KSL's result for QE31/12/2016 was released on February 27. Net profit rose 200% q-o-q or 162% y-o-y to RM167 million. Revenue rose 41% q-o-q or 142% y-o-y to RM231 million. Profits rose q-o-q due to (1) the change in sales mixed and percentage of completion of the existing main on-going projects of the Group, especially in Johor Bahru and Klang and (2) the gain of approximately RM112.7 million from the fair value adjustment of investment properties. If the latter extraordinary one-off gain were excluded, KSL's net profit would be lowered to RM54 million (or a slight drop from RM56 million reported in QE30/9/2016.
Table: KSL's last 8 quarterly results
Graph: KSL's last 49 quarterly results
Valuation
KSL (at RM1.28 yesterday) is now trading at a trailing PER of 4.1 times (based on last 4 quarters' EPS of 31 sen). If we excluded the huge gain from fair value adjustment in QE30/9/2016, the last 4 quarters' EPS would drop to 20 sen and the trailing PER would rise to 6.4 times. At either PERs, KSL is deemed fairly valued.
Technical Outlook
KSL has broken above its long-term downtrend line, RR at RM1.05 in early February. Its immediate support & resistance will come from the horizontal lines at RM1.20 & RM1.35 respectively.
Chart: KSL's monthly chart as at Mar 8, 2017 (Source: Shareinvestor.com)
Conclusion
Based on satisfactory financial performance, fair valuation & bullish technical outlook, KSL's rating is revised from a HOLD to a BUY ON WEAKNESS.
Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.
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