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Author: k3nthiew   |   Latest post: Wed, 23 Oct 2019, 11:40 AM

 

Third Bridge to Singapore from Pengerang? What it means to Keck Seng (M) Berhad, if it is from Pasir Gudang?

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If you do agree with my points from my previous article (https://klse.i3investor.com/blogs/Tman/176777.jsp) that the 3rd bridge to Singapore should be build from Pasir Gudang of Mukim Plentong rather than Sungai Rengit at Mukim Pengerang, eventually, this could become the catalyst to release the value of this Johor based company – Keck Seng (M) Berhad, in another few years time.

As shown in AR2017, Kseng own total 6 pieces of land in Johor with 4,000 hectares in total. The major assets that we would like to look at are Tanjong Puteri Golf Resort and Tanjong Puteri Resort (1st & 3rd), which located at Pasir Gudang; 5th and 6th that located at Mukim Sungai Tiram. 1st and 3rd are right opposite of Pulau Ubin, Singapore, while 5th and 6th are 5-6km away.

How much are those lands worth

Quoting from this news: https://www.thestar.com.my/business/business-news/2014/03/29/lower-price-for-johor-land-mah-sing-to-acquire-pasir-gudang-parcel-from-bistari-for-rm10mil-less/

With a very conservative valuation, if Rm7/sqft was given to the 4 pieces of land, it will worth minimum total of Rm2, 832.7mil (Rm7 x 404,668,820 sqft), that’s total of Rm2, 654mil gain to the group compare to their valuation on book of Rm178.5 mil (the last valuation on those lands was done on 1980). Simply divide Rm2, 832.7mil by 359.3mil shares (excluding 2.16mil treasury shares); each share will carry a value of Rm7.88 from the 4 pieces of land alone.

We must also not forget that parts of those lands are also in residential and industrial title and the rest are also potentially to be converting for future development or acquire by government for 3rd bridge development.

If the 3rd bridge was to be happened on the said lands of Kseng, selling those lands will at least double up the NTA of Kseng to Rm14-15. Either, Kseng can keep the lands for future developments as the area become ideal location with the 3rd link.

While writing this article, the new bridge was mentioned again by Tun Dr Mahathir during his visit to Singapore recently (https://www.malaymail.com/s/1693260/dr-m-wants-more-bridges-with-singapore-says-johor-has-lower-cost-of-living).

At last, we would like to emphasize that we are not try to form any investment recommendation whether buy or sell on KSENG shares.

 

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Labels: KSENG

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Chart Stock Name Last Change Volume 
KSENG 4.56 -0.01 (0.22%) 18,000 

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teareader818 The bridge can start from anywhere in Johor, just to avoid BN rent seekers. A crooked bridge is no problem.
21/11/2018 7:57 PM


 

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