STOCK FOCUS OF THE DAY
WCT Holdings: Acquiring 60% of Subang Skypark for RM44.6mil HOLD
We maintain our forecasts but cut our SOP-based FV by 17% to RM1.38 (Exhibit 1) (from RM1.66) as we increase the discount to its property RNAV to 40% (from 25%) to reflect the prolonged slowdown in the property market. We maintain our HOLD call.
Confirming news reports in Feb 2018, WCT has proposed to acquire a 60% stake in Subang Skypark Sdn Bhd (Subang Skypark) for RM44.6mil cash. Subang Skypark holds the concession to operate the commercial/retail area, a car park area, a business aviation centre as well as a “hangarage” complex in Subang Skypark Terminal 3, Sultan Abdul Aziz Shah Airport in Subang.
We are at best only neutral on WCT’s latest acquisition. While we see value in the commercial/retail area in Subang Skypark Terminal 3 that may be poised for positive rental reversion backed by rising passenger traffic, and the car park area with development potential, these may take time to realise. On the other hand, the acquisition cost coupled with the consolidation of Subang Skypark’s debt will add further strain on WCT’s balance sheet.
RETAIL RESEARCH
Stocks On Radar: Malaysia Steel Works, Sino Hua-An, Lion Industries, Leon Fuat
ECONOMIC HIGHLIGHTS
Malaysia: Second month manufacturing PMI in contraction
Indonesia: Inflation expected to be within BI’s target
Thailand: Central bank to maintain policy rate
NEWS HIGHLIGHTS
Hibiscus: Allocates US$105m to develop two assets
Maybulk: To exit offshore services sector via disposal of POSH stake
Pasukhas: To diversify into property development, coal trading
Tatt Giap: Ventures into property
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