Showing posts with label MKH. Show all posts
Trading Idea - MKH Berhad - Better Years Ahead
Introduction
Since 1979, MKH has helped enhance lifestyle standards through innovation and creativity.
MKH Berhad (Formerly Known As Metro Kajang Holdings Berhad) is a respected and established property developer with a reputation for cost-effective well managed projects and is listed in the Main Market of Bursa Malaysia.
MKH's current portfolio comprises a range of developments across all property sectors which are mainly located in Kajang, Damansara, Semenyih, Serdang and Melawati. To date, it has developed and undertaken more than 30,000 units of mixed development projects with a value exceeding RM6.0 billion. In addition, the MKH Berhad is also involved in oil palm plantation, project management, property investment, construction and furniture manufacturing.
Highlights
With a root in property development and construction, MKH has over the years branched out into the plantation industry through the acquisition of oil palm business in Indonesia. The business has started to bear fruits in the current financial year and contributed positively to its top and bottom lines. Such diversification strategy shows that the management is actively pursuing business opportunities and yet has so far managed business expansion in a profitable manner.
With Q1 2013 results yielding an EPS of 10.68 cents, full year results are likely to surpass past years and the Group is well poised for a record year in its history. Annualized EPS is likely to be around 30 cents - 40 cents, suggesting a relatively low PE of around 5 to 7 times. ROE is also likely to be in the double digit. On top of that, the company also has a stable dividend record, distributing 5 cents (3.75 cents nett) per annum.
Technically, MKH is in a no-resistance zone with a near-term target price of RM3.00 and longer-term target price of RM5.00. Note that this trend finds similarity with Sunway Berhad as both are in long-term secular uptrend. This is further backed up by the company's solid fundamentals and lucrative businesses.
For further information on MKH's financials, please see link below:
MKH Historical Financials
MKH Bhd climbed to their highest in 15 years
Formerly known as Metro Kajang Holdings Bhd, MKH closed three sen higher at RM1.89 yesterday, giving it a market capitalisation of RM500.1 million, the highest since October 1997.
The counter has gained about 16.7% since it announced on Dec 29, 2011 the sale of its pig farm and pork retailing business to Thailand’s agricultural giant Charoen Pokphand Foods Pcl for RM64 million. The sale was completed on Jan 16.
MKH’s non-halal livestock farming business comprised Makin Jernih Sdn Bhd (MJSB) and its subsidiaries — Chau Yang Farming Sdn Bhd, Tip Top Meat Sdn Bhd and AA Meat Shop Sdn Bhd.
Fund managers said MKH’s 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 such as Employees Provident Fund, Lembaga Tabung Haji and Permodalan Nasional Bhd (PNB).
“MKH can be exciting. It still has close to 242.8ha of landbank in Kajang/Semenyih that are carried at less than RM10 per square foot, and have mostly converted for development purposes. Its 16,000ha plantation operations in Indonesia also look promising,” said a fund manager.
The Edge weekly reported last month that MKH’s main rationale for exiting its non-halal business, which it ventured into in 2006, was to focus on its core business in property development and oil palm plantation in Indonesia, which is set to become a major earnings contributor to the group in the next five years.
MKH had also said it hoped to get on the radar of analysts and the syariah or government-linked funds after the disposal.
For FY11 ended Sept 30, 2011, MKH posted a net profit of RM38.36 million on the back of RM342.35 million in revenue.
While the group’s total net borrowings of RM315 million as at Sept 30 translated into a net gearing of 42.9% against shareholders’ funds of RM734.21 million, the ratio is set to reduce with the RM64 million proceeds from the disposal. MKH’s net assets per share was at RM2.77.
This article appeared in The Edge Financial Daily, February 3, 2012.
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