Analysts are neutral on KLK’s proposed acquisition of a 33% stake in Boustead Plantations Bhd for RM1.15 billion.
For the nine-month period, KLK’s net profit tumbled 57.9% to RM717.95 million from RM1.7 billion last year while revenue fell 11.4% to RM17.87 billion from RM20.17 billion a year earlier. However, the research house maintained its “hold” call on KLK with a lower sum-of-parts derived target price of RM22.68 from the previous RM23.87.On KLK’s proposed acquisition of a 33% and 1 share stake in Boustead Plantations Bhd for RM1.15 billion, HLIB Research was neutral on this acquisition.
As at Dec 31, 2022, BPlant manages 42 oil palm plantation estates and has 10 palm oil mills in Malaysia with total land bank of 97,399ha and a total oil palm planted land area of 72,291ha. However, it maintained its “neutral” rating for KLK with an unchanged sum of parts-based TP of RM21.39. On the latest acquisition, AmInvest believes it would not be earnings-accretive in the short-term as BPlant has high production costs and low FFB yields.