim and his partners – which includes the Crown Prince of Johor and Albert Hong, RSP’s principal – the main shareholders of Rowsley.

Although Rowsley’s share price had been boosted to a peak of S$0.68 in September 2013 following the RTO announcement in December 2012 (shares of the company were trading at less than S$0.10 in November 2012), the company has since fallen 61% to S$0.28 currently. That’s just a whisker away from its 52-week low of S$0.26.

What has changed with Rowsley

When Rowsley was going through the RTO, the company had no real operating asset and there was no real guarantee that the deal will go through. Yet, the company was pushed to its peak price during that period.

With the RTO finally completed in late September 2013, Rowsley is now a strong architectural outfit with a sizable land bank in one of the fastest growing regions (Iskandar Malaysia) in Southeast Asia. It has also successfully roped in Lock Wai Han to be its chief executive. Lock was previously the chief executive of CapitaMalls Asia (China), which is part of the CapitaLand Group (SGX: C31), the largest property developer in Southeast Asia.

Interestingly, Rowsley is now trading near its 52 week low only after all these changes have taken place.

Vantage Bay

In any case, the current main growth engine for Rowsley would have to be Vantage Bay. It is a huge development project with a gross development value of RM5.5 billion (around S$2.15 billion); by way of comparison, Rowsley has a market capitalisation of S$1.19 billion currently.

Vantage Bay is located on a 9.23-hectare piece of land along the coastal roads of Johor Bahru. Its location is also a very convenient 5 minutes’ drive from the immigration checkpoint that separates Singapore and Malaysia.

Plans are for Vantage Bay to be a mixed-use township that will contain its own shopping mall, waterfront facilities, hotel, residential apartments, and office towers. There would even be a medical hub in Vantage Bay that would be run by healthcare provider Thomson Medical; Lim is a majority owner of the healthcare outfit which runs the maternity hospital Thomson Medical Centre along Thomson Road in Singapore.

Foolish Summary

There is still a long way to go before anyone can know how successful Vantage Bay and any of Rowsley’s subsequent developments can be. But, with its current operating business and projects in the pipeline, Rowsley is evolving from a speculative company into a stable outfit.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn’t own shares in any companies mentioned.