KUALA LUMPUR: Genting Plantations Bhd
’s shares on Bursa Malaysia went up in early trade today, after announcing a joint venture (JV) into vegetable farming in Kulai with an established Chinese partner.
As at 10 am, the counter rose 2.0 sen to RM4.97 with a total of 7,800 shares changing hands.
Maybank Investment Bank Bhd foresaw that the JV with Shandong Shouguang will likely net an immediate property development profit of over RM20 million, or a 6.0 per cent increment, to financial year 2026 estimates if it is developed on Genting Plantations’s land.
"We believe the 28.328-hectare development will likely be located on Genting Plantations’s land in Kulai, helping unlock the value of its land in Johor-Singapore Special Economic Zone and making some development profits at the onset.
"As Genting Plantations will still own 60 per cent of the JV, it can only recognise the disposal gains of 40 per cent of its land sales and development profits on this transaction,” it said in a note today.
In a filing with Bursa Malaysia yesterday, Genting Plantations said its indirect wholly-owned subsidiary ACGT Vegetable AgVentures Sdn Bhd (AVA) has proposed to undertake a JV with Shouguang Vegetable Science and Technology Sdn Bhd (SVST).
"The proposed JV will be implemented via the setting up of two joint venture companies, namely JV Technology Company and JV Operating Company, wherein AVA and SVST will hold 60 per cent and 40 per cent of shares in both these joint venture companies, respectively,” the group said.
Meanwhile, CIMB Securities Sdn Bhd said the project is unlikely to be earnings-accretive in the near term, given the high upfront capital expenditure required for technology acquisition and seed-breeding or research and development facilities.
"The JV also represents a diversification away from Genting Plantations’s core palm oil business. That said, proceeds from its recent disposal of agricultural land in Melaka to Scientex for RM333.8 million should be sufficient to fund this investment,” it said. - Bernama
