SWIFT has proposed to dispose of an industrial land parcel measuring 11.9 acres in Bandar Sultan Sulaiman, Klang, Selangor, for RM38.4m cash. This will book in a one-off gain of RM14 million which will earn accretive interest savings that will boost its FY23F earnings by 3%. The proceeds will also reduce its net gearing from 0.83x to 0.78x. With this exercise, Kenanga is maintaining its forecasts pending the completion of the deal with a TP of RM1.01.
The transaction values the land at about RM74 psf. In comparison, industrial land parcels in proximity are listed ranging from RM65 psf to RM88 psf. The land is currently used as a container depot yard which SWIFT deems a non-core asset.
There is no adjustment to the target price based on ESG given a 3-star rating as appraised. Kenanga likes the stock for its, position as the leader in haulage business commanding close to 10% of the Malaysian market share, and above peers’ pre-tax profit margin of 10% compared to the industry average at 4% with its integrated offerings and cost-service advantage.
