PETALING JAYA: Kenanga Research is upbeat about Kuala Lumpur Kepong Bhd
’s (KLK) largest real estate project, KLK TechPark, adjacent to Proton’s main plant in the Automotive High Tech Valley in Tanjung Malim, Perak.
BYD Company Ltd (BYD) will be setting up an electric vehicle assembly plant on a 150-acre site in KLK TechPark even as the second phase of the development is scheduled for launch by the end of this year.
Kenanga Research said in a report that KLK TechPark development will lift the group’s future return on equity or ROE, thus speeding up de-gearing and raising potential for merger and acquisition-driven growth.
Prior to KLK TechPark, KLK had announced a 40:60 industrial development join venture with AME Elite Consortium Bhd to develop 178 acres in Ijok, Selangor.
It also bought out a property joint-venture from 40%-partner, UEM Sunrise Bhd, which owns 2,500 acres along Johor’s Senai-Skudai corridor with potential for industrial property, though no development has been disclosed or launched.
“To date, KLK TechPark is the group’s largest property project by size as its 1,500 acres dwarfs even the maturing 1,001-acre Bandar Seri Coalfields development,” the research house noted.
Kenanga Research said it expects the land sale by KLK to BYD to conclude next year.
Based on conservative estimated price of RM15 per sq ft, the 150-acre site could fetch up to RM98mil. Against a book value of an estimated RM12mil, this may result in a gain of up to RM87mil.
The site is currently designated agricultural land in KLK’s Changka Asa estate.
The research house has an “outperform” call on the stock while maintaining a target price of RM23 per share.
