Accumulate for an upside target to 19sen
Company background
KM’s key businesses are property development and property investment in
Kedah. It specializes in low and medium cost residential projects, commercial
offices, light industrial factory buildings for SMIs. KM has established a name
and solid reputation, especially in developing affordable quality properties,
delivered on timely basis.
KM’s major flagship projects include Taman Mutiara, Taman Mahsuri and
Taman Lagenda. Due to its strong management, it has consistently achieved
an average net profit margin of 21% over the last 10 years.
Technical outlook: Oversold, accumulate at 15sen
KM’s share price has surged from 52-wk low of RM0.105 in Mar 09 to 52-wk
high of RM0.19 in May 09 before consolidating range bound between RM0.15
to RM0.175 for the last nine months.
We are optimistic of KM’s mid to long-term technical outlook as share prices
continue to maintain its posture along the RM0.15 (250-d SMA) over the past 9
months. Key support is RM0.14 (61.8%FR from RM0.105-0.19) whilst the
upside resistance levels are RM0.16 (38.2%FR), RM0.17 (23.6% FR) and
RM0.18 (8-month high).
12M target price at RM0.19
Our 12-month target is RM0.19, based on 8.6x FY10 PE (in line with its 5-year
average 9x PE) and 0.83x PBV (5-year average 0.9x). At 8.6x, KM’s target PE
is also trading at 25% discount to its peers historical PE of 11.4x.
At 15.5sen, KM’s 9.7% dividend yield is the highest in the property sector.
Furthermore, its 7.1sen net cash per share is 46% of current share price. On an
ex-cash basis, KM is only trading at 3.8x FY10E P/E. Therefore, we feel that its
downside risk is limited.
6 comments:
horse
So, r u buying keladi as well? where you get your source from?
ya, intend to buy some.
This i got it from the investment bank.
Good, lets make money on these stock together :)
hng and horse
at what price do you guys intend to unload this stock? of course in research report mentioning TP of 19sen, but not mentioning when it can achieve that.
tq again..
also bought small stake in this co. my other money stuck with other counters
Drsaleh,
I think that depend the vol you purchase, if you buy in term of millions then every 0.005 move is money/profit. If you bought at small quantity, most likely you need higher bid 0.01 or 0.015 to money.
I will unload if there is money as my idea is only meant for trading for this counter even if it move 0.005.
As for hng, he is a day-trader and trade with huge vol, likely that he will adopt the same approach judging his previous track record.
Market move more than 10pts higher, lead by plantation counter.
Drsaleh
keladi is my current top holding in the portfolio, invested more than 100% capital + margin line. My average cost on these counter is about 15.7sen. If keladi announce 1.5sen dividend, my yield is about 9.6%, outpace most of the REITS stocks and become on of the top yield cum dividend counter. Therefore, invest now should lay sufficient buffer for limited downside and have prompted me to concentrate all capital + margin on these counter.
What horse cited investment report on keladi is its potential upside and its immediate resistance level at 19sen. Bear in mind, Before keladi share split for 10 for 1, it used to trade above RM2 and PE above 10x, but of course, this is just general guideline.
Frankly, At current level of 16sen, every half sen movement already generate positive return, but these counter really need volume to spark significant movement.
At present, it is also almost impossible to search property counter met all 2 important criteria: On net cash + dividend yield >9%.
As mention by horse, i'm full time investor/trader, i will trade if stock already reach sufficient profit margin and will realize profit fast. My investment goal is to earn money from stock market consistently but conserve capital is also my utmost priority
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