Good news! The new government is starting to look for ways to improve the property market. They are looking at relaxing the current lending guidelines now.

Extract from The Edge (5 June 2018)
The Housing and Local Government Ministry (KPKT) will discuss with the Ministry of Finance (MoF) and Bank Negara Malaysia (BNM) on relaxing current lending guidelines to enable more homebuyers from the B40 and M40 groups to secure housing loan.

http://www.theedgemarkets.com/article/kpkt-meet-mof-and-bnm-lending-gu...

KSL is well positioned to benefit from the current improvement in the JB landed property market. After a slowdown of about 3 to 4 years, the demand for landed residential property in JB is improving. The real demand from the locals is more stable, consistent and reliable as compared to the foreigners and the locals prefer landed properties as opposed to highrise.

I think we have to respect the foresight of KSL's top management. They foresaw the market trend and they have positioned themselves well ahead to plan for the landed property demand improvement. KSL currently has launched or about to launch landed properties in KSL Bukit Jaya, KSL Mutiara Bestari, Nusa Bestari, Kempas Indah and Bestari Indah. All these projects are in JB.

https://www.thestar.com.my/business/business-news/2018/06/05/good-demand-for-landed-residential-property-in-south-johor/

Value has emerged after the recent sell down.

UEMS is now trading at RM0.695 as opposed to its NTA RM1.51 per share. This translates to Price to Book of 0.46 times. The value investors will notice the values in this company and start to invest in this company.

Paramount will be greatly benefited as some of its developments are categorised in the affordable segment.

MKH will be greatly benefited as many of its developments are categorised in the affordable segment.

Good news! The new government is starting to look for ways to improve the property market. They are looking at relaxing the current lending guidelines now.

Extract from The Edge (5 June 2018)
The Housing and Local Government Ministry (KPKT) will discuss with the Ministry of Finance (MoF) and Bank Negara Malaysia (BNM) on relaxing current lending guidelines to enable more homebuyers from the B40 and M40 groups to secure housing loan.

http://www.theedgemarkets.com/article/kpkt-meet-mof-and-bnm-lending-gu...

Good news! The new government is starting to look for ways to improve the property market. They are looking at relaxing the current lending guidelines now.

Extract from The Edge (5 June 2018)
The Housing and Local Government Ministry (KPKT) will discuss with the Ministry of Finance (MoF) and Bank Negara Malaysia (BNM) on relaxing current lending guidelines to enable more homebuyers from the B40 and M40 groups to secure housing loan.

http://www.theedgemarkets.com/article/kpkt-meet-mof-and-bnm-lending-guidelines

@propsushi, it is true that Yeoh Family is accumulating now. They are also supporting the share price.

All the businesses in the company are not doing well.

Bestarinet - Big investment but failed.
Yes - Big investment but nobody using.
Cement - Invested heavily to increase capacities but demand dropped.
Power - Profit margin drop heavily in Singapore.
Cash cows from Malaysia expired. Contract extension short period and low profits.
Construction - Fat meat in hand but disappeared. Left are low margin Double Track.
Development - Neglected to venture into cement, telecommunications, power and utilities.

TA will continue to do well for the next few years. Its Damansara Avenue project is nestled in the matured area surrounded by Sri Damansara, Damansara Perdana and Desa Park City. It will be the commercial centre for the area of about 5km in radius because of its direct link to a MRT Station. It will be a natural commercial center for densely populated Sri Damansara. In addition to that, it has a few advantages comparing to Desa Park City because of the direct MRT link. Property buyers are clever to foresee these advantages associated with its locality. That is the main reason the two new blocks of Ativo serviced apartments are selling extremely well.

Extract from The Edge, 25/5/18.

MKH Bhd is planning to launch properties worth some RM581 million in GDV in the second half of the year, its managing director Tan Sri Eddy Chen told EdgeProp.my.

The projects include the Kajang East Precinct 1 double-storey terraced homes, MKH Boulevard II serviced apartment and commercial development in Kajang, and phases 5, 10 and 11 semidee and terraced shoplots at Hillpark @ Shah Alam North, Puncak Alam, Selangor.

In the first half of the year, MKH had launched Inspirasi Mont’Kiara serviced apartment project in Mont’Kiara, Kuala Lumpur.

Chen expects the project, which has seen a take-up rate of 70% since its launch on the weekend of April 14 and 15, to be sold out in the next three months.

http://www.theedgemarkets.com/article/mkh-gears-2h18-launches

The exceptional high crack spread (profit margin) for the last one and half years was due to the blue sky policy of China and low crude oil price. Those low efficiency and heavy polluting crude oil plants were forced to close down in China. Therefore, the profit margin increases because of low total production capacities available in the market.

However, a few new and huge plants in China are coming onstream since beginning of the year and for the next few years. In addition to that, there will be also a huge plant in RAPID, Johor (JV between Petronas and Aramco) which will be operational in 2019. I believe the crack spread (profit margin) will normalise gradually for the next one to two years.

The stock brokering licences will be highly sought after again in the next few years when the regional and Mainland China's investment bankers expand. It is a matter of time that TA will either JV or sell its securities arm to the IBs. TA will realise handsome profits from the transaction.

The new government will use some measures to help the Rakyat to own houses especially in the affordable sector. Currently, the distribution of EPF A/C 1 and A/C 2 is 70% and 30%. If the new government can change it to 60% and 40%. That will help the potential buyers a lot. Many of the prospective buyers who are at the border line will become eligible to get bank loans. The demand for residential properties will increase a lot.

The new government will use some measures to help the Rakyat to own houses especially in the affordable sector. Currently, the distribution of EPF A/C 1 and A/C 2 is 70% and 30%. If the new government can change it to 60% and 40%. That will help the potential buyers a lot. Many of the prospective buyers who are at the border line will become eligible to get bank loans. The demand for residential properties will increase a lot.

The new government will use some measures to help the Rakyat to own houses especially in the affordable sector. Currently, the distribution of EPF A/C 1 and A/C 2 is 70% and 30%. If the new government can change it to 60% and 40%. That will help the potential buyers a lot. Many of the prospective buyers who are at the border line will become eligible to get bank loans. The demand for residential properties will increase a lot.

The new government will use some measures to help the Rakyat to own houses especially in the affordable sector. Currently, the distribution of EPF A/C 1 and A/C 2 is 70% and 30%. If the new government can change it to 60% and 40%. That will help the potential buyers a lot. Many of the prospective buyers who are at the border line will become eligible to get bank loans. The demand for residential properties will increase a lot.

Developers Bullish On Penang Property. (The Star, 14/5/18)

The PH central government will now support and fund the LRT and highway projects in Penang. Better connectivity will boost the property market both in Penang and Seberang Jaya. Paramount who is developing Utropolis Batu Kawan including KDU University College will be greatly benefitted.

https://www.thestar.com.my/business/business-news/2018/05/14/developer...

In Bursa, some counters are overpriced especially those politically linked. They were pushed up too high beyond their fundamentals before the election. Some are traded at PE ratio between 20 to 40 times. After the election, these counters would experienced selldown.

However, there are a lot of good counters like Paramount, TA and MKH that have been traded at single digit PE ratios. Some have been trading at that unbelievably low PE for the last few years. This is mainly due to the low investors' confidence related to the corruptions in this country. With the GE14 concluded and government changed, I think these undervalued counters are going to experience price surge.

In Bursa, some counters are overpriced especially those politically linked. They were pushed up too high beyond their fundamentals before the election. Some are traded at PE ratio between 20 to 40 times. After the election, these counters would experienced selldown.

However, there are a lot of good counters like Paramount, TA and MKH that have been traded at single digit PE ratios. Some have been trading at that unbelievably low PE for the last few years. This is mainly due to the low investors' confidence related to the corruptions in this country. With the GE14 concluded and government changed, I think these undervalued counters are going to experience price surge.

In Bursa, some counters are overpriced especially those politically linked. They were pushed up too high beyond their fundamentals before the election. Some are traded at PE ratio between 20 to 40 times. After the election, these counters would experienced selldown.

However, there are a lot of good counters like Paramount, TA and MKH that have been traded at single digit PE ratios. Some have been trading at that unbelievably low PE for the last few years. This is mainly due to the low investors' confidence related to the corruptions in this country. With the GE14 concluded and government changed, I think these undervalued counters are going to experience price surge.

Earnings per share

2015 16.03sen
2016 17.74sen
2017 31.46sen

Dividends per share

2015 8.25sen
2016 8.50sen
2017 16.0sen

The EPS and Dividend Payments are increasing each year for the last 3 years.

Extract from article in The Star

Property Sales
2016 RM420mil
2017 RM842mil
2018 RM1,000mil (Target)

Property sales has increased tremendously from 2016 to 2018.

Unbilled Sales
As at 31/12/17 RM611mil
As at 31/3/18 RM740mil

More sales are concluded for the first three months of the year. Unbilled sales has increased by 21.1%.


https://www.thestar.com.my/business/business-news/2018/05/05/paramount-aims-for-rm1bil-sales/

@calvintaneng, since you are from Singapore, can you check on the status of YTL land's development, 3 Orchard By The Park in Orchard area? The building work has been completed last year but not launched yet. Since Singaporean property market has improved a lot since last year, can you check whether the project will be launched soon?

Tony is happy that the investors and fund managers have been neglecting TA and TAGB. He has been able to collect more shares at lower price. TA was actually a Tiger mistaken as a Cat, a Phoenix mistook as a Turkey or a Horse mistook as a Goat.

It is true that TAGB is having high debts. But if we weigh the positives and discount the negatives, we can still conclude that TA and TAGB are valued buys. The debts incurred are mostly loans for hotel purchase. When the room rates received is higher than the expenses and bank repayment, they are still generating positive cash flow. I would say Tony is a very aggressive boss. However, the management is also trying to bring down its debts recently with the sales of Little Bay and HK office.

May be the old movie title "The God Must Be Crazy" is also suitable.

Paramount's Sejati in Cyberjaya is well received. According to a friend in property market, the buyers in the development are those highly paid IT workers and senior pilots. Sejati development is near to Elite Highway and it takes only about 20 minutes to reach KLIA. Therefore, many senior pilots choose to stay in Sejati Cyberjaya.

A lot of values in TA. It worths more than RM1.45 per share. To name a few, KLCC land (RM3,600psf vs book value RM580psf), Damansara Avenue land (RM500psf vs book value RM87psf) and Bukit Bintang land (RM3,600psf vs book value RM680psf). If something worths RM1.45 sold at RM0.52 is called lelong, how about something worth more than RM2.50 sold at RM0.52?

A lot of value to be unlocked. Most of the ppl just simply say property market not good. Can not buy property stocks like TA and TAGB. They overlook the land bank that is undervalued.

Example : KLCC land is valued at RM580/sq.ft. in the book. Market price is RM3,600/sq.ft.

Tony and Alicia are laughing happily and taking advantage of this ignorance. They are collecting the shares at super cheap price.

A lot of value to be unlocked. Most of the ppl just simply say property market not good. Can not buy property stocks like TA and TAGB. They overlook the land bank that is undervalued.

Example : KLCC land is valued at RM580/sq.ft. in the book. Market price is RM3,600/sq.ft.

Tony and Alicia are laughing happily and taking advantage of this ignorance. They are collecting the shares at super cheap price.

Just like Paramount's Greenwoods, Sime Darby's Serenia City landed property launching was also fully taken up. Both Greenwoods and Serenia City are very near to each other and their purchasers are mainly those people working with airlines, KLIA and the Digital Free Trade Zone like Lazada and Alibaba.

http://www.theedgemarkets.com/article/first-phase-sime-darby-propertys-serenia-city-sold-out-within-hour

http://www.theedgemarkets.com/article/paramounts-2storey-keranji-homes-100-taken

The followings are the financial results for Hengyuan from 2010 to 2017.

----------------------------------2017----2016----2015----2014----2013----2012-----2011-----2010
Refining Margin (USD/bbl) -----???-----5.46-----6.07----(2.34)-----1.9-----1.25------???-------???
Sales Volume ('000 bbl) -------???---39,049--36,325--40,462---40,033---40,234---31,025--37,230
Earnings/share (sen) ----------303-----112-----117-----(396)-----(52)-----(32)------(42)-------35

From the results, we can see that the refining margins were higher for the year 2015, 2016 and 2017. These coincided with the crack-down on the less efficient and highly polluting plants in China. The closures of those less efficient plants have pushed up the crack spreads and refining margins.

Highly efficient and huge new plants in China have started to come onstream and they are going to lower the crack spread in the next one or two years. The current crack spread for first quarter of 2018 has drop to the 2016 level. So, the question is when will the crack spread normalise? From the above results, I estimate that the break even crack spread is about USD5.5/bbl or refining margin of USD4.0/bbl.

Paramount's new launching in Greenwoods at Salak Tinggi is fully sold out. This is a very respectable achievement in the current poor property market. The products launched is landed properties at an affordable price of RM479,900 onwards.

http://www.theedgemarkets.com/article/paramounts-2storey-keranji-homes-100-taken

Jeffrey Chew also said in this week's Focus Malaysia that Paramount is looking to work with land owners on JV basis. I think the company should talk to Southern Acids which is also a major shareholder of Paramount. Southern Acids has more than 600 acres freehold land in Kota Kemuning. The owners and shareholders of Southern Acids will benefit from both Paramount's and Southern Acids' future growth in profits.

Jeffrey Chew mentioned last year that some Real Schools properties will be sold to REIT but this is still not implemented. Hopefully, Paramount is still talking to the REIT.

Agreed that land held for development can not be revalued. It is also stated in Financial Reporting Standard (FRS) that it can not be revalued. However, in computation of RNAV or the actual Net Tangible Asset, we will have to use the current market land price to get the actual NTA.

@upsidedown119. I agree with you. Just like Hap Seng and other stocks, KSL price will rise once the shareholders are confident that the management is rewarding the shareholders on their investments into the company. Investors are looking for returns on the money tighted up in the investment.

@pradeep. The revised NTA based on the current market price is RM5.50 per share. If you go through the list of properties owned by KSL in the 2016 Annual Report, you can see the few pieces of land are still kept in the book at their purchase price in 2002 to 2007. The actual market price has skyrocketed and gone up 100% to 300%.

For example,
Item 2, the 6,496,612 sq. ft. subdivided land under development in Bandar Bestari, Klang. The book value is RM265.5mil or RM40.72 / sq. ft. The current market price should be RM584.7mil or RM90/sq. ft.

@upsidedown119, thanks for the information that you give. No wonder it came down so fast in Dec 2014. I could not believe that it has now come down to RM1.02, LELONG PRICE without valid reasons. Nothing much has changed, the company still make a lot of money even for the last 3 years when the property market is not good. The share price has been trading between PE Ratio of 3 to 7 times. It is now trading at 4.77 times. What will happen when the property market improve? It will definitely move up very fast.

Bursa announcements showed that the directors and Tabung Haji had been buying the company shares for the last few years. KSL itself also had done a lot of share buy back.

@upsidedown119, I thk you are just like me. We are value investors, not speculators. We do our homework before we invest. We had commonly chosen deeply undervalued KSL, but the management prefer to press down the price to buy quietly at low price. Other than pushing down the price by frequent trading, no dividend declared is also another way to lower down the price.

@upsidedown119, I bought into KSL since 2012. All the calculations proved positive, but I only miscalculated one factor, the board. I am also learning from this mistake. In fact, the actual NTA per share for KSL is about RM5.50/share instead of RM2.49/share if we based on the current market values of the landbanks that the company owned.

Another comparison

------------------------------Share Price-------------
-------------------- Sept 2010 ------------- Today -
KSL ----------------RM0.80 ----------------RM1.01
Hap Seng ---------RM1.00 ----------------RM9.42

The price has been adjusted to all rights issue, share splits and bonus issues.

On top of this, Hap Seng has distributed many times more dividends as compared to KSL.

Comparison between KSL and Hap Seng.

------------------------ NTA -------- PE ---------- Dividends ----Share Price

KSL---------------- RM2.49 ---- 4.77 ------------- nil ------------ RM1.01

Hap Seng ------- RM2.32 ---- 21.27 ---------- RM0.35 ------- RM9.42

Both have about the same NTA (underlying asset for each share), but Hap Seng is able to create 8.4 times more values to the shareholders than KSL.

One good example is Hap Seng Consolidated. The company is also involved in property development. A substantial part of the CEO's remunerations is in the form of share options. The share price of the company has increased from around RM1.00 in 2010 tp RM9.55 last Friday. The CEO, Mr. Edward Lee has been in the helm for this period.

The high executive directors' remunerations are not justified with the share price performance of KSL. Usually, a substantial part of the remunerations should be paid in the form of share options which are commonly practised by many companies in Bursa. In this way, the increase in the share price will benefit the executive directors.

For KSL case, the 4 executive directors' remunerations in cash form amount to about 15% of the 2017 full year profits. This is way too high and can not be justified.To make the situation worst, no dividend is declared. The executive directors (major shareholders) enjoyed the profits of the company but the minority shareholders do not get anything.

I think this should be brought up and explanations must be given by the executive directors in the coming AGM which will be held one or two months from now in April or May this year.

KSL is almost debt free. The borrowings are negligible.

Super cheap sales.

TAGB should set up REIT with 2 or 3 well performed and fully valued hotels first. Other hotels can be injected when they have performed well. This is the best way to create values for the shareholders and it will free up capital for TAGB to further develop more hotels. Going forward, TAGB will develop 3 hotels in Malaysia. One each in Bukit Bintang, KLCC and Damansara Avenue.