Stock Name: KULIM
Company Name: KULIM (M) BHD
OSK Research Sdn Bhd expects the acquisition of Johor Corp Bhd's 13,687 hectares of plantation in Johor by Kulim (M) Bhd to catapult the company into the league of big planters.
The research firm said the estate acquisition would increase Kulim's planted hectarage by 10.7 per cent to 124,256 hectares.
"We view the acquisition price of RM51,000 per hectare as very attractive, compared with IOI Corp's acquisition of a plantation estate in Sugut, Sabah, for RM69,000 per hectare," OSK said in a note today.
It said that the acquisition would also increase Kulim's net debts to RM2.2 billion from RM1.5 billion as of the end of March 2011.
"The consensus estimate has been revised upward by RM100 million since a quarter ago to RM462 million. But, we believe there is still more room for an upward revision," OSK said, adding, it maintained a "buy" call on Kulim, with a fair value of RM4.77.
Meanwhile, the research firm is neutral on Kulim's purchase of the remaining 24.5 per cent stake in Sindora Bhd, as it views the company's listing status as redundant.
"Hence, it does make sense to de-list the company, especially if it intends to list the shipping business," it added. -- Bernama
Company Name: KULIM (M) BHD
| Research House: OSK | Price Call: BUY | Target Price: 4.77 |
OSK Research Sdn Bhd expects the acquisition of Johor Corp Bhd's 13,687 hectares of plantation in Johor by Kulim (M) Bhd to catapult the company into the league of big planters.
The research firm said the estate acquisition would increase Kulim's planted hectarage by 10.7 per cent to 124,256 hectares.
"We view the acquisition price of RM51,000 per hectare as very attractive, compared with IOI Corp's acquisition of a plantation estate in Sugut, Sabah, for RM69,000 per hectare," OSK said in a note today.
It said that the acquisition would also increase Kulim's net debts to RM2.2 billion from RM1.5 billion as of the end of March 2011.
"The consensus estimate has been revised upward by RM100 million since a quarter ago to RM462 million. But, we believe there is still more room for an upward revision," OSK said, adding, it maintained a "buy" call on Kulim, with a fair value of RM4.77.
Meanwhile, the research firm is neutral on Kulim's purchase of the remaining 24.5 per cent stake in Sindora Bhd, as it views the company's listing status as redundant.
"Hence, it does make sense to de-list the company, especially if it intends to list the shipping business," it added. -- Bernama
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