RHB maintains forecasts for AME Elite


KUALA LUMPUR: RHB Research has kept its earnings projections for AME Elite Consortium Bhd as it awaits further guidance following the developer's proposal to acquire land in Nusajaya.

According to the research house, the purchase proposal is in line with expectations as AME only has 106 acres left for development.

"We make no changes to our earnings forecasts for now, pending management’s guidance on the potential GDV of the land and target customers.

"Both AME and UEM Sunrise are expected to officially sign the sales and purchase agreement within a month. We will then make necessary adjustments to our forecast and valuations," it said.

Last Friday, AME announced it had entered into a heads of agreement with UEM Sunrise to acquire 169.8 acres of freehold industrial land for a total of RM434.3mil.

The land is is located at the Southern Industrial & Logistics Clusters (SiLC) Phase 3.

According to AME' management, the acquisition will be funded via part of its IPO proceeds as well as bank borrowings.

RHB believes the purchase consideration translates to a land cost of RM58.70psf, which is very much in line with the previous selling prices for Phase 1 and 2 in SiLC a few years earlier, considering that AME is now acquiring a bigger plot.

RHB maintained its "buy" call on the stock with an unchanged target price of RM2.34.
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