MK Land - What’s NEXT! … dated July2012

The group's degearing exercise and businessstreamlining (liquidated ascertained damages issues and disposal of non-coreassets) are within expectations.

The group is toyingwith the idea of paying dividends again in line with the group's improvedprofitability and strengthened balance sheet.

There are RM400mil of unbilled sales. MK Land willcontinue to focus on pushing the remaining units in Rafflesia (semi-Ds) andMetropolitan Sq (condominiums) with a combined RM760mil in gross developmentvalue (GDV).

The group is exploring more new products such asbungalows and condominiums, possibly in the next one to two years.

Separately, MK Land reassured that the liquidatedascertained damages issues are now behind them, and the priority now is tocomplete the delayed project.

Estimate MK Landstill has about RM90mil outstanding from the previous land sale, which willdefinitely help the group to reorganise its debt structure to be moreefficient.

MK Land's totaldebt has improved by 10.6% sequentially from RM220.2mil to RM197mil, which isin line with the group's plan to reduce debt. Net gearing is 0.11 times now,and do not discount the possibility of further land sale which will put thegroup comfortably in net cash position.

A 25-acre Daman-sara Perdana and the 55-acreSetiawangsa land sale could add about RM320mil to the war chest, or equivalentto the group's market capitalisation now.

MK Land is thelargest landowner (about 170 acres net land) near the Taman Tun Dr Ismail-Damansara-Puchong Highwayinterchange should benefit from rising land prices and positive catalysts suchas potential dividend or land sale could give the much needed sparks to thestock.