Company Name: AUSGROUP LIMITED
| Research House: OSK | Price Call: BUY | Target Price: 0.66 |
AusGroup has revealed the details of the next key step towards its relisting onto the ASX. The RTO companies will be Kebun Sedenak Sdn Bhd and Tropik Sentosa Sdn Bhd (Target Group), whose assets include freehold land and a golf resort in Malaysia. "As insufficient information was disclosed, our valuation of $0.66 is for AusGroup only, and we leave as potential upside any incremental value arising from the RTO," says OSK DMG in a note.
The Target Group owns about 1,015 acres of freehold land in Iskandar Malaysia and intends to acquire another 47 acres for a total of 1,062 acres. They also own The Legends Golf & Country Resort, which is a master-planned resort comprising one 18-hole Jack Nicklaus-designed championship course, one 9-hole Arnold Palmer-designed course and other assets. The main business of the Target Group after the RTO will be property development and management.
The Target Group’s shareholders include the Oh family which owns The Legends Fort Canning Park, Hotel Fort Canning, and is linked to the Eng Wah Global Group. Another big name is The New World Group from Hong Kong, a conglomerate with HK$311 billion in assets.
The ASX listing will i) offer AusGroup additional currency to pursue M&A opportunities in Australia, ii) improve its access to funds and banking arrangements being listed in a market with investors familiar with its operating environment, iii) increase its profile and enlarge its client base in Australia, and iv) increase its currency to retain staff via share schemes. As such, we see continued impetus for management to complete this relisting process.
After current shareholders receive distributions in specie of the ASX-listed Austco shares, the SGX-listed AusGroup will contain only Target Group assets. "Without sufficient information to fair-value these assets, we leave as potential upside any incremental value from the land and golf resort, and maintain our BUY on AusGroup at a TP of $0.66," says OSK DMG.
No comments:
Post a Comment