KUALA LUMPUR: ACE Market-bound property developer KEB Bhd enters its initial public offering (IPO) backed by a constructive medium-term earnings outlook, supported by RM1.74 billion in total gross development value (GDV) pipelines and an active landbank replenishment strategy across southern Klang Valley and Melaka.
"An enlarged landbank will allow KEB to grow its property sales and earnings over the long run, particularly in the southern Klang Valley region, Negeri Sembilan and Melaka," RHB Research stated in a note on Friday, assigning a fair value of 39 sen based on a 50% discount to revalued net asset value (RNAV).
Concurrently, TA Securities pegged its fair value at the IPO price of 35 sen, noting that the group's planned launches between 2026 and 2028 will underpin medium-term expansion.
However, the research house highlighted external headwinds, observing that "property developers face project delays, higher labour and construction costs, and weaker buyer sentiment if inflation persists or lending conditions tighten."
Aiming to raise RM48.5 million in gross proceeds from its public issue of 138.54 million new shares at 35 sen each, KEB has earmarked RM19 million for land acquisition, RM14.9 million for project development working capital, RM8.5 million for bank repayment, and RM6.1 million for listing expenses. The listing implies a market capitalisation of RM308.8 million upon its debut on November 16.
Financially, KEB's performance has expanded at a robust multi-year pace. Over the FY22 to FY25 period, revenue achieved a compound annual growth rate (CAGR) of 18.7% from RM214.8 million to RM359.3 million, while profit after tax (PAT) rose at a CAGR of 21.4% from RM28.9 million to RM51.6 million.
In FY25, revenue surged 91.7% year-on-year to RM359.3 million, and PAT jumped 54.4% to RM51.6 million, underpinned by substantial progress billings from Residensi Cove in Kota Syahbandar, Melaka, and the launch of Residensi Palma Elit in Kajang.
A central driver of KEB’s operational resilience is its wholly owned CIDB Grade 7 contractor, KEB Utama. "The availability of in-house construction resources allows KEB to exercise greater control over project quality, timeliness and cost management, thereby enhancing operational efficiency and ensuring consistent delivery standards across all developments," RHB noted, pointing out that gross and PAT margins held between 27% to 35% and 13% to 18% throughout FY22–FY25.
For the first four months of FY26 (4M26), KEB posted a revenue of RM88 million and a PAT of RM14.05 million. Analysts anticipate earnings delivery to remain steady as ongoing developments progress and new residential projects are rolled out.
As RHB highlighted, "Over the near term, earnings will be underpinned by four ongoing projects: Residensi Palma Elit in Kajang (GDV: RM105.9 million), Residensi Cove in Kota Syahbandar Melaka (GDV: RM665.2 million), as well as Residensi Embun Palma in Cheras (GDV: RM160.5 million) and Residensi Jentayu in Ulu Langat (GDV: RM429.4 million), which will be launched in 4Q26 and 1Q27."