We are overall positive on its proposal to dispose 3,819 ha (or 9% of group planted) oil palm planted area for IDR2.429tr (or MYR712m) cash; giving an estimated net disposal gain of MYR360m. However, there is no proposal to reward shareholders with one-off dividends. There is also no certainty the deal could be completed by 1Q23, given the onerous conditions precedent. Positively, if it materialises, TSH’s proforma net gearing will dip to 5% (from 45%). TSH remains a HOLD. We prefer KLK (BUY).
KE: TSH Resources – HOLD TP RM1.60
