Hot Stock MKH rises 8% on possible plantation float

Hot Stock MKH rises 8% on possible plantation float
Business & Markets 2014
Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com
Wednesday, 05 February 2014 14:55

KUALA LUMPUR (Feb 5): MKH Bhd rose as much as 7.7% after a note by HwangDBS Vickers Research (HDBSVR) saying that the company may float its plantation operation.

At 2.43 pm, MKH was traded at RM3.22, up 22 sen or 7.3% from RM3.00 with some 983,000 shares done.

It was among the top gainers on the exchange, and had earlier risen as much as 23 sen or 7.7% to RM3.23.

MKH’s warrants (MKH-WB) also rose in tandem and was traded at RM1.68, up 17 sen or 11.3% from RM1.51.

In a note Tuesday, HDBSVR said that MKH may float its plantation operations in the longer term, to unlock value for its shareholders.

“At current valuation, the market is assigning zero value to its plantation business which we estimate is worth more than RM1 billion,” said the research house.

The research house also mentioned that the group was due for a multi-year rerating, with RM890 million worth of affordable housing projects in the pipeline for FY14, coupled with its maturing oil palms in its plantation segment.

The affordable housing projects in the pipeline is expected to further boost its record high unbilled sales of RM503 million.

“MKH is a rare gem that offers both deep value and strong earnings growth,” said the research house.