KUALA LUMPUR (Jan 16): TA Securities Holdings Bhd had today advised Selangor Properties Bhd (SPB) shareholders to accept the revised RM6.30-a-share privatisation offer from Kayin Holdings Sdn Bhd, given the challenging market environment and low trading liquidity of SPB shares.

Yesterday, theedgemarkets.com, quoting SPB's statement to Bursa Malaysia, reported that SPB's major shareholder Kayin revised its proposed selective capital reduction and repayment (SCR) offer price to RM6.30 from RM6 for each SPB share to privatise the company.

Today, TA Securities analyst Thiam Chiann Wen wrote in a note: "Although SPB owns prime landbank in the Damansara Heights area, we believe opportunities for landbank value realisation is slim in the next [12 months]. This is in view of the prevalent oversupply of commercial and luxury residential sectors. In addition, the prolonged delay in new launches would further dampen the group's earnings prospects. Given the challenging market environment and low trading liquidity of SPB's shares, the SCR represents an opportunity for entitled shareholders to realise their investment in SPB."

"We raise our target price to RM6.30, at par with the revised offer price from Kayin.

"We advise investors to accept the offer," Thiam said.

According to the analyst, the revised SCR offer price translates to 0.8 time 2019 price-to-book (P/B) ratio, a premium to the stock's five-year historical P/B ratio of 0.6 time and the sector's average 2019 P/B ratio of 0.6 time.

At 10:24am today, SPB shares were traded unchanged at RM6.07 with a trading volume of 167,000. — theedgemarkets.com

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