Kialim #6211 Under Value Gems

Kia Lim - Bricklaying for the Development of Johor
Source: RHB Research - 22 Feb 2024
MYR1.05 FV based on 10x FY24F P/E. Kia Lim is at the forefront of capitalising on Johor's booming property market, driven by major infrastructure projects such as the Johor Bahru-Singapore Rapid Transit System (RTS) and key economic zones. It is benefiting from Johor's strong demand for  bricks, while also transitioning to higher-margin operations amidst industry consolidation, record selling prices, and taking advantage of a strong SGD. Its commitment to sustainability via energy-efficient bricks makes it a compelling investment, on top of its attractive 5.7x FY24F P/E.

Johor’s largest  brick manufacturer. Kia Lim has solidified its position as one of the largest clay brick manufacturers in the southern region of West Malaysia. The top three brick manufacturers have a 60% market share in Johor – these include Kia Lim, the biggest player in the state. It has the highest production capacity in the region, at about 180m bricks pa ie equivalent to 400,000 tonnes of clay. This substantial capacity underscores Kia Lim's pivotal role in the building materials sector, as well as its capability in meeting growing demand (especially in Johor) while maintaining product quality