Keck Seng Berhad is undervalued |
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Written by Ben
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Saturday, 12 January 2008 |
The escalating price of palm oil prompts me to take a look at Keck Seng Bhd. To me this stock is definitely undervalued.
As at 30.12.2006, the company has 10,000 acres of land in Johor. These lands are mostly in oil palm and of which are 3 housing estates namely: Tanjong Puteri Resort, Taman Daya and Bandar Baru Kangar. These developments are all in the Iskandar Region which is an economic zone established under the 9th Malaysia Plan for fast growth.
The company has under “other investments” RM150, 411,000. The market value of these investments as at year end 2006 was RM570, 784,000. I understand that about 75% of these investments are in quoted shares of Wilmar International Ltd which is controlled by Robert Kuok. As year 2007 is a bullish year for the stock market, these quoted shares should be worth very much more by now.
For your info, Keck Seng is the 4th largest shareholder of Chin Teck Berhad which is a plantation stock. Chin Teck closed at RM9 last Friday. It was selling at about RM5.45 per share a year ago.
All in all, I consider Keck Seng cheap at its last traded price of RM5.15 per share. This counter is a quiet and an unpopular stock. Only those who have the patience and the ability to buy and keep for the longer term will find it rewarding.
Stock prices can go up and down. Do consult professional advice before you make any commitments. This blog is not responsible for your winnings or losses. As usual you buy, sell or hold at your own risk absolutely.
Cheers and best of luck.
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