Sunday, July 8, 2012

About MKH (Metro Kajang)

None of big institutional funds have stakes in MKH. The reason being is that MKH’s business portfolio includes a non-halal livestock business.

MKH is among the property companies with a fairly balanced business portfolio. It owns a sizeable landbank of 500 acres, mostly in the Kajang Sememyih area, as well as 16000 ha of oil palm estates in East Kalimantan . The plantation will be maturing in the next few years, hence providing a catalyst for the group.

PNB’s Skim Amanah Saham Bumiputera owned an 8.6% stake in MKH in 2004 but exited in 2009. But it has Public Bank Group Officers’ Retirement Benefits Fund, which held a 9.04% stake and Public Smallcap Fund with 0.81% and PCB Asset Management Sdn Bhd with a 0.42% stake as at end 2010.

Chen, together with his brothers and other family mambers own over 45% stake of MKH.

Its net asset per share as at Sept 30, 2011 stood at 2.77.

MKH had disposed of its non halal livestock farming business for rm64 million cash. MKH will utilise about rm30 million to pare down group borrowings, which stood at rm280.83 million as at Sept 30, 2011 while the remaining rm34 million will be used for working capital. The group held about rm65.8 million cash as at Sept 30, 2011.

The proceeds from the disposal will further improve its cash position for acquisition of more development land bank and plantation estates.

Its disposal of its non halal livestock farming business was beginning to attract institutional investors that seek syariah compliant stocks as well as government linked funds as EPF, LTH and PNB.
After exiting its non halal business, it will focus on its core business in property development and oil palm plantation in Indonesia . It still has close to 242.8 ha of land bank in Kajang/Sememyih that carried at less than rm10 psf, and have mostly converted for development purposes. The group’s borrowings stood at rm315 million as at Sept 30, 2011 translated into a net gearing of 42.9% which is set to reduce with the rm64 million proceeds from the disposal. Its book value stood at rm2.77
MKH had unbilled sales of rm405 million as at Nov 30, 2011.

MKH’s current 600 acre landbank, much of which has been converted for housing purposes, total estimated GDV is about rm4.5 billion over seven years.

However its plantations will be the catalyst for the group
In April 2012 its wholly owned unit of MKH has been awarded a turnkey construction contract worth a total of rm675 million over 5 years by Puncak Alam Resources to build residential and commercial properties in Kuala Selgnaor.
Its rm675 million turnkey construction contract from Puncak Alam Resources Sdn Bhd is considered unusual and puzzling. The group’s construction outfit makes only a small margin compared to its core expertise as a property developer. However its MD said MKH is open to taking on more turnkey construction contracts if the profit margin is satisfactory. The TCC project awarded to MKH’s wholly owned subsidiary is for the construction of residential and commercial properties over a period of five years in Kuala Selangor on about 223ha land, translating into rm135 million per year.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.