Posted by traderhub > 2011-10-30 10:25 | Report Abuse

Keladi - Potential Privatization Candidate?

Currently KELADI is holding about MYR70 mil cash without any debt. This is why it is able to produce good dividend yield to the shareholders. It's main development area is at Kedah & planning to shift the investment to Klang Valley & the purchase of land still in discussion stage.

With it's strong cash flow, it is able to generate better bottom line result with the new investment.

A key factor to consider is the land belong to the KELADI is still very much undervalued compared to the market value due to accounting standard requirement.

For example, there is a piece of land which is approximately 525 arces (freehold) with book value MYR19 millions. Its last revaluation date was in 1996. It is worth much higher now in 2011, but is not reflected in its financial report. If the appreciation in the value of the lands it owns is taken into account, KELADI will worth much more that its current value.

Why do the directors of the company keeping the company value low and not mark it up to realize its full value? A possibility is its major shareholders may like to privatize this company some day in the future. Keep a watch on this.

Please comment/feedback if you have other news on this stock.