MORNING CALL:27/7/23

TA Securities is positive on Able Global’s proposed disposal of 6 vacant industrial land parcels. Here’s why.

Transcript

00:00 This morning, it's Able Global.

00:03 TA Securities is maintaining its buy recommendation and target price of RM1.48 per share.

00:09 The counter last traded at RM1.28.

00:12 So Able Global is proposing to dispose of six lots of industrial land in Kapas Langor

00:17 for RM34.7 million or RM73.80 per square foot.

00:22 According to TA, that's a premium of circa 76%.

00:26 Compared with the land transaction in Kapa in December 2020 by AYS Ventures at RM42 per

00:33 square foot.

00:34 But, the research house believes the premium could be due to the fire sale during the COVID-19

00:39 pandemic and that Able Global's disposal is fairly valued.

00:43 TA is positive on the deal as it provides an opportunity for Able Global to unlock its

00:48 value and pare down its borrowings.

00:50 Plus, TA believes the disposal is part of the consolidation process for the company's

00:56 existing facilities in line with its blueprint to get its factories in the Klang Valley to

01:01 be adjacent to each other.

01:03 As the deal is still under preliminary stage, TA said it's making no changes to its earnings

01:08 forecasts.

01:09 According to Bloomberg data, a total of three research houses cover Able Global and all

01:14 three are recommending buy.

01:16 Average target price RM1.59 which is 24% higher than the stock's last close of RM1.28.

01:23 [Music]