Share
- The earnings uplift stems from the sale of industrial land in Kulai by KLK’s wholly-owned subsidiary Aura Muhibbah Sdn Bhd (AMSB) to a joint venture with Mah Sing Group Bhd (KL:MAHSING), which Kenanga Research estimates will result in a one-off disposal gain of about RM77 million.
KUALA LUMPUR (Dec 22): Kuala Lumpur Kepong Bhd's (KL:KLK) recent push into industrial property could provide a more stable earnings stream and strengthen its longer-term income visibility beyond plantations.
The earnings uplift stems from the sale of industrial land in Kulai by KLK’s wholly-owned subsidiary Aura Muhibbah Sdn Bhd (AMSB) to a joint venture with Mah Sing Group Bhd (KL:MAHSING), which Kenanga Research estimates will result in a one-off disposal gain of about RM77 million.
"We exclude such lumpy gains from our core earnings but include recurring development profits which are likely to become more meaningful from late FY2027 (financial year ending Sept 30, 2027) onwards or beyond," said the research firm in a note on Monday (Dec 22).
Kenanga noted that the transaction also helps unlock value from KLK’s sizable landbank in Kulai, where the group still holds more than 2,100 acres earmarked for phased development under a broader master plan.
The disposal is expected to enhance the value of the remaining land parcels while trimming group gearing, with minimal impact on near-term core earnings.
Meanwhile, Public Investment Bank (PBIV) said the subsequent development of the RM2.26 billion MS Industrial Park in Kulai is expected to generate around RM10 million in annual profits for KLK over the next decade, providing recurring earnings as the industrial project is rolled out in phases.
Read also
KLK TechPark @ Tanjong Malim—Freehold industrial hub driving Malaysia’s automotive, high-tech future
The Kulai project marks KLK’s third industrial property initiative, following its joint venture with AME Elite in Ijok, Selangor, and the development of KLK TechPark in Tanjung Malim, Perak.
“We expect the property earnings contribution to increase significantly by 5% in the future compared to the current level of 2.4%,” added PBIV.
Kenanga Research maintained its “outperform” rating on KLK with an unchanged target price of RM24, while Public Investment Bank retained its “neutral” call with a target price of RM22.72, citing the project’s long development horizon.
The stock was down by 12 sen or 0.6% at RM19.88 at the time of writing on Monday, valuing the company at RM22.2 billion.
Unlock Malaysia’s shifting industrial map. Track where new housing is emerging as talents converge around I4.0 industrial parks across Peninsular Malaysia. Download the Industrial Special Report now.
