Sime Darby advances to the highest since demerger

The company said in a statement that Elsa marks the launch of the Sime Darby Property Affordable Collection which include high-rise and landed properties priced below RM500,000, located within the Klang Valley

KUALA LUMPUR: Shares of Sime Darby Bhd rose to a high of RM2.71 on strong fund buying late Thursday and pushing its market capitalisation to more than RM18bil.

At 4pm, the FBM KLCI was up 6.51 points or 0.36% to 1,799.30. Turnover was 4.22 billion shares valued at RM2.40bil. There were 559 gainers, 367 losers and 460 counters unchanged.

Sime Darby rose 25 sen to RM2.66 with 18.22 million shares done.

Sime Darby Plantation gained five sen to RM5.55 and giving it a market capitalision of RM37.74bil.

Sime Darby Property Bhd added five sen to RM1.57 and this saw its market capitalisation rising to RM10.67bil.

The plantation and the property businesses were demerged from Sime Darby and were listed on the Main Market of Bursa Malaysia on Nov 30.

Earlier, Maybank Investment Bank Research downgraded Sime Darby Plantation to Hold from Buy, given no clear catalysts after the counter surpassed its target price.

"Sime Darby Plantation’s share price has risen sharply over the past month (+20% on-month). We continue to like Sime Darby Plantation for its quality assets, size and geographical diversity, and we are mindful of its RM9.45 a share realised net asset value (RNAV),” it said.

PublicInvest Research has initiated coverage of Sime Darby Plantation with a Neutral call and a target price of RM5.68. 

It said on Thursday the current share has fully reflected the muted crude palm oil (CPO) price performance. 

The research house said the target price was based on forward price-to-earnings ratio (PER) of 29 times (15% premium to the industry average of 25 times), which is justifiable.

The factors are the i) sizeable plantation landbank, ii) strong market share in the global palm oil production and iii) decent average age profile of 12.9 years old.