Keladi Maju Bhd
Following our article on Goh Ban Huat (GBH) in this column on October 17, 2014, we now take a look at the other party of the land deal — Keladi Maju, both controlled by Tan Sri Robert Tan.

To recap, the proposed reverse takeover exercise of GBH was aborted, but GBH’s proposed sale of the 13.93 acre Segambut land to Keladi was finalised on 9 October 2014 for a cash consideration of RM192.4 million. Segambut is located next to the popular Mont’Kiara enclave in Kuala Lumpur.

Keladi is involved in mainly low and medium end property development in Kedah. The company’s underlying business seems to be returning steady revenue and net profit between RM48 – 59 million and RM13 – 23 million, respectively apart from a big jump in FY Jan 2013 due to revaluation gains.

At 32.5 sen, the stock is trading at a price to book of 0.9 times with a trailing 12-month P/E ratio of 13.1 times. However, Keladi’s investment risk profile will now change.

The company’s cash will deplete and it will venture outside its familiar Kedah home base. Until the land is developed, returns will be low as the land will be leased back to GBH for RM350,000 per month, or RM4.2 million per year. This translates to a yield of 2.2%.

Keladi’s cash has been increasing over the years, growing to RM134.7 million as at 31 July 2014. However, all that — plus another RM60 million — will be paid for the land.

The Segambut land was priced at roughly RM317 psf, higher than the adjoining 15-acre lot that were sold this year for RM280 psf by related company FCW Holdings to a FCW-IJM Land joint venture. The FCW-IJM joint venture project is expected to be launched in 2016.

This article first appeared in The Edge Financial Daily, on October 29, 2014.