MPHB rises on asset sale to MCA

KUALA LUMPUR: MULTI-PURPOSE HOLDINGS BHD [] (MPHB) shares rose on Tuesday, Sept 27 after the company’s decision to dispose its its Menara Multi-Purpose to the Malaysian Chinese Association (MCA) for RM375 million cash was viewed as a positive move to make MPHB into a purer gaming concern.

At 9.15am, MPHB gained seven sen to RM2.28 with 441,200 shares done.

MPHB on Sept 26 had said that the proceeds from which would be utilised to repay its bank borrowings.

It had entered into a sale and purchase agreement with MCA to sell the office tower together with 414 car park bays. Its original cost of investment in the office tower from 1993 to 1996 and the parking bays in 2004 was a total of RM289.03 million.

MPHB said based on the latest net book value of the PROPERTIES [] as at Dec 31, 2010 of RM175.38 million, the company would have an estimated gain of RM199.62 million from the sale.

Maybank IB Research maintained its Buy rating on the stock and raised its target price to RM3.64 from RM3.60.

“We are highly encouraged by this development as it proves that management is committed to disposing its non-core assets and distilling itself into a purer gaming concern.

“We like MPHB for its cheap valuations at 8 times 1-year forward PER. Disposal of non-core assets will re-rate this stock, albeit, gradually via special dividends and stronger recurring dividends,” it said on Sept 27.