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Why KSL should buy back its own share - Koon Yew Yin

Koon Yew Yin
Publish date: Wed, 06 Dec 2023, 11:38 AM
Koon Yew Yin
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An official blog in i3investor to publish sharing by Mr. Koon Yew Yin.

All materials published here are prepared by Mr. Koon Yew Yin

Koon Yew Yin, 6th Dec 2023

My sole purpose for writing this article is to help the 3 controlling shareholders namely Ku Hua Seng, Ku Cheng Hai and Ku Tian Sek to understand the actual worth of their listed KSL shares. KSL share is so much undervalued.

The 3 brothers are very good business men, but they don’t know the actual value of KSL share.

The table below is a comparison of the top 13 leading property developers share prices, their EPS for each of the last 4 quarters and PE ratio.

Property developers share prices comparison:

No.
Company
Price
EPS
EPS
EPS
EPS 4Q
PE
1
KSL
1.06
8.31
10.8
8.7
5.8
33.8
2
OSK Prop
1.22
5.97
6.35
5.58
5.9
23
3
Gamuda
4.50
9.46
8.4
7.5
44
70
4
Mahseng
78
2.06
2.08
2.06
1.9
8.1
5
IOI Prop
1.69
3.17
4.27
2.1
7.3
16.8
6
Simedaby
61
2.1
1.0
0.9
1.5
5.5
7
Guoco
72.5
0.72
2.36
1.3
1.3
5.7
8
ECOWorld
1.01
2.25
2.13
1.9
0.06
6.4
9
Sunway
1.52
2.54
1.96
2.67
1.3
8.5
10
SP Setia
85.5
1.06
0.36
1.5
0.1
3.0
11
IJM
1.86
2.67
2.87
0.66
2.1
6.4
12
UEM Sun
71
0.17
0.49
0.3
0.4
1.4
13
Tropicana
1.23
0.02
loss
loss
loss
loss

KSL EPS for the last 4 quarters is 33.8 sen and its last traded price is Rm 1.06. It is selling at PE 3.1 which is the cheapest among all the 13 top leading property developers in Malaysia. Moreover, its Net Tangible Asset (NTA) is RM3.52 per share.

KSL 2022 annual report shows that KSL is cash rich.

That is why KSL bought land from SP Setia: 

Corporate News Friday, 24 Nov 2023 PETALING JAYA: KSL Holdings Bhd is acquiring freehold land measuring 72,820 sq m in Shah Alam, Selangor, from S P Setia Bhd for RM228.8mil. In a filing with Bursa Malaysia, KSL said the acquisition will enlarge the group’s land bank and enhance its future revenue and earnings.

Share buyback:

Since KSL is cash rich and has very good cash flow, the company should buy back its own shares at the current price level. For example, the company buys at the last traded price of Rm 1.05 per share which has a net tangible asset value of Rm 3.52. That means the company can make an instant profit of more than 200%.

KSL buying back its own shares is far safer than the company buying 72,829 sq m in Shah Alam, Selangor on 24th Nov 2023 for Rm 228.8 million from SP Setia.

Total number of issued shares is 1,038 million.

The company should buy back 100 million KSL shares costing Rm 106 million to make back more than Rm 220 million immediately.

After my publication of this article, the company should buy back its own shares. When investors see that the company is buying back its own shares, they will have more confidence to buy more KSL shares. As a result, the share price should go up higher.


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Discussions
Be the first to like this. Showing 5 of 5 comments

Seeking

Any dividend? 3 directors fees how much a year?

2 months ago

StartOfTheBull

Buy back own share basically is to enable traders to lock in profit instead. 😁

2 months ago

gladiator

Kyy want to sell all his KSL holdings so that he got funds to prepare for new CYCLE.

2 months ago

Invest_888

KSL managing/executive directors have been earning RM30 millions remuneration fee per year for many years without paying dividend to small shareholders. Uncle should make an appoitment with the directors to state your concern. No point at all to make comments.

2 months ago

KingKKK

Uncle Koon, PBA PE is even lower because market has not noticed it yet.
Last quarter EPS is 11sen, times 4 = 44 sen.

Now trading at RM1.11, the PE is only 2.5x!

And the earnings is super solid because everyone in Penang and factories there use water everyday!
But not everyone buy property everyday...

Uncle, come read here...

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-11-09-story-h-215206834-PBA_6_reasons_why_PBA_is_worth_RM2_50

2 months ago

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