CHINTEK
Chin Teck Plantations Berhad
Company Background
Gamuda Buys Land from MUI Properties-Chin Teck JV for RM424m Cash, for Data Centre Project
Gamuda Bhd is acquiring 389.7 acres of land in the Springhill Industrial Park, Port Dickson for RM424.4 million, cash, from a joint venture (JV) between MUI Properties Bhd (MUIPROP) and Chin Teck Plantations Bhd.
Gamuda intends to use the land to develop cloud or data centre infrastructure, according to its bourse filing on Monday. Gamuda’s indirect subsidiary, Gamuda DC Infrastructure Sdn Bhd, has signed a sale and purchase agreement with West Synergy Sdn Bhd for the deal.
West Synergy is 60%-owned by MUI Properties’ wholly-owned Peristal Enterprise Sdn Bhd and 40%-owned by Chin Teck’s Double Alliance Sdn Bhd. MUI Properties is 72.26%-controlled by Malayan United Industries Bhd (KL:MUIIND).
The land is valued at RM25 per square foot based on the purchase price. An independent valuation by Savills (M) Sdn Bhd appraised the land's market value at RM400 million, or RM23 per square foot.
Gamuda plans to use internal funds to pay for the acquisition. As of end-October this year, the group had RM3.12 billion in cash reserves. The land purchase is expected to be completed by the end of July 2025.
MUI Properties said Gamuda acquired the land in the industrial park of its flagship Bandar Springhill development for the outfit's high-tech digital infrastructure hub.
“Bandar Springhill, which strategically straddles the North-South Expressway and is within half hour travel to Seremban and KLIA, is sited within Malaysia Vision Valley 2.0 planned to elevate the country’s progress in digitalisation and high-tech digital infrastructure development. The sale is expected to establish Springhill as a hub for high-tech digital infrastructure and complementary developments,” it said in a separate filing.
With this transaction, MUI Properties has made a major step forward in the group’s ongoing initiative to monetise its land bank and investment properties, said its executive chairman and chief executive officer Andrew Khoo. "The sale proceeds will, amongst others, enable us to expand our portfolio of new land banks for further growth and long term sustainability."
The company is expected to book a pro forma net gain of RM206.13 million from the land disposal.
Shares in Gamuda ended nine sen or 1.92% higher at RM4.78 on Monday, valuing the group at RM27.19 billion.
MUI Properties' shares closed unchanged at 43.5 sen, giving the company a market capitalisation of RM328.59 million. Chin Teck also settled unchanged at RM7.97, valuing it at RM728.17 million.
$CHINTEK / 1929 (CHIN TECK PLANTATIONS BERHAD) $GAMUDA / 5398 (GAMUDA BERHAD) $MUIIND / 3891 (MALAYAN UNITED INDUSTRIES BERHAD)
Source from The Edge
KUALA LUMPUR: Chin Teck Plantations Bhd expects satisfactory plantation results for the financial year ending Aug 31, 2025 (FY25).
$CHINTEK / 1929 (CHIN TECK PLANTATIONS BERHAD)
Research by Public
Neutral – TP RM8.60
“Another Set of Commendable Results”
Excluding i) foreign exchange gain (RM1.3m) and ii) net fair value gain on investment securities (RM3m), Chin Teck Plantations posted 9MFY24 core earnings of RM60.5m, up 71.9% YoY, mainly bolstered by a surge in FFB production and lower production cost. The strong results were above our and consensus full-year expectations, making up 87% and 78%, respectively. We raise our FY24-26F earnings forecasts by 13-16% to reflect stronger FFB production growth, though also account for larger losses from the associates. Maintain Neutral with a higher TP of RM8.60 based on lower multiple of 10x FY25 EPS (previously 11x) given increased concerns over its Indonesian operations. A 2nd interim dividend of 8sen and a special dividend of 20sen was declared for the quarter, bringing the cumulative dividend 40sen (9MFY23: 20sen).
Analyst:
Chong Hoe Leong
chonghoeleong@publicinvestbank.com
$CHINTEK / 1929 (CHIN TECK PLANTATIONS BERHAD)
MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)
DISCLOSURE ON QUARTERLY PRODUCTION
KUALA LUMPUR: Chin Teck Plantations Bhd is projected to achieve commendable results for its financial year 2024 (FY24), due to the stronger-than-anticipated fresh fruit bunches (FFB) growth in the first nine months and stable crude palm oil (CPO) prices.
© New Straits Times Press (M) Bhd
$CHINTEK / 1929 (CHIN TECK PLANTATIONS BERHAD)
Research by Public
Neutral – TP RM8.38
“A Decent Year"
In view of the stronger than expected FFB growth for the first 9 months amid steady CPO prices, we expect Chin Teck Plantations to achieve commendable results for FY24F. With a war chest of more than RM400m, the group can look for M&A opportunity to expand its landbank size in the existing plantation area. We do not rule the possibility of a privatisation given the current steep discount to its underlying value, which is trading at an unappreciated P/E valuation of only 2x after stripping out the cash level of RM409m and investment securities of RM140m. Maintain Neutral with an unchanged TP of RM8.38.
Analyst:
Chong Hoe Leong
chonghoeleong@publicinvestbank.com
MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)
PLANTATION
$SWKPLNT / 5135 (SARAWAK PLANTATION BERHAD) $SIMEPLT / 5285 (SIME DARBY PLANTATION BERHAD) $TAANN / 5012 (TA ANN HOLDINGS BERHAD) $CHINTEK / 1929 (CHIN TECK PLANTATIONS BERHAD)
Research by PB
Neutral
“Inventories Climb to 3-Month High”
Palm oil inventories in Malaysia continued on its uptrend in May with a marginal gain of 0.5% to 1.75m mt, the highest level in 3 months. YTD, CPO prices have averaged RM4,034/mt, compared to our full-year average target of RM3,800/mt. In view of higher production in subsequent months, we expect inventory to continue trending upwards, which may consequently exert downward pressure on CPO prices. Maintain Neutral on the sector.
Analyst(s):
Chong Hoe Leong
chonghoeleong@publicinvestbank.com.my
MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)
$CHINTEK / 1929 (CHIN TECK PLANTATIONS BERHAD)
$CHINTEK / 1929 (CHIN TECK PLANTATIONS BERHAD)
Research by Public
Neutral – Target Price RM8.38
“Bolstered by Lower CPO Production Cost”
Stripping out i) foreign exchange gain (RM2.9m) and ii) net fair value gain on investment securities (RM3m), Chin Teck Plantations posted 1HFY24 core earnings of RM36.3m, up 12.7% YoY. The better results were in line with our and the street full-year expectations, making up 46% and 56%, respectively. In view of the stronger-than-expected results, we raise our FY24-26F earnings projection by 7-8% to account for improved OER and lower production cost. Maintain Neutral with a higher TP of RM8.38. No dividend was declared for the quarter.
Analyst:
Chong Hoe Leong
chonghoeleong@publicinvestbank.com
Quarterly rpt on consolidated results for the financial period ended 29/02/2024
OTHERSDECISION ON INTERIM DIVIDEND FOR THE SECOND FINANCIAL QUARTER AND SIX MONTHS PERIOD ENDED 29 FEBRUARY 2024
$CHINTEK / 1929 (CHIN TECK PLANTATIONS BERHAD)
Research by Ambank
Hold (Maintained) – FV of RM8.36
“Comparing CTP with NSOP”
We maintain HOLD on Chin Teck Plantations (CTP) with an unchanged fair value of RM8.36/share, based on a FY25F PE of 10x - the simple average of small cap plantation companies over the past 5 years. We ascribe a neutral 3- star ESG rating to CTP.
Analyst(s):
Gan Huey Ling, CFA
gan-huey-ling@ambankgroup.com
DISCLOSURE ON QUARTERLY PRODUCTION
MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)
$CHINTEK / 1929 (CHIN TECK PLANTATIONS BERHAD)
Research by PB
Neutral – TP of RM7.78
“Strong Cash in Hand”
As of 1QFY24, Chin Teck Plantation is sitting on a cash position of RM408m with zero gearing. It also owns investment securities worth RM132m. Stripping out the combined liquid assets totaling RM540m, the group is currently trading at an undemanding valuation of only 2.6x historical P/E multiple or discounted P/B of 0.79x based on its FY23 numbers. Given steep discount to its underlying value, we do not rule out the possibility of privatisation in the future. Assuming our current valuation of 11x FY25 EPS for the upstream plantation business plus the liquid assets (cash+ investment securities for bond and equity instruments) totaling RM540m, the fair value of the company could be worth more than RM900m or RM9.84/share. Given the lack of catalyst for the time being, we continue to rate with a Neutral call and unchanged TP of RM7.78.
Analyst(s):
Chong Hoe Leong
chonghoeleong@publicinvestbank.com.my
MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)
MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)
$CHINTEK / 1929 (CHIN TECK PLANTATIONS BERHAD)
General Meetings: Outcome of Meeting
$CHINTEK / 1929 (CHIN TECK PLANTATIONS BERHAD)
Research by Public Investment Bank
Neutral – Target Price RM7.78
“A Soft Start”
Stripping out i) foreign exchange gain (RM1.7m) and ii) net fair value gain on investment securities (RM3m), Chin Teck Plantations kick started 1QFY24 with core earnings of RM16.7m, down 30.4% YoY. Nevertheless, the weaker results were in line with our and the street full-year expectations, making up 26% and 25%, respectively. Maintain Neutral with a higher TP of RM7.78 after rolling over our valuations to FY25. A first interim dividend of 8sen and a special single-tier dividend of 4sen were declared for the quarter.
Analyst:
Chong Hoe Leong
chonghoeleong@publicinvestbank.com
Quarterly rpt on consolidated results for the financial period ended 30/11/2023
Change in Boardroom - MR GOH YEOK BENG
Change in Remuneration Committee - MR GOH YEOK BENG
Change in Nomination Committee - MR GOH YEOK BENG
DISCLOSURE ON QUARTERLY PRODUCTION
MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)