Recently one smart accountant pointed out to me that KP Property has millions of Redeemable Convertible Preference Shares (RCPS). This will affect its share price. I sold all my KPP shares to buy KSL.

KSL Holdings Bhd is a holding company. It is engaged in real estate services. The company has four reportable segments: Property development; Property investment; Investment holding; and Car park operation. Property development includes the development of residential and commercial properties; Property investment includes an investment of real properties and hotel; Investment holding includes the provision of management services to the subsidiaries, and Car park operation includes car park management services. KSL derives most of its revenue from Property development.

The table below is the comparison of the top 9 property developers based on the latest traded prices and their EPS for the last 4 quarters. KSL is the cheapest based on PE ratio.

The last traded price is RM 1.94 and it reported EPS of 41.7 sen for the last 4 quarters. It is selling PE 4.6 as shown below:

Johor: The New Data Center Hub

Johor has quickly become Malaysia’s largest data center market, driven by significant investments and strategic developments. Recent reports highlight major projects, such as Gamuda’s RM1.7 billion hyperscale data center contracts and Sime Darby’s new data center outside Kuala Lumpur. These developments position Johor as a critical hub for technological infrastructure, enhancing the region’s economic landscape.

KSL Holdings Bhd: Current Standing

KSL Holdings Bhd continues to show strong financial health and operational success. For the year 2023, KSL nearly doubled its revenue to RM1,142 million from RM575 million in 2022. The pre-tax profit also saw a significant increase to RM535 million, up from RM217.2 million the previous year.

KSL’s Strategic Advantage

While KSL Holdings may not be directly involved in the AI boom or the data center industry, its significant property holdings in Johor place it in a unique position to benefit from this surge. The influx of data center investments is likely to drive up property demand in the region, benefiting real estate players like KSL.

Johor’s growing prominence as a data center hub can spur increased residential and commercial property demand. KSL’s extensive projects in Johor, such as Taman Bestari Indah, Taman Mutiara Bestari, and KSL Residences 2, are poised to attract new investments and higher property valuations. These strategic locations offer easy access to major highways and urban amenities, making them attractive for potential buyers and investors.

Undeveloped Property Holdings in Johor

KSL’s land bank in Johor is one of its most valuable assets. Highlighting undeveloped properties is crucial as these lands have not yet had their prices set, which could result in higher valuations in the future. Here are some key undeveloped properties:

Land in Pulai, Johor:

A substantial portion of KSL’s 190-acre mixed development township in Pulai remains undeveloped. This land offers potential for future residential and commercial projects.

Unutilized Land in Skudai:

Beyond the current developments, KSL holds significant land reserves in Skudai. This area, close to key amenities and major highways, is ripe for future development.

KSL’s Holdings in Johor Bahru:

KSL owns various plots of undeveloped land in Johor Bahru. As the city grows and infrastructure improves, these lands are likely to increase in value, offering excellent prospects for new projects.

Future Development Sites in Segamat and Batu Pahat:

KSL also has undeveloped land in Segamat and Batu Pahat. These regions, known for their strategic locations, present opportunities for future residential and commercial developments.