The research house opined that the votes at IJM Corp's EGM are likely to be in favour of a disposal, which will trigger an MGO for the shares in IJM Plantations at the same offer price of RM3.10 a share plus 10 sen dividend per share.
According to Kenanga, the offer price translates into an EV/planted hectare of about RM54,000, which is line with market price.
"IJMP’s estates are located in Sabah (41%) and Indonesia (59%) with an average EV/planted Ha of c.RM80k and c.RM40k, respectively – giving the
aggregated estate an average market price of c.RM56k.
"Meanwhile, the implied FY22E PER/PBV is 23.6x/1.9x (41%/101% premium to closest upstream peer HSPLANT) which is highly attractive," it said.
The EV/planted hectare for closest peer Hap Seng Plantations Holdings Bhd is about RM39,000.
Meanwhile, Kenanga believes IJM Plantations will benefit from the synergy of its operations in Sabah, East Kalimantan and Sumatra as well as KLK's more efficient production cost structure.