KSL Holdings hits new highs

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KUALA LUMPUR (Sept 23): KSL Holdings Bhd share price marches to breach new all-time highs as it reached RM4.97 today, as the once-overlooked property developer is still considered grossly undervalued.

At 3:34 pm, KSL gained 18 sen or 4% to RM4.94, after being traded in the range of RM4.74 and RM4.97. Up to the last price, the counter has more than doubled from the closing of RM2.20 on Dec 31, 2013. Its trading volume was 1.67 million, which was above the one-year average of 1.05 million.

KSL, which has more than 2,000 acres of land bank predominantly in southern Johor and Klang, is deemed by Kenanga Research analyst Sarah Lim in a recent report, to be traded lower than the fair value. Pegging the stock as a “trading buy”, Lim also ascribed a fair value of RM6.63 on KSL, after putting a 50% discount to its revised net asset value of RM13.26.

A broker also said that with KSL’s strong financials, there is a possibility the group is looking at rewarding its shareholders with a bonus issue and setting a dividend policy.

“About one-third of the group’s net profit is made up of recurring income generated from its shopping mall KSL City and hotel in Johor Baru,” the broker pointed out.

Furthermore, KSL’s Eexecutive Chairman Ku Hwa Seng has also been buying shares in the property developer this month, which some see as a measure of confidence from the management in the company.

Up to Sept 08, Ku has bought 700,000 KSL shares on the open market this month, bringing his total shareholding in the company to 163.29 million or 42.25% KSL shares.