March 15, 2012

WCT: Buys land in OUG for RM450m

Stock Name: WCT
Company Name: WCT BHD
Research House: ECMLIBRAPrice Call: BUYTarget Price: 3.07




WCT Bhd (WCT MK, Buy, TP: RM3.07) will pay RM450m cash to acquire the entire equity interest in Timor Barat Properties Sdn Bhd, which has 3 parcels of land totaling 23ha in the Overseas Union Garden (OUG) area of Kuala Lumpur. The firm said Iris Green Sdn Bhd, a wholly-owned subsidiary, had entered into conditional share sale agreement to acquire Timor Barat from Eng Lian Enterprise Sdn Bhd, Shen & Sons Sdn Bhd and AMC Sdn Bhd. The land situated in Taman Yarl, off Old Klang Road, will be used for a mixed development project. (Financial Daily)

Comments: The average purchase price for the 3 land parcels at Taman Yarl, OUG is RM180 psf. Including these land parcels, WCT's current outstanding landbank is 1,038 acres. Details of the mixed development project that the new land is earmarked for will be disclosed by management in due course. Additionally, Timor Barat has applied to Dewan Bandaraya Kuala Lumpur to alienate and obtain a piece of land contiguous to one of the 3 land parcels in the area. If approved, WCT will acquire the land for an additional consideration of RM150 or RM130 psf, depending or whether the land status is freehold or leasehold. We view the land acquisition positively as this is expected contribute to WCT's property bottomline in the future. Maintain BUY, TP: RM3.07 based on sum-of-parts valuation. (Benjamin Lee)


No comments:

Post a Comment