Kenanga rated KSL as OUTPERFORM TP 2.48: Post-briefing, we maintain our neutral-to-negative biased view on the property sector underpinned by the weaker-than-expected sales performance of RM830.0m recorded by KSL in FY14, and we revised our FY15-16E sales downwards by 16.0% for each year, while we also lowered our FY15-16E earnings by 13.0% for both years to RM272m and RM302m, respectively. We have also lowered our Target Price to RM2.48 (previously, RM2.76) as we widened the discount factor on its FD RNAV from 61% to 65%, but are keeping an OUTPERFORM call on the stock as valuation remains attractive, trading at only 6.4x FY15E Core PER vis-à-vis peer’s average of 8.0x, coupled with a potential upside on its net dividend yield of 4.7% as we only assumed a 30.0% payout compared to managements’ guidance of 40.0% from FY15 onwards.
Dividend policy on the way. In the briefing, management reassured that they are formalising a dividend policy which is still pending approval from the board members. Management indicated that they would be paying out at least 40.0% of its net profit in the upcoming dividend payout. However, we continue to assume a dividend payout ratio of 30% for now until the formal announcement is made. At 30.0% payout ratio, we would be expecting a net dividend of 10.0 sen for FY15 implying a net yield of 4.7%. Maintain OUTPERFORM with a lower TP of RM2.48. Following the reduction in our sales and earnings estimates for FY15-16E, we also lowered our Target Price for KSL from RM2.76 to RM2.48 as we widen our discount factor to 65.0% (previously, 61.0%) to its FD RNAV of RM7.07. The applied RNAV discount is a lot steeper compared to the sector’s average of 44.0%, but it is similar to the FD RNAV discount rate of 65.0% applied for UEMS, given that most of its development projects are heavily focused in Johor. Nonetheless, we are reiterating our OUTPERFORM call on the stock as valuation remains attractive trading at only 6.4x FY15E PER vis-à-vis its peers’ average of 8.0x, coupled with a potential upside on its net dividend yield of 4.7% as we only assumed a 30.0% payout compared to managements’ guidance of 40.0% for FY15.
The key words are 'at least 40%' of net profit dividend payout. The sell-down is also because of the weakening ringgit. KSL is a medium investment play.
Unbelievable volume. This stock is been over played. If it continues like this, it will scare away the ah pek/serious investor. The big boys are doing more harm than good for the counter. The boss's effort is wasted. This darling is now only good for speculation!!
3rd highest in 1 year records. may be some switch hands, pull down for lower cost... perhaps too much manipulated as its in the edge mag today. more coverage coming
The whole world is waiting catalyst from Fed meeting on next week, expected 2 more months to cari makan in stock market. Then be careful of June, 1) 4 months loan extension from ECB to Greek expire on June, EU zone crisis will be goreng again, 2) US rate hike might be in June if the coming NFP still continue showing strong improvement. Always stay alert.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
upsidedown119
4,326 posts
Posted by upsidedown119 > 2015-03-09 11:44 | Report Abuse
Kenanga confirms out-perform call though.