Kimlun’s acquisition spree continues with RM68.41 million Bukit Raja deal

KUCHING: Kimlun Corporation Bhd’s (Kimlun) land and property acquisition spree has continued with its most recent proposed acquisition – 47 vacant detached lots and 30 double-storey detached houses in Mukim Bukit Raja, Shah Alam for a total cash consideration of RM68.41 million.

According to Kimlun in a Bursa filing on Tuesday (Jan 31), the rationale for the proposed acquisition is to provide the group an opportunity to increase the size of its land bank in strategic locations that will in turn provide enhancement to the group’s future revenue and earnings.

With guidance that Kimlun will carry out some enhancements on the 30 detached houses and build bungalow units on the 47 vacant lots, Kenanga Investment Bank Bhd (Kennaga Research) estimated that the acquisition will likely generate a potential gross development value (GDV) of RM170 million.

However, earnings contributions from this are expected to come in at the earliest in FY19 – leaving Kenanga Research to deem this acquisition as a ‘neutral’ move due to its lack of near-term catalysts.

On the other hand, AmInvestment Bank Bhd (AmInvestment Bank) reckoned that the move is both defensive and opportunistic in nature.

“It is defensive in the sense that Kimlun has to do something to prevent its 41 yet-to-be launched bungalows from going down the same path as the initial phase, and Kimlun has decided to step into the driver’s seat for the entire project,” explained the bank while adding that the move is opportunistic the consideration price showcases an attractive premium.