Regarding Keck Seng

My dearest Slowday,

I blurted out the following comments to you on Keck Seng, which I now realize that that it is perhaps not as accurate, perhaps very distorted. I am extremely sorry.

• kseng? very fast - underperforming in terms of financial performance but.. the sexy story is their cash on hand mah.. which got good and bad.. good is, it's there. bad? this bugger hoards the cash without really rewarding all its shareholders in a justifiable manner all these years..

The following table shows Keck Seng track record.

Ok, that fy 2005 earnings, saw Keck Seng earning some 97,641 million is distorted because Keck Seng profited some 39.5 million when it earned compensation for its plantation land due to some highway expansion. So even if one minus out this one-time extra-ordinary gain, Keck Seng has still performed pretty well since its fiscal year 2001.

So for me to say that Keck Seng earnings performance has been disappointing is rather inaccurate on my part. I am extremely sorry. A thousand apologies.

And its dividend payout is not that bad.

So I am sorry for those comments made. It's fairly inaccurate and I believe I needed to make it right.

Here's a recent news article written on Keck Seng on the Star Biz. here

• Friday April 6, 2007
  
  

  Revaluation of Keck Seng assets

  By Yeow Pooi Ling

  PETALING JAYA: The market has yet to fully appreciate the potential revaluation surplus of Keck Seng (M) Bhd's rich assets, especially its huge land bank in south Johor.
  

  Main board-listed Keck Seng is involved in four core businesses – property development, hotel management, plantations and palm oil milling.
  

  According to the company's 2005 annual report, about 10,000 acres in south Johor are still valued based on prices at the 1980s level.
  

  The surplus from the revaluation of land, especially in Ulu Tiram, Bandar Baru Kangkar Pulai, Pasir Gudang and Tanjong Langsat, could be significant since land and property prices in south Johor have appreciated due to plans to develop the Iskandar Development Region.
  

  In 2005, Keck Seng sold 181 acres of plantation land in Ulu Tiram to the state government for RM45.4mil, or about RM251,000 per acre, which resulted in a one-off gain of RM39.5mil.
  

  Assuming a price of RM251,000 per acre, the total land bank in south Johor could be worth RM2.5bil, which is a surplus of RM2.3bil from the current book value.
  

  This could enhance Keck Seng's net tangible asset (NTA) by a whopping RM9.50 per share.
  

  The company's plantation land bank could eventually be converted for property development, which would fetch better pricing as it is close to the urban area.
  

  Its commercial properties are also valued at below market prices. The net book value of Menara Keck Seng at Jalan Bukit Bintang, for example, was last valued at RM63.5mil, or RM240 per sq ft, in 1996.

  
  
  
  The MAS building at Jalan Sultan Ismail was sold last year for RM130mil, or about RM481 per sq ft. Based on the same price per sq ft, Menara Keck Seng could be worth RM127mil, double its current book value.
  

  The company also owns properties in Singapore, which were last valued in the 80s; two hotels in Canada (1997 and 2000) and another hotel in Hawaii, last valued at 2000.
  

  Keck Seng's investment in equities is also priced at a book value lower than the current market price.
  

  According to notes accompanying its fourth quarter results ended Dec 31, 2006, the book value of these investments amounted to RM146.7mil, but based on market value as at end-December, they were worth RM567.2mil.
  

  Keck Seng owns 4.9 million shares in PPB Group Bhd and 2.8 million shares in Chin Teck Plantations Bhd.
  

  When the Financial Reporting Standards 139 (FRS 139) are fully enforced, all companies including Keck Seng would have to mark-to-market their investment in equities, and state the surplus or deficit over cost as earnings or losses in the profit and loss accounts.
  

  As a result, Keck Seng could see a surplus of RM420.5mil on its investment in equities, which could boost its NTA by RM1.74 per share.
  

  Meanwhile, its healthy balance sheet enabled it to buy Regency Tower in Kuala Lumpur last year for RM62.5mil cash. Its net cash stood at RM189mil as at Dec 31, 2006.
  

  Based on a conservative estimation arrived at by adding surpluses from the revaluation of Keck Seng's Johor land bank and its equity investments, the company's total NTA could reach as high as RM15 a share compared with RM4.34 currently.
  

  However, the present share price is below the year's high of RM5.45, while other property stocks with exposure to south Johor have soared to their 52-week highs. The counter rose 22 sen to RM4.66 yesterday.
  

  
  KSENG : [Stock Watch] [News]