KUALA LUMPUR (July 23): Electrical home appliance maker Khind Holdings Bhd is planning a mixed-use project on a 65,340 sq ft piece of land in Setia Alam, Shah Alam, Selangor, as it embarks on a diversification exercise to include property development, construction and property investment as one of its future core businesses.

The project will have a gross development value (GDV) of RM150 million, with total estimated development costs of RM112.50 million.

In a filing with Bursa Malaysia today, Khind (fundamental: 1; valuation: 2.4) said it plans to fund the construction cost of the planned development via a combination of bank borrowings, progressive sales billings and internal funds.

Khind also said the planned development is expected to result in a diversion of 25% or more of the group's net assets to an operation which differs widely from its current operations. However, it is expected to contribute 25% or more to the group's net profit.

Before that, the group plans to seek approval for the proposed diversification from its shareholders at an extraordinary general
meeting to be convened.

Khind said the planned development will feature an office building, to be used partly for its own use and partly to be rented out, a retail component together with service apartments.

"The details of the planned development, including the specifications of the development components or the group’s plans to retain, sell or rent out the components may be subject to change, depending on the prevailing economic condition as well as regulatory considerations," it added.

However, it intends to launch the service apartments first to commence generating cash flow from the progressive sales billings.

Khind said the construction of the planned development is expected to commence by the first quarter of 2016, after obtaining the approvals from Majlis Bandaraya Shah Alam, its shareholders in respect of the proposed diversification as well as other relevant authorities.

The completion of the project is expected to be within 36 months after the commencement of construction.

Upon the successful implementation of the proposed diversification and the finalisation of the group’s plans for the planned development which are anticipated to be by the fourth quarter of 2015, Khind said it intends to appoint Adept Housing Development Sdn Bhd as the project management company for the project.

Khind shares closed 10 sen or 4.63% lower at RM2.06 today, giving it a market capitalisation of RM324.61 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)