If capital cost is recovered at 40% sales of the project 'on the record', then above that will be contribution margin to KSL's group overhead costs i.e. a contribution to gross profit before deducting overhead costs e.g. administration costs. Since KSL, based on its previous accounts, has an overall net profit margin of 24.5% for its property development projects, the project itself won't yield a net profit for KSL until at least 75% of the project are sold.
@smartly, most construction labour are illegal. Chinese construction labour gives the best value for money since they are strict on deadlines. Plantation use mainly legal Indon labour and have been using for decades. They are worst affected since only certain types (e.g. Bugis) are suitable for oil palm plantation especially harvesting.
But those KSL insider bangsat liars are cutting the nose to spite the face. They sap confidence in an otherwise blue-chip company. Compare them with Hap Seng's management. Hap Seng's price is going steadily into the stratosphere!
The earning of KSL is backed by its strong recurring income generating from its cash cow KSL City.
It is an integrated commercial development in the city centre of Johor Bahru, comprising KSL City Mall and the five-star KSL Hotel & Resort.Established on 2010, KSL city mall is strategically located 10min away from the Malaysia-Singapore immigration. It has a net lettable area of almost 750k sqft. The mall is currently only valued at RM300mil at book. (KSl currently trading at 0.7 book) The mall generates around RM75 million a year in the form of rental. Using a capitalization method at a conservative rate of 8%, KSl city mall should worth around RM937.5mil, which is almost 3x above the current book value.
For Q3, revenue generated from rental + food & beverage (KSL city mall + hotel ) totaled RM100 mil or RM133 mil (annualized revenue). This should provide a good buttress for the slow-down in property market.
Furthermore, it has a dividend policy of 40%. Together with the strong recurring income, capability to distribute dividend should remain intact.
This stock was spoiled by KSL's management giving a false forecast in 2014. To restore confidence, a very good dividend and superior performance is required in the coming quarter report.
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....
yfchong
5,879 posts
Posted by yfchong > 2016-01-31 21:38 | Report Abuse
Tomolow I see how