When the going gets tough, MK Land turns to Kasi

About five years ago, the staff of MK Land Holdings Bhd bought a Rolex watch for their boss, Datuk P. Kasi, as a birthday present.

"He kept it in the drawer," said one employee with a chuckle. Instead, he kept to his favourite, a black digital Casio watch that is almost impossible not to notice.


KASI: We're cutting down on volume

The co-founder of MK Land, a property developer, is a simple man, his staff say.

But he now faces a not so simple situation. MK Land is in a hot sector, owning one of the last big pieces of prime land in the Klang Valley.

And yet, its accounts paint a different picture. It is making money but profits have fallen every year since 2003, its annual report showed.

The company disappointed investors further recently when it swung to a loss in its first quarter for fiscal 2008. Revenue tumbled 59 per cent.

CIMB, an investment bank, cut its recommendation on the stock to "neutral" after the results announcement.

Malaysian Rating Corp Bhd piled on the pressure when it pointed out that the quality of its credit will depend on its ability to secure new funding.

"Every year we've always met the bond obligation. It was RM300 million, the original bond. We only have RM90 million left," Kasi said.

MK Land used to be driven by volume, he explained. But the market has changed and the firm must also change.

"We are cutting down on volume. It's about smaller number of units and higher price," he said.

The company is an asset-rich company. It has land worth almost RM700 million and properties valued at more than RM300 million, its accounts showed.

Its prized asset is Damansara Perdana, an area next to the bustling Kota Damansara township, Bandar Utama and Taman Tun Dr Ismail, areas with a large population that have heavy spending power.

However, its stock does not reflect the value of its assets. At around 62 sen, it is 28 per cent below its net assets per share of 86 sen, as at September 30 2007.

In a November 2007 report, CIMB calculated that the value of MK Land's assets minus all liabilities is worth more than RM2 a share.

This is probably why its third biggest shareholder, US-based Liberty Square Asset Management, decided to buy more shares. It added five million shares on January 11, bringing its stake to 6.64 per cent. It had 6.02 per cent as at October 16 last year.

By New Straits Times