ON April 12, Bursa Malaysia’s Property Index surged to a six-year high amid positive market sentiment surrounding the sector

The Edge reported that index which tracks property sector-linked stocks on Bursa Malaysia surged to an intra-day high of 1,036.15 points - its highest since touching 1,093.73 points on Sept 3, 2018 - after climbing 20.08 points or 1.98%.

Fast forward some two months later, the index has continued to trend upward to close at 1,119.28 points or 29.5% higher year-to-date (YTD) when it kicked off 2024 at 864.30 points.

Supported by the various initiatives outlined by the Madani government under Budget 2024, Housing and Local Government Minister Nga Kor Ming is bullish about prospect by expecting Malaysia’s property market in 2024 to be stable at least over “the next three years” which coincides with the five-year term of the Pakatan Harapan (PH)-led unity government.

Interestingly, the minister also made a forecast that the on-going “positive trajectory” is expected to continue into 2H 2024 while pointing to some individual property counters which have rallied by up to 600% since the beginning of 2023.

Nga also pointed out that property transactions reached RM56.53 bil in 1Q 2024 with more than 104,000 transactions as compared to market transactions valued at RM42.31 bil with more than 89,000 transactions recorded in 1Q 2023.

Specifically, he pointed to DPS Resources Bhd which has experienced 600% growth in share price from January 2023 to June 2024; UEM Sunrise Bhd which saw a 347.06% increase; and WMG Holdings Bhd which showed 326.31% growth.

‘Hidden gem’

At a glance, major developers including S P Setia Bhd, Eco World Development Group Bhd, IOI Properties Group Bhd, Sime Darby Property Bhd and Mah Sing Group Bhd have all edged up more than 30% year-to-date.

Likewise, mid-cap property developers such as EUPE Corp Bhd, Avaland Bhd and Tambun Indah Land Bhd have also seen their share on the uptrend as the FBM KLCI breached and able to stay above its new-found psychological level of 1,600 points.

This points to the question if two small-cap property laggards, namely Jiankun International Bhd and Land & General Bhd, too, are ready to ride the storm.

With a market value of RM71.6 mil a share price of.14.5 sen (as of June 7 close) Jiankun might be deemed an undervalued small-scale developer in the market.

As it is, Jiankun net tangible asset (NTA) per share is 28 sen is 50% higher than its share price as compared to other property stocks. For instance, UEM Sunrise has a share price of RM1.14 with an NTA of RM1.35 while Mah Sing Group has a share price of RM1.85 while its NTA is RM1.49.

Jiankun has reportedly been projecting a meteoric rise with its gross development value (GDV) soaring to RM2 bil following the construction of a 52-storey high-rise apartment and three buildings comprising retail and residential units with an estimated GDV of RM1.2 bil (re-development of Jalan Tun Razak flats).

According to a media statement, this plot is expected to enhance Jiankun’s GDV within the next five to eight years due to its prime location in Kuala Lumpur’s Central Business District (CBD) or just a five-minute walk from the nearest metro station and in close proximity to the PETRONAS Twin Towers.

Apart from the above project, Jiankun has four other projects in the pipeline, namely the Residensi Maya serviced apartments in Kajang (RM267 mil); Taman Panchor Jaya two-storey terrace houses in Nibong Tebal, Penang (RM73 mil); Bukit Tambun serviced apartments in Simpang Ampat, Penang (RM200 mil-RM220 mil) and a project in Klebang in Melaka (RM190 mil-RM200 mil).

As the property stock boom has just begun, one wonders if Jiankun which lags behind its peers will play catch-up in due course. - June 10, 2024

https://focusmalaysia.my/will-buoyant-property-sector-sentiment-spill-over-to-penny-counters-like-jiankun-lg/