Jiankun buys 93 freehold subdivided land in Seri Kembangan for RM22.5m

KUALA LUMPUR (Apr 6): Jiankun International Bhd has proposed to acquire 93 freehold vacant subdivided plots — with a combined land area of 101,517 sq ft — in Seri Kembangan, Selangor, for RM22.5 million, for a new terrace-house development costing some RM50 million.

In a filing with Bursa Malaysia today, Jiankun's (fundamental: 0.6; valuation: 0.6) wholly owned subsidiary Nagamas Bizworks Sdn Bhd has entered into a conditional sale and purchase agreement (SPA) with Bison Ventures Sdn Bhd (BVSB) today.

Jiankun said the land, previously identified as parent Lot 5682, was originally approved by the planning authority on Jan 7, 2008 for the development of 93 units of three-storey terrace houses.

“Following the approval, 93 individual qualified titles identified as PT 71831 to PT 71923 were issued.

“A new layout plan amending the original approved plan mentioned above was subsequently approved by the planning authority on March 4, 2015 for the development of 84 units of three-storey terrace houses. The remaining 9 plots (PT 71831 to PT 71839) will be surrendered to serve as open green space for the overall development,” said Jiankun.

It said the proposed acquisition is in line with the group's corporate strategy to develop strategically located land in high-density areas, with easy accessibility and significant gross development value, within a short turnaround time.

"By developing landed properties on the land, the group would also be able to implement the development on a staggered basis and control the pace of construction in response to the take-up rate for a more effective cashflow management," it said.

Jiankun added that the future development of the plots of land is expected to enhance the future earnings potential of the group.

The purchase price for the land is expected to be funded via a combination of internally-generated funds and bank borrowings. The deal is expected to be completed in the fourth quarter of 2015.

“Save for the costs relating to the proposed development plan for the land, of approximately RM50 million, no other material additional financial commitment is expected to be incurred by the group in relation to the proposed acquisition,” it added.

The plots of land are located about 20 kilometres south of Kuala Lumpur city centre and about 15 kilometres north-east of Putrajaya.

Jiankun closed one sen or 2.99% higher at 34.5 sen, giving it a market capitalisation of RM52.33 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)