KUALA LUMPUR (March 21): RHB Research Institute is maintaining its sum-of-parts based fair value of RM25.80 for Kuala Lumpur Kepong and its market perform call.
KLK is expanding its oil palm PLANTATION [] area in Indonesia with the acquisition of PT. Global Primatama Mandiri (PT GM) which has the rights for 7,400 ha of land in Kalimantan for plantations. The acquisition price for the 90% stake in PT GM is RM3.60 million.
PT GPM holds a certificate of licensed location for 7,400 ha of land in Kecamatan Kelay, Kabupaten Berau, east Kalimantan which it intends to develop into oil palm plantations in due course.
RHB Research said assuming 70% of the land is plantable, the effective acquisition price of RM3.6 million values the land at around RM772 a hectare (US$257 per ha), relatively inexpensive for greenfield land in Kalimantan. Previous land transactions there have been at US$300 to US$700 per ha.
“We are positive on this acquisition as it would enlarge KLK’s landbank by 3% to bring total landbank to almost 262,000ha,” it said.
RHB Research said there was no change to its forecasts as this land would take a few years to contribute to KLK’s bottomline.
KLK is expanding its oil palm PLANTATION [] area in Indonesia with the acquisition of PT. Global Primatama Mandiri (PT GM) which has the rights for 7,400 ha of land in Kalimantan for plantations. The acquisition price for the 90% stake in PT GM is RM3.60 million.
PT GPM holds a certificate of licensed location for 7,400 ha of land in Kecamatan Kelay, Kabupaten Berau, east Kalimantan which it intends to develop into oil palm plantations in due course.
RHB Research said assuming 70% of the land is plantable, the effective acquisition price of RM3.6 million values the land at around RM772 a hectare (US$257 per ha), relatively inexpensive for greenfield land in Kalimantan. Previous land transactions there have been at US$300 to US$700 per ha.
“We are positive on this acquisition as it would enlarge KLK’s landbank by 3% to bring total landbank to almost 262,000ha,” it said.
RHB Research said there was no change to its forecasts as this land would take a few years to contribute to KLK’s bottomline.
