KSL City Mall is integrated with the KSL Hotel and Resort in Iskandar Puteri, near the Johor-Singapore border. (Ginson Lim/Wikipedia pic) PETALING JAYA: KSL Holdings Bhd is a mid-sized property developer that is under the radar of investors but is primed to become a key beneficiary of the Johor-Singapore Special Economic Zone (JS-SEZ).
In a recent research note, RHB Research described Johor-based KSL as an “under-invested Johor property play”.
“KSL is an almost-pure Johor property play that is set to benefit from Singapore dollar (SGD)-driven retail spending, and the pick-up in economic activities driven by the JS-SEZ.
“Although the market has turned bullish on the Iskandar Malaysia property market since second half of 2023 (2H 2023), the stock is under-invested – which should change when management meets more investors ahead,” it said.
Not many know that KSL has a large landbank in Johor that is comparable with some of the country’s major property developers.
RHB said KSL has 4,946 acres of land, of which 4,586 acres (or 93%) are located in Johor, with 53% of the total landbank (2,635 acres) in prime Iskandar Malaysia areas. The remaining land is in Klang and Setia Alam, in Selangor.
For comparison, UEM Sunrise Bhd, a major landowner in Iskandar Malaysia, holds about 4,780 acres of land bank in the region.
The research house said KSL’s property sales has picked up significantly post Covid-19.
“KSL’s property sales rose substantially from under RM1 billion before the pandemic to RM1.4 billion in FY2024, and management has set a RM1.2 billion target for FY2025,” it added.
KSL also owns a few investment properties including KSL City Mall in Johor Bahru (net lettable area/NLA: 450,000 sq ft) and KSL Esplanade Mall in Klang (NLA: 650,000 sq ft), as well as three hotels.
KSL City Mall is integrated with the 906-room KSL Hotel and Resort in Iskandar Puteri, 7km away from the Johor-Singapore border.
The investment property segment contributes almost 20% of its total revenue, and RHB expects earnings contributions from the retail malls to strengthen from FY2026 onwards.
Above average profit margin
RHB noted the developer’s earnings before interest and taxes (EBIT) margin of 35-40% (ex-pandemic years) for the property development division is “significantly higher than the industry average”.
This is largely attributed to its low land costs, maximisation of land efficiency, product pricing and in-house construction arm, it said.
“Management has also opportunistically acquired a few parcels of land during the pandemic, and from a few distressed landowners over the last few years,” it added.
RHB has given the stock a fair value of RM4.50, an upside of 35% on yesterday’s closing price of RM3.33. At that price, the group is valued at RM3.64 billion.
“KSL’s low land costs, above-industry profit margins and return on equity, and valuation upside for KSL City Mall should justify our valuation for the stock,” it said.
The company was founded by the low-profile Ku brothers – executive chairman Ku Hwa Seng, group managing director Khoo @ Ku Cheng Hai and executive director Ku Tien Sek – over 30 years ago.
They hold at least 34.1% of the company via their investment vehicles, Premiere Sector Sdn Bhd (31.8%) and Gorgeous Horizon Sdn Bhd (2.3%) as of March 24, 2025.
