ha ha ha...a soft wind blow:
09-04-2007: MK Land reorganisation will lead to faster turnaround
By Ashwin Raman
CIMB Research, which has placed a trading buy call on MK Land Holdings Bhd at a target price of RM1.13, believes the management reorganisation at the company could lead to a faster turnaround.
On April 6, MK Land announced its executive chairman Tan Sri Mustapha Kamal Abu Bakar had relinquished his executive powers with executive director Datuk P Kasi being redesignated as managing director.
“We take a positive view of the new management structure, which leaves MK Land with one captain," CIMB Research said in a research note on April 9.
It said the latest development should put to rest constant speculation on management style clashes between the two co-founders.
In an interview with The Edge, Mustapha Kamal brushed aside the speculation of growing rift between the two. "If we had real quarrels, we wouldn't have been working together for 25 years," he said.
CIMB Research said: “As for timing of a turnaround, although we project weak profits for the next three years, we have been hoping for a quicker turnaround.
“Although Kasi is looking at a three-year time frame, we do not discount the possibility of a faster turnaround with him solely at the helm,” it said.
CIMB Research said the faster turnaround could be led by changes in the product mix in MK Land’s flagship Damansara Perdana project or through the sale of land and joint ventures to alter perception of the development.
It said the value of the company’s undeveloped 200ha of land in the township was steadily rising as it was the last undeveloped township in the popular residential belt along the Damansara-Puchong Highway.
The research house said Kasi’s refocus on tighter cost control was positive as most of MK Land’s difficulties had stemmed from its subcontractors and the failure to resolve problems arising from delays and cost overruns.
“Another area that we believe needs greater attention is marketing, which aggressive and successful developers put much emphasis on,” it said.
CIMB Research said the stock was trading at a 54% discount to its fully diluted revised net asset value per share of RM1.61.
"In view of its weak sales and earnings, we continue to tag a 30% RNAV (revised net asset value) discount to derive our target price of RM1.13," it said.
