Monday, May 23, 2011

TWS ... May11

TWS owned 69.76% stake in TWP as at April 16, 2010, is majority owned by Tan Sri Syed Mokhtar, a 42.97% stake holder as at April 30, 2010. Syed Mokhtar also held a 71.48% stake in the company as at April 30, 2010.

The market is expecting the companies to undertake corporate exercises, following the various deals seen at Syed Mokhtar’s other companies.

A TWC official said he is unaware of any corporate exercise for the group. Another story is the development of a multi building project where TWC’s Crowne Plaza hotel is located. The development will include an underground MRT station as part of the Greater KL MRT project.

The stations and alignment for the first phase of the MRT project, known as the blue line, have been announced, but the hotel has not been identified as one of the stations. However, details for the Circle and Orange lines are still unknown. Ground breaking for Blue line is expected in mid July 2011 after which, attention will turn to the Circle line.

The listing of MSM Malaysia Holdings Bhd may have stirred interest in TWS. TWS owns Central Sugars Refinery Sdn Bhd and Kilang Gula Padang Terap Bhd – two of the four sugar producing close to 60% of refined sugar in Malaysia. Central Sugars and Kilang Gula control the remaining 40%.

Applying a PER eight times, given that TWS has smaller share of the sugar market and based on its contribution of rm267.7 million to the group’s FY2010 ended Dec 31 results, its sugar division could be worth rm2.1 billion.

TWS had a market cap of rm3.1 billion as at mid May 2011. Besides sugar, it has exposure to rice and palm oil through Bernas and TWP respectively.

Besides on Bernas’ and TWP’ respectively market caps of rm1.3 billion and rm2.1 billion. TWS’s stake in these companies are worth rm2.4 billion. The combined value of TWS’ sugar divisions’ implied valuation and its stakes in Bernas and TWP mean that TWS could be worth rm4.5 billion or rm15 per share.

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