Keck Seng

There is speculation of a corporate exercise cum special dividend at keck Seng Bhd.

It is a Singaporean run and low profile property and oil palm estate owner

Market observers opine that its asset are worth rm8.60 per share.

Its assets include 1850 acres of land surrounding JB that were valued 30 years ago. It is primed for a major re rating … and a share bumper dividend by virtue of its section 108 (Tax Credit) balance that expires in Dec 2013.

It was also speculated that its assets can spun off into a REIT.

Its businesses range from oil palm estates and property development to share investment and running hotels and resorts, is only one part of the wider Keck Seng group, the other vehicles of which include HK listed Keck Seng Investments Ltd and Keck Seng Pte Ltd.

The group’s assets include residential properties in Singapore, KL, Johor and Macau. It also owns Riverview Hotel and the Keck Seng Tower office block in Singgapore, the Sheraton Saigon Hotel & Towers and Caravelle Hotel in Vietnam, Holiday Inn Riverside Wuhan, Sheraton Ottawa Hotel and W San Francisco.

Of these assets, the Doubletree Alan Waikiki Hotel in Hawaii. Doubletree Toronto Airpot Hotel and Tanjung Puteri Golf Resort in Johor are housed under Keck Seng Malaysia.

At this juncture, what is certain is that a lot more can be done to unlock the value of Keck Seng Malaysia whose cash pile doubled in FY2010 after it acquired a takeover offer for its Parkway Holdings Ltd shares. Keck Seng made a bonus issue in 2010 bit has paid out less than rm30 million in dividends a year.

Cash and short term investments stood at rm761 million or rm2.11 per share as at Dec 31 2012. Including investment securities, Keck Seng’s liquidity assets made up of rm3.47 per share.

This means investors pay only rm593 million (rm1.63 per sharea) for the rest of Keck Seng’s assets, which include plantation, the hotel in Hawaii and Toronto and a mall in Johor. Most of these assets are virtually free given that the Menera Keck Seng office block in Jalan Bukit Bintang is carried in its books at a 1996 valuation of only rm56 million or rm212 psf floor area.

Market observers value Keck Seng’s plantations at rm383 million or rm1.06 per share. The company has 3411ha of mature estates in Johor with palm trees averahing 16 years plus 246ha of immature estates.

Its biggest earnings generators were property development, share investments. Plantations and hotels.

Keck Seng is only about 30% owned by the Singapore based Ho family led by its executive chairman Ho Kian Guan and his brother and MD Datuk Ho Kian Hock. 66% of the Keck Seng is in the hands of 30 shareholders.