Hot Stock Keck Seng hits record high on renewed expectation of bumper dividend, land revaluation

Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Thursday, 31 October 2013 13:06
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KUALA LUMPUR (Oct 31): Shares of Keck Seng (Malaysia) Bhd hit record high
today on renewed speculation of a bumper dividend as well as a re-valution of
its land in Johor, said dealers.
At 12.30 pm noon break today, Kek Seng soared 43 sen or 6.6% to RM6.92 on
trades of 476,700 shares. The top gainer had earlier hit a high of RM6.96.
“Expectation of a high dividend is built up again as the year is coming to an
end,” said a senior dealer.
This is because the government has granted a six-year period between
January 1, 2008 and December 31, 2013 to allow companies with unused
balances to continue paying franked dividends during the period, he said.
HwangDBS Vickers Research said last December Keck Seng might reward
shareholders with a bumper dividend of 96 sen a share with its tax credit
balance, but this has not come about so far.
Another dealer said investors believe the plantation and property firm will soon
be conducting a revalution of its priced land in Johor state, which is a hot spot
for property development and foreign investment now.
“Investors who buy Keck Seng are keeping the stock to wait for the good news
on dividend as well as land revaluation. They are expecting the share price to
go up further,” said the dealer.
On paper, the net asset per share of Keck Seng as at end-June 2013 was
RM5.25, but HwangDBS said in December 2012 it was worth RM8.60 then.
Others in the market have given a higher value to the stock, estimating it to be
above RM15 if there is a revaluation of its land bank.
Keck Seng’s 740 ha (1,850 acres) of prime land surrounding Johor Bahru has not been revalued for the past 32 years, according to
HwangDBS. These tracts have book values of between 50 sen and RM4.50 a square foot.
The share price of the Singaporean-run, low-profile company had the last run in March 2013, when it hit a high RM5.30 on March 12.
The company has businesses in manufacturing, hotels and resorts, property and plantation.
For the second quarter to June 2013, the group posted a net profit of RM41.4 million, up from RM26.4 million in the second quarter of
2012.

    

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