In a filing with Bursa Malaysia yesterday, Sime Darby said SDE had on Feb 5 received a notice from the Dubai International Arbitration Centre (DIAC) that EMAS had submitted a request for arbitration against SDE which was filed on Jan 24, 2016. The amount that EMAS is seeking from the arbitration proceedings is AED41.04mil (about RM46.37mil).
KUALA LUMPUR: The de-merger of Sime Darby, which is expected to take place by November/December this year, could create between RM5bil and RM6bil in value, says Public Investment Bank (PIVB) Research.
It said on Thursday this would be an enhancement of 9%-10% in value versus the current structure.
Sime Darby Property
could be the key growth driver in value creation given the tremendous asset value to be unlocked, said PIVB Research.
“In addition, assuming all three units break into the FBM KLCI Index as component members, our calculations show a potential 0.5% or estimated 10 point lift to the KLCI.
“Current price of RM9.05 represents a steal and a short-term trading opportunity. Our Outperform call is therefore reaffirmed with a sum-of-parts derived TP of RM9.72,” it said.
Touted as one of the world’s leading plantation players, Sime Darby Plantations will own 602,509 ha of planted area across Malaysia, Indonesia, Liberia and Papua New Guinea with a combined fresh fruit bunches (FFB) production of 9.7 million tonnes.
“We derive an estimated market capitalisation of RM30bil based on an forward earnings of RM1.2bil, pegged to a PE multiple of 25 times, which we think is justifiable given the huge sizeable landbank and FFB production,” it said.
As for Sime Darby Property, PIVB Research said it currently owns 16,938 acres of developable land spanning Klang Valley, Negri Sembilan and Johor with a total estimated GDV of RM101bil, to last over the next 15 to 20 years.
The company has further access to additional landbank of 11,806 acres through Land Option Agreements.
“We think there is tremendous potential upside for Sime Darby Property as a majority of its landbank is strategically located in close proximity to the Malaysia Vision Valley and high speed rail projects,” it said.
PIVB Research said valuations could be further lifted when the property market starts picking up after seeing a slowdown over the last two years.
Based on our conservative estimated RNAV valuation, the property unit’s market capitalisation would be valued in the range of RM12bil to RM17bil, making it one of the biggest property players in Malaysia.
“From the investors’ perspective, we believe Sime Darby Property would provide more potential upside given its i) low entry of landbank cost, ii) strategically located landbank next to major developments or economic corridors, iii) huge landbank across three states.
“Sime Darby Berhad will eventually consist of the industrial, motors, logistics and other non-core businesses.
“All-in, we think that the market capitalisation would be at least RM15bil based on 15 times FY19 EPS and book value for the investment properties.
“Given the recent sharp rally in commodity prices, we believe the company’s industrial sales are set to pick up, driven by increased mining activities with the sharp rebound in commodity prices,” said PIVB Research.
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