SI Research: A-Smart – Growing Activities In East Timor

On 26 July 2017, A-Smart announced its developments in fast-growing Republica Democratica De Timor-Leste (East Timor). The company has been striving to expand revenue streams to drive sustainable growth and the recent developments have signaled significant progress in its investment business unit.

Establishing A Joint-Venture Company

Subjected to certain conditions precedent, including the obtaining of approval from shareholders, A-Smart intends to establish a joint-venture company (JV Co) to carry out future property investment and property development in East Timor.

As the country is pursuing infrastructure development and boosting its tourism industry, A-Smart believes that the move to tap into East Timor would provide tremendous growth opportunities for its investment and other business interests.

Under the JV, A-Smart would hold a majority interest of 51 percent while two other individuals – Mr. Ng Choon Meng and Mr. Liao Sheng-Tung – would hold the remaining stakes in the JV Co. Both individuals have extensive experience in real estate development and property management. Mr. Liao in particular, holds stakes in other real estate development companies in Taiwan and China.

Outlines Of JV

Outlines of the JV highlighted that the JV Co would intend to undertake a project “to construct and develop six buildings of mixed development on a plot of land in the heart of the capital city of East Timor that is currently being developed as the country’s central business district (CBD)”.

The landowner of the project is a reputable East Timor company with vast amounts of land banks of choice sites and could provide the JV Co or A-Smart other future development opportunities.

For the project underway, preliminary architectural plans (also subjective to final approval from local authorities, for Phase 1 is between 14,400 to 18,000 square meters (sqm), with a total saleable area of 9,000 to 12,600 sqm. The prevailing market rates for private residential apartments in the vicinity are estimated to be between US$2,500 per sqm to US$3,000 per sqm. Comparatively, contingent to size of built-up area, Phase 1 development and construction costs are estimated to be about US$13 to US$16 million.

Depending on outcome of Phase 1 and prevailing market conditions, the JV Co can choose whether to undertake subsequent phases, which involves the development of five other buildings. Should the JV Co chooses to proceed, the whole project is expected to take up to 8 years to complete which comprises of three more phases which include the development of retail units, offices, service apartments, residential and hotel.

Latest Project Win

Notwithstanding its growing activity in East Timor, A-Smart further announced a $1.2 million contract win in Singapore. Under the contract, A-Smart would supply a smart enterprise system – comprising hi-tech hardware and software – to a Singapore-based restaurant chain.

The client will also be provided consultancy and maintenance services as well as the use of the system’s license for a period of five years. Post-contractual period, A-Smart can grow its recurrent portion of revenue through continued provision of consultancy and maintenance services.