The bullish run of KSeng on the 14th & 15 Dec 2011 has dismayed many supporters of the stock. After hitting a high of 4.21, the buyers backed off and retreated. What happened? Obviously this question is best answered by the insiders. In my opinion, this retreat is likely to be short-lived.
The company is cash rich and asset rich as well. As at 30.9.2011, it has cash and short-term investment of RM722,422, 000; its total investments in quoted securities at cost = RM188, 271,000, but are now worth RM432,522,000 in market value.
Its land and landed properties in Johor, KL and Singapore are worth very much more than their book value as most of these properties were last valued in 1980.
The present ongoing development in the Iskandar region will greatly enhance the value of KSeng in the forseeable future.
Some key statistics of KSeng as at Sep 30, 2011 are as follows:
Share Capital: RM361,477,000
Par value: RM1
Current Assets: RM1,022,280,000 (Cash & Short-term investment RM720,422)
Total Assets: RM2,043,811,000
Total Liabilities: RM 139,766,000
Short-term borrowings and overdraft: RM39,645,000
NTA: RM4.90 per share
As can be seen from the above figures, KSeng has a very strong balance sheet. This, however, is no guarantee that it share price will move up. So, the best action is to wait until the chart shows some positive signals before you buy again.
If KSeng does not know what to do with its cash, it should return at least some of them to its shareholders.