Hot Stock SHL rises 8.2%, stock seen as undervalued

Hot Stock SHL rises 8.2%, stock seen as undervalued
Business & Markets 2014
Written by Jeffrey Tan of theedgemalaysia.com
Tuesday, 22 July 2014 11:06

KUALA LUMPUR (July 22): SHL Consolidated Bhd rose as much as 8.2% as the commercial and residential developer is seen to be undervalued by analysts.

In a note today, Public Investment Bank Research opined the company could be worth at least RM1 billion or RM4.26 per share.

At 10.49 am, SHL gained 14 sen or 6% to RM2.46. The fifth top gainer saw trades of 542,700 shares. It had earlier hit a high of RM2.51.

“Currently, we think its land bank and properties stand at a market value of not less than RM1 billion and could potentially double to RM2 billion, if the redevelopment plan starts to kick in,” said the Public IB research team.

The research team said this was a far cry as compared to SHL’s current market capitalisation of RM561 million.

The research team believes that SHL, which might redevelop and monetise its 160-acre golf course land in Bandar Sungai Long, would see the piece of land fetch a market value of RM130 per square feet or RM900 million given the matured township status of Bandar Sungai Long.

Public IB recommended a fair value of RM4.26 for the firm but did not rate the stock.

Meanwhile, a dealer familiar with the stock told theedgemalaysia.com that SHL’s rise today could be attributed to its dividend announcement of 5 sen per share.

“It had recently announced a final dividend of 5 sen per share in FY14,” said the dealer over the telephone.

The dealer added SHL is seen to be ‘very well managed’, noting that management is ‘prudent’ in the firm’s operations.

“SHL has a lot of cash as reflected by its strong balance sheet,” the dealer added.