RHB Research raises estimated GDV for AME Elite’s industrial projects in Johor by 10-12%

• RHB said the potential addition of new land, especially in Johor, could be a share price catalyst as AME has been anchoring the industrial sector in Iskandar Malaysia. It has a war chest of about RM180 million post-listing of AME REIT.

KUALA LUMPUR (Nov 20): RHB Small Cap Asean Research has maintained its “buy” rating on AME Elite Consortium Bhd at RM1.55 with a higher target price of RM2 (from RM1.82) and said the recent transacted industrial land price of RM120-125 psf indicates that there is an attractive upside to AME Elite’s remaining gross development value (GDV) for its industrial projects in Iskandar Malaysia.

In a note on Monday, the research house said the transacted price also implies that the demand for industrial land remains robust, with the influx of investments supporting a revalued net asset value (RNAV) re-rating — particularly for developers that own strategic landbanks.

RHB said the potential addition of new land, especially in Johor, could be a share price catalyst as AME has been anchoring the industrial sector in Iskandar Malaysia. It has a war chest of about RM180 million post-listing of AME REIT.

“We raise AME’s estimated GDV for all its industrial projects in Johor by 10-12% on average, to reflect the updated market price for industrial land plots.

“We also narrow our discount to RNAV to 20% (from 25%), given the prevailing strong demand for industrial properties, as well as the upcoming catalyst for the Johor-Singapore special economic zone, which is expected to drive industrial activities further.

“Our new TP incorporates a 2% ESG premium, as our ESG score of 3.1 out of 4 for the company is a notch above the country mean,” it said.

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