THe research house, which has an underperform recommendation on CBIP, said the valuation at EV/ha of RM9.9mil was fair.
"We believe this is fair, benchmarking against MMAG’s recent land transaction (also in Kapar, Klang) on 4th November 2019 with EV/ha of c.RM7.1m.
"This transaction price represents a premium of c.40% against MMAG’s vacant land transaction, which is justified by the factories and other buildings erected on it," it said.
However, the expected gain on disposal of RM6.94mil was excluded from Kenanga's core net profit forecast given the one-off nature of the transaction.
The research house maintained its target price of 78 sen on the stock.
For 2QFY20, Kenanga is expecting earnings to decline as the group has yet to secure any POME replenishment contracts for the year, while the segment will be impacted by the movement control order.
The research house also expects the plantation segment to fall into the red in the quarter.