- According to AllianceDBS Research, MKH’s strong foothold in Kajang and Semenyih makes it the largest beneficiary of the improved public transport connectivity via two mass rapid transit (MRT) stations within Kajang, which has also boosted its property sales.
- The group said the advantage of low land cost within the growing Kajang/Semenyih corridor, giving it pricing flexibility. Record unbilled sales stood at RM855 million, 1.2 times of its FY16 property revenue.
- Additionally, the group is expected to continue to register strong plantation earnings growth as the favourable age profile of its palm trees would partly offset the impact of weak crude palm oil prices.
- At the current juncture, the firm’s plantation business is already self-sustaining and the company has proceeded to pare down its US$85 million borrowing since March.
Significance: Given the positive prospects, the research house has maintained its ‘Buy’ call on the stock, with a target price of RM2.80 noting that MKH’s fundamentals remain strong, despite share prices having been beaten down by because of unfavourable general sentiments towards its core business segments (plantation and property).
Contributed by Shares Investment
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