Highest Returns to Shareholders over three years
HCK Capital Group Bhd - Share price bucks the trend
In contrast to the majority of players in the property sector that have seen declining share prices over the past three years, HCK Capital Group Bhd has bucked the trend.
The rally in its share price gained substantially in 2021, rising to as high as RM2.20 apiece on Nov 11, 2021, from as low as RM1.17 on July 28, 2020.
In the three-year period from 2019 to 2021, HCK Capital’s share price had gained 66%. This translates into an adjusted three-year compound annual growth rate (CAGR) of 19.8% — the highest total return in the property sector at The Edge Malaysia Centurion Club Corporate Awards 2022.
Over the three years in review, HCK Capital’s market capitalisation had almost doubled to reach close to RM1 billion in November 2021.
At a time when the property market has been soft, the group’s strategy of carving out a niche for itself as a developer focused on education has served it well, keeping it in the black compared with many of its peers that are struggling. Its projects include edusentral in Setia Alam, edusphere in Cyberjaya, edumetro in Subang Jaya and e-Damansara in Damansara West, where the main component of these developments is education. HCK Capital also runs international schools and private national schools.
However, its bottom line was hit in recent years due to the stricter lending requirements of financial institutions and slower sales due to the Covid-19 pandemic. For the financial year 2021 (FY2021), HCK Capital posted a net profit of RM3 million, lower than the RM3.5 million in FY2020 and RM6.9 million in FY2019.
For the first half of FY2022, the group’s net profit dropped more than 77% to RM685,000 from RM3.06 million a year earlier. Revenue for the period came in 2.5% higher at RM61.83 million, from RM60.34 million previously. Its weak performance was partly due to higher interest expense in the current financial year.
HCK Capital says it had secured total sales of RM104.47 million and total bookings of RM93.26 million as at June 30. It expects stronger sales in the second half of this year and will continue to launch new phases of its developments.
“The recent announcement of 100% stamp duty exemption for first-time buyers of properties priced at RM500,000 and below, through the i-MILIKI, will assist in expediting the recovery of the property market. With the strong bookings in the pipeline, the key focus will be on the swift conversion of these bookings with end financing,” it said in a filing with Bursa Malaysia.
“Despite numerous challenges faced by the property industry due to the increase in building material costs, labour shortages and inflationary pressures, potential buyers are still seeking properties, especially in the low to medium price range.”
HCK Capital has come a long way since it was known as Golsta Synergy Bhd. The group was listed on Bursa in August 2000. Its main businesses are in industrial engineering and the trading of rubber-related products.
A former journalist who went on to be executive deputy chairman at Star Publications (M) Bhd (now known as Star Media Group Bhd) from 2008 to 2010, Tan Sri Clement Hii Chii Kok emerged as a major shareholder of Golsta in 2014 after buying a 36.69% stake in the company. He subsequently launched a mandatory general offer. After the takeover exercise, which saw Hii increase his shareholding to 52.21%, Golsta was renamed HCK Capital.
Under Hii, who has held the position of chairman since 2014, HCK Capital has diversified into property development, hospitality and the media, while the industrial engineering and rubber-related businesses were sold.
The group owns the Imperial International School in Ipoh and is involved in the operations of Peninsula International School in Setia Alam as project adviser. It plans to have another Imperial International School at its Subang Jaya campus in the edumetro project.
In Selangor, the group’s land bank includes 35 acres of freehold land in Semenyih, 14.4 acres of leasehold land in Selangor Cyber Valley and 10 acres of leasehold land in Sungai Buloh.