Wednesday, July 25, 2012

MK Land… dated July 2012

The group's degearing exercise and business streamlining (liquidated ascertained damages issues and disposal of non-core assets) are within expectations.

The group is toying with the idea of paying dividends again in line with the group's improved profitability and strengthened balance sheet.

There are RM400mil of unbilled sales. MK Land will continue to focus on pushing the remaining units in Rafflesia (semi-Ds) and Metropolitan Sq (condominiums) with a combined RM760mil in gross development value (GDV).

The group is exploring more new products such as bungalows and condominiums, possibly in the next one to two years.

Separately, MK Land reassured that the liquidated ascertained damages issues are now behind them, and the priority now is to complete the delayed project.

Estimate MK Land still has about RM90mil outstanding from the previous land sale, which will definitely help the group to reorganise its debt structure to be more efficient.

MK Land's total debt has improved by 10.6% sequentially from RM220.2mil to RM197mil, which is in line with the group's plan to reduce debt. Net gearing is 0.11 times now, and do not discount the possibility of further land sale which will put the group comfortably in net cash position.

A 25-acre Daman-sara Perdana and the 55-acre Setiawangsa land sale could add about RM320mil to the war chest, or equivalent to the group's market capitalisation now.

MK Land is the largest landowner (about 170 acres net land) near the Taman Tun Dr Ismail-Damansara-Puchong Highway interchange should benefit from rising land prices and positive catalysts such as potential dividend or land sale could give the much needed sparks to the stock.

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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.