KEN Holdings Berhad

General Review

Looking on the bearish sentiment of the market, it buys me a lot of courage and guts to cut loss on the wrong pick and continue to polish on my analysis. Along the way, I hope that this blog will continue to pack investors with knowledge on their investment journey besides giving a valuable clue on a stock picks. Stay undiscovered; KEN Holdings is under my observation for sometimes. With the double up potential upside in FY2015/2016, it remains attractive, soon to be discovered.

Business Model

Ken Holdings Berhad is a Malaysia based company engaged in investment holding and provision of management services. Through its subsidiaries, the Company operates in two segments: Construction and Property development. Its Construction segment is involved in specialist engineering services, turnkey contracts, building and civil and engineering works, land reclamation, dredging, marine and civil engineering.

Financials

(Source: malaysianstock.biz)

(Source: klse.i3investor.com)

2013 Annual Report

-Looking into KEN 2013 annual report, revenue and profit growth remains flat over years; however there is are significant improvement in Profit-Margin wise from FY2009

-KEN Holding stands on a NET-CASH position with ZERO-GEARING

-Total Asset of RM279 million, Total Liability of RM95 million & Total Equity of RM183 million

-Retained-Earning of RM87 million which is qualified to issue Bonus 2 for 1

-NTA of RM0.99 Per-Share

-Market-Capitalisation of 200 Million 

-Unbilled Sales of RM60 Million

List of Properties

 KEN, buying into the future

KEN sits on an average Financial-Statement as to compare to its construction peers. The idea of building a greener rated development surely impresses a lot of investors and buyer, besides a competitive, reasonable rate of prices among competitors. The plan of developing RM2 Billion GDV worth of project in the coming 2 years has attracted a lot of investor’s attention to buy into their future. Currently, KEN has line up 4 hotel and 1 office project namely on, Genting-Highland, Johor-Bahru, Kota-Bharu, Shah-Alam, and Kuala Lumpur respectively in the mix strategy of sales and recurring income. On a recent event, KEN also launches its high-rise condominium (KEN Rimba Condominium 1) which is part of the phase 5 of its KEN Rimba Township Development with the estimate GDV of RM330 Million and to be completed by 2018 followed by KEN Rimba Condominium 2; expected to be launch by end of 2014 or early 2015 with the approximately same amount of GDV. Apart from that, KEN also plans on developing its recent acquired land in Johor-Bahru (KEN JBCC), which carries an estimated GDV of RM1.2 Billion. The 22.78 acres land is strategically located 2.5 Kilometres from Woodlands Checkpoint and the development comprises of retail space, hotel, services suit, office and medical-centre. Earlier, KEN has invested RM120 Million in developing KEN-TTDI (a platinum grade green office tower) which provides them with RM15 Million gross recurring income upon completion in early FY2015.

(KEN RIMBA LOCATION)

(KEN JBCC LOCATION)

Upcoming forecast

-Net Cash flow on recurring income from KEN-TTDI 6% of RM120 Million (RM7.2 Million per annum)

-Remaining collection from KEN Rimba Jimbaran Residences of RM10 Million (Assume 20% profit margin on total GDV of RM150 Million) / 3 years

-KEN JBCC with RM1.2 Billion GDV 10-15 years (Assume 20% profit margin in 12.5 years) Net profit of RM19.2 Million per annum

-KEN Rimba Condominium 1 in 3 years (Assume 20% profit margin of total GDV of RM330 Million) Net profit of RM22 Million per annum

-4 hotels and 1 office project with the estimated GDV of RM2 Billion in 15 years (Assume 20% profit margin of total GDV) Net profit of RM26.6 Million per annum

-With the estimated RM85 Million net profit in near term, channelling to 179 Million share-outstanding, which is staggering RM0.47 earning per-share, and assume it is trading at 8 to 10 times fair PE, it will be valued at RM3.76-RM4.70 cents

-Short-Term Target price RM1.50

-Long-Term Target price RM3.00