$CRESNDO / 6718 (CRESCENDO CORPORATION BERHAD) : Strategic Land Disposal and Surging Share Prices Propel Growth

1. Land Disposal Announcement:
Crescendo Corp Bhd has announced the disposal of a piece of vacant freehold land measuring 1.1 million sq ft in Pulai, Johor for RM132.47 million, or RM120 per sq ft. This transaction involves its wholly owned subsidiary, Panoramic Industrial Development Sdn Bhd (PID), entering into a conditional sale and purchase agreement with Microsoft Payments (Malaysia) Sdn Bhd.

2. Previous Land Disposals:
It is noteworthy that Crescendo disposed of three vacant pieces of land measuring 2.62 million sq ft, near the vicinity of the latest proposed land, for RM315.17 million cash to Microsoft Payments in November 2023.

3. Anticipated Gain:
Crescendo anticipates a net gain of RM80.83 million from the latest proposed land sale.

4. Utilization of Proceeds:
The group plans to utilize the net cash proceeds of RM127.7 million for debt repayments (RM50 million), working capital (RM73.41 million), related exercise expenses (RM11.5 million), and disposal-related expenses (RM4.77 million).

5. Approval Requirements:
The sale and related exercise will require written confirmation from the Equity Development Division of the Ministry of Economy, as well as from the Johor state authority.

6. Expected Completion:
The proposed disposal is expected to be completed by the fourth quarter of 2024, subject to any unforeseen circumstances.

7. Ownership:
Crescendo is 70%-owned by the Gooi family, who also holds a controlling stake in the plantation group Kim Loong Resources Bhd.

8. Share Price Movement:
Shares in Crescendo surged to a record high following the announcement of the latest land disposal plan. On April 4, 2024, the shares closed three sen or 0.99% higher at RM3.07. On April 5, 2024, during Friday’s morning session, the counter rose as much as 5.86% to RM3.25 before paring its gains to RM3.22 by noon break. At RM3.25, the group is valued at RM903.09 million. Year to date, the stock has rallied 32.33%.

9. Dividend Declaration and Financial Performance:
Crescendo declared an interim dividend of five sen per share and a special dividend of 13 sen per share, following its surge in earnings to a seven-year high. Net profit more than doubled to RM57.06 million for the financial year ended Jan 31, 2024, while revenue surged 58% to RM341.35 million.