TA: Strategic Asset Disposal Strengthens Balance Sheet, Analyst Reaffirms ‘Buy’
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A recent strategic move to dispose of a non-core property asset is set to significantly bolster the company’s financial position, according to a report by TA SECURITIES. The investment bank maintains its “Buy” recommendation on the stock, citing the positive implications of the asset disposal.
Strategic Asset Disposal
The company has entered into a Sale and Purchase Agreement for the disposal of a three-storey shoplot, including its fixtures and fittings, for a total cash consideration of RM7.8 million. The property, with a built-up area of approximately 368.4 square metres, is located in Taman Bukit Mayang Emas, Petaling Jaya, Selangor. The transaction aims to unlock the value of this non-core asset, which had an indicative market value of RM6.8 million, as assessed by an independent valuer.
Financial Impact and Future Outlook
Management intends to utilize the proceeds from this disposal for future investments, business acquisitions, and working capital purposes. This strategic move is expected to generate a disposal gain of RM5.1 million, which will further strengthen the group’s balance sheet and provide enhanced financial flexibility for new business opportunities. As of the end of the second quarter of FY25, the group reported a healthy net cash position of RM29.7 million with zero borrowings. The proposed disposal is anticipated to be completed by the fourth quarter of 2025.
TA SECURITIES notes that its earnings forecasts for FY25 to FY27 remain unchanged for now, pending the full completion of the disposal.
Analyst View
TA SECURITIES has reiterated its “Buy” call on the stock, maintaining its target price of RM0.63. This valuation is based on an unchanged price-to-earnings (PE) multiple of 10x against the estimated CY26F EPS. The analyst’s positive outlook is driven by the strategic financial benefits derived from the asset disposal, reinforcing the company’s robust balance sheet and enabling future growth initiatives.
