KUCHING: Pos Malaysia Bhd (POSM) is planning to unlock its under-utilised land through a land sale. It was expected that the government would provide leeway for the company to do this.AmResearch Sdn Bhd (AmResearch) said in its research report that after a detailed analysis of the properties of the group, it was found out that it held three under-utilised pieces of land with an estimated worth of RM250 million or RM0.46 per share.
It was reported that the land with the most significant development potential was a tract next to KL Sentral which was currently a PosLaju centre and a warehouse for vehicles.
The 2.7-acre piece of land was valued at RM1,800 per square feet. This was RM0.39 per share or 13 per cent of current price.
Furthermore, it was reported that the more concrete sale in the immediate term would be POSM’s current 2.2-acre mail processing centre in Bukit Raja.
This property was expected to be vacant once the national mail-processing centre in Shah Alam opened in the fourth quarter of the current financial period.
It noted that the stock represented an opportunity for a six per cent yield and an implied 25 per cent return on top of a special dividend potential arising from its land sale with re-rating catalysts from the government’s deregulation.
On the other hand, the research house increased its forecasts for 2011-2012 on the back of the salary review from a one-off tariff hike. However, on the net basis the valuation remained intact.
Concerning the group’s salary adjustment, a 10 per cent yearly increment for the next three years was projected.
However, the management of POSM had officially declared an immediate 11 to 20 per cent increase once the new tariff rates would be in effect from July this year.
As a result, the research maintained an unchanged fair value of RM3.80 per share based on 20 per cent discount to discounted cash flow estimates.
However, the earning per share for the group for the current financial year was lowered by 20 per cent.