Sale of Platinum Sentral likely to boost MRCB earnings

by **Cals** Tue 10 Sep 2013, 08:05

Published: Tuesday September 10, 2013 MYT 12:00:00 AM
Updated: Tuesday September 10, 2013 MYT 7:29:24 AM
Sale of Platinum Sentral likely to boost MRCB earnings
PETALING JAYA: Malaysian Resources Corp Bhd (MRCB) is expected to gain a significant boost to its earnings from the potential sale of its office-and-retail-block Platinum Sentral in Kuala Lumpur, according to CIMB Investment Bank Bhd.
“If the deal materialises, MRCB would pocket a net gain of up to RM350mil. This would be a significant boost to its earnings per share for 2013-2014 and could potentially raise its revalued net asset value (RNAV) by as much as 9%,” CIMB said in its report.
While acknowledging that the timeline for the potential asset sale was fluid, CIMB said it expected MRCB to realise the asset sale between the second half of this year and 2014.
CIMB noted that MRCB’s management had confirmed that there were plans to monetise Platinum Sentral, which is located in the KL Sentral area, but such a deal was still in the early stages.
News about MRCB’s plan to dispose of Platinum Sentral to pare down its debts emerged last week. MRCB had reportedly engaged real estate agency CB Richard Ellis (M) Sdn Bhd to manage the sale of the property, which comprises five low-rise blocks of office and retail space.
The building, which comes with a gross floor area of 980,000 sq ft, with a net lettable office space of 445,000 sq ft, is said to be valued at RM750mil.
The news, CIMB said, was a “positive surprise.”
The broker raised MRCB’s RNAV, as it rolled over valuations to end-2014 and applied a higher 15.9 times price-earning (P/E), compared with 15.6 times P/E previously.
CIMB has upgraded its target price for MRCB’s shares to RM1.64 from RM1.59 previously. But it maintained a neutral stance on the counter.