Benalec under selling pressure after Q4 net losses

KUALA LUMPUR: Benalec Holdings Bhd's share price slid to a low of 91.5 sen on Tuesday after it posted net losses of RM15.62mil in the fourth quarter ended June 30, 2014 from RM4.04mil a year ago.

At 11.27am, it was down 4.5 sen to 93.5 sen. Turnover was 12.26 million shares at prices ranging from 91.5 sen to 95.5 sen.

The FBM KLCI edged up 0.34 of a point to 1,862.65. Turnover was 1.40 billion shares valued at RM636.09mil. There were 390 gainers, 261 losers and 294 counters unchanged.

Benalec posted net profit of RM7.20mil for the financial year ended June 30, 2014, an 87.3% decline from the previous financial year's earnings of RM56.75mil.

AmResearch is maintaining its Buy call on Benalec Holdings with a revised fair value of RM1.25 a share from RM1.31 a share previously.

The research house pointed out Benalec's contract momentum continues to be on an upturn. The group is set to receive RM360mil from three land sales with SPAs that will likely be recognised over the next three years.

The research house said three land sales from its Malacca concessions highlighted above were transacted at average land prices of RM40psf-RM48psf.

"This suggests some upside to our maintained average pricing of RM28psf for some 400 acres of land inventory that Benalec can sell.

"On top of that, Benalec managed to snag another repeat contract in Malacca worth RM204mil from the Oriental Group last May, where the payments are in cash," it said.

AmResearch said the group appears to be ramping up efforts to secure more land sales in Malacca while eyeing more reclamation concessions within the state.

"All said, Benalec's key re-rating angle still largely hinges on its ability to monetise the deep development potential of its Johor concessions.

"All eyes will be on its protracted negotiations with 1MY Strategic Oil Terminal Sdn Bhd, which will lapse on Dec 11 following three rounds of extensions.

"We have conservatively shifted maiden contributions from its Johor concessions from FY15F to FY16F. But, our current assumptions only reflect 3,000 acres of its Tanjung Piai concession.

"For the record, Benalec has development rights to reclaim sea-fronting land totalling 5,245 acres (Tanjung Piai: 3,485 acres; Pengerang: 1,760 acres) in South Johor as a future oil hub," it said.
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