It is too undervalue till market can't ignore it forever. Because, the lousy property counters are all up to moon.. The reputation counter can't be so pasar malam price..
Why not KSL rated with PE34 like CHGP? Ksl is much better than CHGP with PE34 =$13. 60? Sound weird... Then Pe10 = $4.00 much reasonable with many new launch in King home = Johor
But I check the FCF method used by the AI platform and found that the projected free cashflows for KSL were much higher than I expected - RM489m in 2024 rising to RM1,600m in 2033. KSL recorded FCF of close to RM400m in 2023 if I excluded a unusually big development expenditure of RM78.3m for a piece of land.
Its FCF may double up to RM800 million a year 10 years from now, i.e. in 2033 as the company raises rental income in the shopping malls and hotels over the years and enjoys higher profit margin from new housing development in later phases in its maturing townships.
SO I would just knock off 50% from SimplyWllSt valuation, yet still getting a good valuation of RM7.59 per share, a good 320% upside from the current price.
Last 2 day daily volumn of 9m share tell us that investors are now buying KSL solid earning story even without dividend, which is similar to internet stock.
Stock can continue uptrend with growth drivers remain intact as KSL continue to launch more JB project, higher selling price and thus higher profit margin.
Thanks dragon supported data with FCF.. Ksl balance sheet is way too good to believe... I am a little bit doubt because the share price is not reflected the truth value.. Too undervalue. I am not sure what went wrong. Perhaps, some said without dividend policy so less attractive.
However, KSL continue demonstrated the good earning untill market has no choice to push its up because EUPE or CHGP which are smaller scale firm has push up to crazy PE.
I will foresee the undervalue KSL share price will not last long.. Some people has rushing in to grab the shares last week.. It shld continue the uptrend...
I think one of the reasons why KSL share price has been depressed is that the company has not declared any dividend since 2015, though it made hundreds of millions of ringgit in profits.
You see other property developers do pay out dividends consistently though the dividend yields are low at 1% to max 5%.
That's the reason why the cash balance in KSL has ballooned to over RM500 million with little debts. I think the company did not pay out dividend in 2016-2019 as it prepared to buy over the large piece of land in Klang to branch out from Johor, and to prepare necessary cash to launch the property project in Klang township (initial development costs likeland cost and infra costs might have amounted to over RM100m or so) and to build the Klang Esplanade shopping mall and hotels there.
Now with all this major capex already done and shopping mall & hotels all performing well (note that its shopping malls and hotels in JB and Klang generated about RM120 million pretax profit in 2023), I reckon that KSL may not need to preserve so much cash in the balance sheet, unless it has identified another piece of land for new projects.
I predict that KSL may be willing to declare maiden dividends in 2024 as it has excess cash and strong operating cashflows to support a dividend policy of easily 30%.
It is only natural for it to have some profit taking after a strong 2-day rally. It provides a good chance to those who missed out earlier to gain entry and for me to accumulate more at lower prices.
Last bonus issue of 1 for 1 was in 2014 when the net profit was RM340 mil. Now is 10 yrs later and the full yr profit is RM 414 mil and nta Rm 3.6. Can we have another 1 for 1 bonus or better still 2 for 1 bonus?
If KSL directors pay 30% profits as dividend to share holders, the KSL price can easily go up to RM3.00, and go further even more later. KSL is the best earning property developer in Malaysia.
And better still follow the footsteps of UOA Development and convert its rich assets into REITS.This way,it will enrich both its shareholders and founding Directors.
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....
stkoay
6,490 posts
Posted by stkoay > 2024-04-04 16:48 | Report Abuse
Wow...top gainer 💪