KSL share price jumps over 30% in July

KUALA LUMPUR: KSL Holdings Bhd’s share price soared over 30% in July to close at a 10-year high of RM3 yesterday, with its market capitalisation currently exceeding the RM1 billion mark.

Yesterday, its share price gained 21 sen or 7.5% to RM3, hitting an intra-day high of RM3.03. The hardly-traded counter’s trading volume ballooned to 7.1 million shares, the highest since March.

Dealers noted that the increased interest in KSL could be in anticipation of improved quarterly earnings ahead of the results season in August.

The company delivered a strong set of results for the first quarter ended March 31. Its net profit grew 27.5% to RM61 million from RM47.85 million in the previous corresponding period, driven by its recurring rental income from the shopping mall in Johor Baru. Earnings per share expanded to 15.8 sen from 12.39 sen previously.

KSL City — its crown jewel — an integrated development comprising a commercial podium of retail shops, hypermarkets, hotels and condominiums provides a steady recurring income of at least RM100 million annually.

The Edge weekly reported on June 27 that the property developer’s land bank was undervalued as a large bulk of it had not been revalued after the escalation in land prices in Johor and the Klang Valley in recent years.

In financial year 2013 ended Dec 31, KSL’s property investment division generated a profit before tax (PBT) of RM107.12 million or 42% of the company’s total PBT of RM256.48 million.

The property investment division generated revenue of RM134.73 million, of which some RM71.81 million was contributed by rental income, while RM62.8 million was from its hotel, and food and beverage operations.

KSL had been off the radar screens of property analysts as little information had been disseminated to the investing public. HLIB Research and Affin Research had ceased coverage of the stock due to this reason.

KSL is controlled by the Ku family, who holds a 37.47% stake, via Premiere Sector Sdn Bhd.

This article first appeared in The Edge Financial Daily, on August 1, 2014.