KUALA LUMPUR: KEB Bhd’s upcoming ACE Market listing could support its longer-term growth as the property developer expands its landbank and launches new projects, although analysts differ on its earnings outlook and valuation.
RHB Research and TA Securities said the developer’s established track record, project pipeline and in-house construction capabilities would support its business following the initial public offering (IPO).
However, RHB Research assigned KEB a fair value of 39 sen, representing an 11 per cent upside from its IPO price of 35 sen, while TA Securities valued the stock at 35 sen, implying no upside.
KEB, which focuses on affordable to medium-priced residential developments, is scheduled to list on Bursa Malaysia’s ACE Market on Nov 16.
The company aims to raise RM48.5 million from its IPO, with RM19 million earmarked for landbank acquisitions, RM14.9 million for project development and RM8.5 million for repayment of bank borrowings.
The remaining RM6.1 million will cover listing expenses.
RHB Research said an expanded landbank would enable KEB to increase property sales and sustain earnings growth, particularly in the southern Klang Valley, Negri Sembilan and Melaka.
It expects the company’s net profit to rise 9.5 per cent to RM56.5 million in the financial year ending Dec 31, 2026 (FY26), followed by growth of 7.8 per cent to RM60.9 million in FY27 and 6.4 per cent to RM64.8 million in FY28.
TA Securities, however, expects KEB’s net profit to decline 9.1 per cent to RM46.9 million in FY26 as revenue recognition from its Residensi Cove project moderates following a strong contribution last year.
It forecasts net profit to recover to RM49.9 million in FY27 and RM53.5 million in FY28, supported by new project launches and construction progress.
TA Securities said KEB’s four ongoing projects have a combined gross development value (GDV) of RM1.36 billion, while two identified future projects worth RM382.7 million bring its total development pipeline to RM1.74 billion.
The developer has completed 14 projects with a combined GDV of RM1.35 billion since entering the property development business in 2004.
Its ongoing developments include Residensi Cove in Melaka and Residensi Palma Elit in Kajang, while Residensi Embun Palma in Cheras and Residensi Jentayu in Ulu Langat are targeted for launch in the fourth quarter of 2026 and first quarter of 2027, respectively.
TA Securities noted that Residensi Cove was 96.1 per cent sold and 96.5 per cent completed as at Sept 25, while Residensi Palma Elit was 90.5 per cent sold and 88 per cent completed.
RHB Research said KEB’s remaining landbank of 24.29 hectares, including 6.51 hectares pending acquisition, would provide further opportunities for development.
The company aims to launch between RM300 million and RM400 million worth of new projects annually, targeting earnings growth of five to 10 per cent a year.
Both research houses highlighted KEB’s in-house construction arm, KEB Utama, as a competitive advantage.
RHB Research said the arrangement had helped the developer achieve above-industry profit margins, with gross margins ranging from 27 to 35 per cent and net margins of 13 to 18 per cent between FY22 and FY25.
TA Securities said the construction arm’s capabilities also gave KEB greater control over project costs, quality and delivery schedules.
KEB intends to distribute between 30 and 50 per cent of its profit as dividends after listing.
RHB Research forecasts a dividend yield of about 6.3 per cent for FY27, compared with TA Securities’ estimate of 5.7 per cent, based on the IPO price.
At its IPO price of 35 sen, KEB is expected to have a market capitalisation of about RM308.8 million upon listing.