Kuala Lumpur, 09th June 2024: The Malaysian stock market has seen a surge in property stocks since the beginning of this year, with major developers’ shares rising consecutively and attracting more investors.
It was reported by Star website on Friday 07th June 2024 that Housing and Local Government Minister Nga Kor Ming said that “The property market has a “bright future” in the coming years under the leadership of Prime Minister Datuk Seri Anwar Ibrahim.”
Malaysian properties – Bright Future
Interestingly, the minister also made a forecast that the ongoing property stock rally is expected to continue into the second half of 2024. He said this in a statement where he noted that property stocks on Bursa Malaysia have rallied by up to 600% since the beginning of 2023.
Nga also pointed out that property transactions reached RM56.53bil in the first quarter of 2024 (1Q24), demonstrating an “impressive growth”.
Premised on investors’ bullishness on property stocks and the market appetite for properties, Nga said the local property market is expected to be stable this year.
The market is also likely to continue growing in the next three years, supported by various initiatives outlined by the Madani government under Budget 2024, he added.
Nga also noted that property counters in the stock market have been on the rise from January 2023 to June 2024.
Listed Property Companies
Out of 100 property counters on Bursa Malaysia, approximately 76 counters experienced an increase in share price, 22 counters showed a decrease in share price and two counters maintained their share price despite fluctuations.
For instance, DPS Resources Bhd experienced 600% growth in its share price, UEM Sunrise Bhd saw a 347% increase and WMG Holdings Bhd also showed a 326% growth from January 2023 to June 2024.
A total of 23 counters have at least doubled their share price in the period, based on data provided in Nga’s statement.
“In 1Q23, Malaysia’s property market transactions were valued at RM42.31bil, with more than 89,000 transactions recorded. In contrast, in 1Q24, property market transactions reached RM56.53bil, with more than 104,000 transactions, marking an increase of RM14.22bil in terms of value,” he said.
Perfomance of other Property counters
Major development groups, including SP Setia (SPSETIA), UEM Sunrise (UEMS), IOI Properties (IOIPG), Sime Darby Property (SIMEPROP), and Mah Sing Group (MAHSING), have all increased by more than 30% year-to-date.
Mid-cap property developers
Mid-cap property developers such as EUPE, Avaland (AVALAND), and Tambun Indah Land (TAMBUN) have also seen their shares rise consecutively.
Small-cap property developer Jiankun International (JIANKUN, 8923, Main Board Property Group) is ready to join the upward trend in property stocks.
With a market value of RM71.6 million and a share price of RM0.145, Jiankun might be an undervalued small-scale developer in the market.
Jiankun net tangible asset (NTA) per share is RM0.28, with the share price only accounting for 50% of the NTA, much lower compared to other property stocks. For instance, UEM Sunrise (UEMS) has a share price of RM1.14 with an NTA of RM1.35, and Mah Sing Group has a share price of RM1.85 with an NTA of RM1.49.
Jiankun anticipates a meteoric rise in GDV, soaring to RM2 billion, including the constructing a 52-story high-rise apartment and three buildings comprising retail and residential units, with an estimated total development value of around RM1.2 billion.
“This plot is expected to bring substantial returns to the company within the next 5 to 8 years due to its prime location in Kuala Lumpur’s Central Business District (CBD), just a 5-minute walk from the nearest metro station and close to the Petronas Twin Towers.”
The property stock boom has just begun, and Jiankun lags behind its peers. With its substantial potential development projects, the company can create greater value.
Land & General Bhd (L&G) is another counter laggard behind its peers.
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