Author: benjamin2013 |
Publish date: Sun, 28 Sep 17:10
This gem has been undervalued for far too long. It goes back to 2008,
before the emergence of Mark Mobius in 2010 as a shareholder. Yes, it is
none other but Mark Mobius himself, the famous fund manager of Franklin
Templeton, the executive chairman of Templeton Emerging Markets Group.
Mark Mobius was so impressed with KSL after meetings with the key
management and bought a 5% stake into it. He then promised to hold the
stock for very long term, seeing that it was so undervalued at PE of
less than 5 times, with high growth potential and recurring income. This
was followed by Public Mutual and Julius Baer with significant stakes
held until today. In the last two months, some have taken notice of it,
but it is still very undervalued.
Today, unlike in 2010, KSL has high level of recurring incomes, thanks
to its prudent managemnt, who built KSL City Mall and Resort during the
financial crisis. For FY 2013, recurring income was RM135mn, with 15%
growth expected for the next three years. Recurring EPS was 15sen and
recurring FY 2015f EPS is 20sen.
Assuming 6% yield, its
investment properties are worth RM1.3bn or RM3.33 per share. At current
price of 4.66, its property development business is selling at RM1.33 or
RM519mn only. With RM519mn, you can own more than 2,000 acres of land in Johor and Klang Valley worth more than RM10bn GDV
. The 446acres land at Klang alone is worth more than RM1bn. If this is not undervalued, I don’t know what your definition is for undervalued!
KSL management is smart, and they knew it is not yet the right time to
do a REIT offering as the mall and resort is still recording double
digit growth. Probbly next year or 2016 is the best time. Furthermore,
recurring income is expected to MORE THAN DOUBLE after the completion of
KSL City Mall 2 in Klang, due to start construction next year. With
over 1.8mn retail space, the new mall is 3 TIMES the size of KSL City
Mall in Johor.
Having been undervalued for more than 5 years, KSL finally started to
move in July this year, thanks to articles by The Edge and The Star and a
report by Kenanga. The gem, having been uncovered, still has not yet
reached its fair value! Why? This is because it is still undercovered!
Only Kenanga, the most enterprising research house today, came out with a
fair value, at RM6.63, a 50% discount to its RNAV of over RM13.
The longer a stock is undervalued, the longer and higher it will go in
order to reach its fair value. A good example is Scientex. The stock has
been selling at only 5x PER for several years and after being
discovered, it promptly move up. But not in several days or months.
After more than 1 year, it is now selling near its fair value. Today,
Scientex is selling at 2.2x P/B and 12x PER.
It is time to revise my target price for KSL. Assuming 2014 EPS of 72 sen, the fair value for KSL is between
RM7.20 and RM8.64
with PER of 10-12x. My forecast for EPS is conservative, judging its
unbilled sales of RM1bn (RM1.5bn by year end) which ensure earnings for
more than 2.5 years. Another catalyst is dividend.
At 30% dividend payout, yield is very high, at 4.5%,
for a property developer! Both unbilled sales and dividend yield are
better than Mah Sing, though the latter is already impressive.
KSL should be selling at more than 10x PER due to its high returns and
profit margins, earnings visibility and increased recognition after the
management opened up to fund managers and analysts. With target price of
RM7.20 to RM8.64, KSL offers upside of more than 50% to the patient
investors.
（香
港29日讯）香港警察昨日施放催泪弹驱赶示威者，激发起演艺人的一腔热血和良知，走到前线挺身力挺学生，葛民辉以粗口谐音骂特首梁振英；黄秋生谴责政府手
法似暴徒，愚蠢傲慢；何韵诗求演艺界放下利益为市民发声，怒吼：「这个政府疯了！」杜汶泽更在面子书上怒咒香港特首！ 
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