Sime Darby's plan to unlock asset value draws attention, shares raised to 'buy'



PETALING JAYA: Sime Darby Bhd's plan to unlock the value of its assets has whet the appetite for the stock.

CIMB Research yesterday upgraded the stock from a 'hold' to a 'buy' with a higher target price on expectation that Sime Darby will seek a separate listing for its plantation division.Meanwhile, Public Investment Research believed that a standalone plantation unit could be worth as much as the entire group at current market price.

Sime Darby, at a briefing last Friday, revealed that it plans to unlock shareholder value via a listing or demerger of its key business segments.It said it planned to engage bankers within the next one or two weeks to study the possibilities, in line with the aspirations of its strategic shareholder Permodalan Nasional Bhd.

CIMB Research said it expected these exercises to boost sentiment on the stock.'We believe that the most likely scenario under current market conditions is to demerge its plantation division.'This will be similar to the exercise carried out by IOI Corp to demerge its property and plantation divisions in 2013,' it said in a note yesterday.

The research house said a demerger was a more likely scenario than an initial public offering (IPO).It said this was because the group may not be able to fetch optimal valuations for its plantation assets under an IPO, as it recently stepped up its replanting programme for its operations in Malaysia and Indonesia.

It estimated that Sime Darby Plantations could be listed with a market capitalisation of between RM30bil and RM42bil, placing it as the largest listed Malaysian plantation company by market capitalisation.It revised its sum-of-parts value for the group to RM9.43 from RM8.20 and upgraded the stock to 'add' from 'hold'.

Public Investment Bank Research said Sime Darby may target a standalone listing for New Britain Palm Oil Ltd (NBPOL), which was acquired by the group in a RM6bil deal in March last year.It said this was likely, given NBPOL's attractive age profile, strong fresh fruit bunch production growth, sizeable planted land bank and higher-than-average yield.

Assuming a conservative valuation of RM85,000 per ha for its 84,000 ha planted land bank in Papua New Guinea and Solomon Islands, the research house said this could value NBPOL at RM7.2bil.'The proceeds raised could be used to further pare down the group's gearing level, which is currently standing at 41%,' it said.

KWSP tingkat pelaburan dana Private Equity (PE) patuh syariah
Mencari Platform Alternatif Terbaik Untuk Melabur
From Debt To Equity Venture
Tips Untuk Membeli EKUITI
KANSER KUDIS KEWANGAN
Tips Elak Kerugian Pelaburan
EKUITI Sistematik Setiap Bulan Bantu Bina Tabungan Kukuh
Menilai Pembelian Ekuiti Dengan Betul
Mengambil Peluang di Dalam Pasaran Ekuiti
Foreigners bought RM192.4 million Malaysian equity last week, says MIDF Research
Asas Pengetahuan Untuk Mengelak Skim Cepat Kaya
Moody's: Asian integrated and upstream O&G companies should see profits rise
Peluang di Pasaran Pendapatan Tetap Ekuiti & Sukuk
Asian Equity Maybank sees Southeast Asia equity deals rising in 2017
It's time to invest in Malaysia (Equity)
Empowering your finances in 2017
Investing: Stay vigilant and be tactical this year
Asian Equity Fund to invest in 7 start-ups companies this year
Asian Equity : What Are Equity Funds Useful For In an Investment Portfolio?
Menguruskan Portfolio EQUITY
Sesi Penerangan EKUITI
Lanskap Teknologi Kewangan (Fintech - Finance Technology) Mengubah Cara Pembiayaan & Pelaburan
Foreign funds offloaded RM481.7m last week, says MIDF Research
Pemilikan saham bumiputera rendah
Pelaburan EKUITI Bantu Bina Kekayaan
Fund managers say good time to buy shares as ringgit weak
Money managers and asset owners allocating more to liquid investments
Sime Darby's plan to unlock asset value draws attention, shares raised to 'buy'
Ringgit susut nilai lagi kerana AS kenaikan kadar faedah matawang AS dan kekuatan dolar
Apa Itu Saham Ekuiti Syarikat
Unit Risiko Pelaburan Asian Equity
PNB mahu tingkatkan pelaburan dalam ekuiti swasta
Kelebihan Pelaburan Ekuiti
Residual Income & Career
Golongan Elit Mewah Di Selamatkan Oleh Keuntungan Ekuiti di Tahun 2015 Yang Mencabar
Kejayaan Pelancaran Ekuiti di Perak
Online Pocket
1st Batch Complete Profits
Kumpulan Wang Persaraan (KWAP) Turun Dividen 5%
Waspada Skim Cepat Kaya
Ramai Ketinggalan Di Dalam Pelaburan Hartanah