KSL: Rising In A Hurry

Result Update

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.

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.