Hot Stock Keck Seng falls on disappointing dividend

by **Cals** Wed 24 Apr 2013, 13:47

Hot Stock Keck Seng falls on disappointing dividend
Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Wednesday, 24 April 2013 12:26

A + / A - / Reset
KUALA LUMPUR (April 24): KECK SENG (M) BHD [] fell in morning trades after investors were disappointed with the small dividend it proposed yesterday.

At 11.56 am, Keck Seng fell 11 sen or 2.2% to RM4.92 on trades of 395,200 shares, after touching a low of RM4.90 earlier.

Its net asset per share at end-2012 stood at RM5.12, according to its latest results.

The property development and oil palm PLANTATION [] company last night proposed a final dividend of 6% less 25% tax in respect of the financial year ended Dec 31, 2012. Total dividend given out in 2011 was 10 sen.

This lower dividend was proposed despite the company’s basic earnings per share had risen to 23.44 sen in 2012, up from 20.73 sen in 2011.

“Expectations of a good dividend have been building up after a report by HwangDBS Vickers Research last December,” said a senior dealer.

HwangDBS said then Keck Seng might reward shareholders with a bumper dividend of 96 sen a share with its tax credit balance.

The government has granted a six-year transitional period between January 1, 2008 and December 31, 2013 to allow companies with unused balances to continue paying franked dividends during the period.

In addition, Keck Seng's Johor landbank is also seen as a catalyst to the company's share price.

According to HwangDBS, Keck Seng’s 740 ha (1,850 acres) of prime land surrounding Johor Bahru has not been revalued for the past 32 years.

These tracts have book values of between 50 sen and 4.50 a square foot. The research house estimated that every RM5 psf land price increase will raise HwangDBS's fair value for Keck Seng by 12%.

HwangDBS’s fair value for Keck Seng was RM6 per share then.