KUALA LUMPUR: Bursa Malaysia's Property Index surged to a six-year high amid positive market sentiment surrounding the sector on April 12.
The index reportedly surged to an intra-day high of 1,036.15 points, its highest since touching 1,093.73 points on Sept 3, 2018,after climbing 20.08 points or 1.98 per cent.
Fast forward some two months later, the index continues to trend upward to close at 1,119.28 points or 29.5 per cent higher year-to-date when it kicked off 2024 at 864.30 points.
Supported by the various initiatives outlined by the government under 2024 Budget, Housing and Local Government Minister Nga Kor Ming recently expressed confidence about the property market outlook.
He expected the local property market to be stable at least over the next three years.
Nga projected that the on-going "positive trajectory" was expected to continue into the second half of 2024 while pointing to some individual property counters which had rallied by up to 600 per cent since the beginning of 2023.
He pointed out that property transactions reached RM56.53 billion in the first quarter (1Q) of 2024 with more than 104,000 transactions compared to market transactions valued at RM42.31 bil with more than 89,000 transactions recorded in 1Q 2023.
Specifically, he pointed to DPS Resources Bhd which had experienced 600 per cent growth in share price from January 2023 to June 2024, UEM Sunrise Bhd which saw a 347.06 per cent increase and WMG Holdings Bhd which showed 326.31per cent growth.
'Hidden gem'
At a glance, major developers including SP Setia Bhd, Eco World Development Group Bhd, IOI Properties Group Bhd, Sime Darby Property Bhd and Mah Sing Group Bhd have all edged up more than 30 per cent year-to-date.
Likewise, mid-cap property developers such as EUPE Corp Bhd, Avaland Bhd and Tambun Indah Land Bhd have also seen their share on the uptrend as the FBM KLCI breached and able to stay above its new-found psychological level of 1,600 points.
This points to the question if small-cap property laggard namely Jiankun International Bhd is ready to join the ride.
With a market value of RM71.6 million, a share price of 14.5 sen as of June 7, Jiankun might be deemed an undervalued small-scale developer in the market.
As it is, Jiankun net tangible asset (NTA) per share is 28 sen is 50 per cent higher than its share price compared to other property stocks.
For instance, UEM Sunrise has a share price of RM1.14 with an NTA of RM1.35 while Mah Sing has a share price of RM1.85 while its NTA is RM1.49.
Jiankun reportedly projected a meteoric rise with its gross development value (GDV) soaring to RM2 billion following the construction of a 52-storey high-rise apartment and three buildings comprising retail and residential units with an estimated GDV of RM1.2 billion (redevelopment of Jalan Tun Razak flats).
According to a media statement, the plot is expected to enhance Jiankun's GDV within the next five to eight years due to its prime location in Kuala Lumpur's Central Business District or a five-minute walk from the nearest metro station and in close proximity to the Petronas Twin Towers.
Jiankun has four other projects in the pipeline namely the Residensi Maya serviced apartments in Kajang (RM267 million), Taman Panchor Jaya two-storey terrace houses in Nibong Tebal, Penang (RM73 million, Bukit Tambun serviced apartments in Simpang Ampat, Penang (RM200 million-RM220 million) and a project in Klebang in Melaka (RM190 million-RM200 million).
As the property stock boom has just begun, one wonders if Jiankun will play catch-up in due course.