KSL Holdings Berhad

[Behappyalways]

Not vested

http://www.theedgemalaysia.com/index.php...&Itemid=79

[i4value]

KSL is a cyclical company and a such you should not look at the current or past one or two years of performance. Rather you should look at the performance over the property cycle. While we can debate about where we are in the cycle, I think the past 12 years is a better representative of the cycle than just the past 2 years.

Along this line, KSL ROE from 2011 to 2022 averaged 9%. In comparison, the mean ROE of the Bursa large property companies (those with SHF > RM 1b) averaged 7% over the same period. KSL gross profitability averaged 13 % compared to the 8 % for the large companies.

Note that the gross profitability for KSL and the sector had been declining since 2013. But it seemed to bottomed in 2020/2021. 




This is good. According to Professor Novy-Marx, gross profitability has the same power and PBV in predicting cross section returns of stocks. So the bottoming is a good sign of better performance ahead.

For more insights into the large companies performance, go to https://www.i4value.asia/2021/06/will-ma....html#more

[i4value]

Is KSL one of the better Bursa property companies?

While the Malaysian property companies have recovered from the effects of Covid-19, it is still a long way to recovering to the 2013/14 peak.

The chart below shows the ROE of the Bursa property companies with total equity greater than RM 1 billion. You can see the recovery post-2020.



The chart also shows that KSL was an outstanding performance pre-Covid and suffered badly in 2020. However, it seems to have recovered to have its ROE greater than the upper quartile of the large property companies.

But if you look at KSL share price, it did not dip significantly in 2020 like its ROE. So unless you think that its ROE in the next 2 years will reach the 2024 level, I would not expect the share price to uptrend so much.