KSL: Cheaper But Still Good?

Result Update

For QE30/6/2016, KSL's net profit  rose 19% q-o-q but dropped 26% y-o-y to RM52 million. Revenue dropped 9% q-o-q or 21% y-o-y to RM139 million. Despite 9%-drop in revenue q-o-q, gross profit rose by RM1.7 million due to changes in sales mix and percentage of completion of on-going development projects. Higher gross profit; increased other income of RM1.3 million; and drop in selling and marketing expenses of RM1.7 million and administrative expenses of RM6.4 million, helped to boost PBT by 19% q-o-q to RM67 million.


Table: KSL's last 8 quarterly results


Chart 1: KSL's last 47 quarterly results

Valuation

KSL (at RM1.16 as at 4.35pm) is now trading at a trailing PER of 5.5 times (based on last 4 quarters' EPS of 21 sen). At this PER, KSL is deemed fairly valued.

Technical Outlook

KSL has dropped back all the way to its long-term uptrend line support at RM1.10. If this support can hold, KSL should slowly recover along with any recovery in the property sector.
 

Chart 2: KSL's monthly chart as at Sep 6, 2016 (Source: Shareinvestor.com)

Conclusion

Despite weaker financial performance, KSL is maintained as a HOLD based on fair valuation & neutral technical outlook.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, KSL.