KUCHING: MIDF Amanah Investment Bank Bhd (MIDF Research) remained neutral on Sime Darby Plantation Bhd (Sime Darby Plantation) reportedly exploring a sale of a minority interest in New Britain Palm Oil Ltd (NBPOL), quoting unidentified sources.
Recall that in March 2015, Sime Darby Plantation acquired NBPOL for US$1.7 billion. It was mentioned in the news that Sime Darby Plantation is considering selling 25 to 49 per cent of NBPOL stake.
“We gather that NBPOL have a total landbank of 139,899 hectares (ha), consisting 86,542ha planted with oil palm and 89 per cent mature). The company also has over 5,600 hectares of sugar cane and 8,956 hectares of grazing pasture.
“Lastly, NBPOL operates 12 oil mills and two refineries in PNG and Liverpool, United Kingdom respectively, as well as a seed production and plant breeding facility.”
As the deal is still in the early stage of exploration, MIDF Research was neutral on the news.
“Factors that we will consider will include the valuation of the deal, the actual amount of stake to be sold eventually and whether there is synergy in the potential future buyers.
“We maintain our core net profit estimate for FY18 at RM1.17 billion. For FY19, our core net profit forecast is RM1.21 billion.
“We thus maintain neutral on Sime Darby Plantation with target price of RM5.60 per share.”