On 27th September Harn Len announced the disposal of 2,409.8 hectares of its oil palm plantation that has a book value of Rm 28 millions (11 sen psf) for about Rm 184.6 millions (71 sen psf). The surplus is Rm 156.6 millions or 85 sen per share. (Harn Len has 185 million shares)
On the following two trading days, its share price jumped from Rm 0.78 to an intraday high of Rm 1.32 before closing at Rm 1.10. Since then its share price has been moving side way at around Rm 1.05.
The proposed land sale has revealed the extremely low book value of Harn Len's plantation land. Besides the 2,409.8 hectares mentioned, Harn Len has another 10,160 hectares of plantation valued at Rm 114 million or 10.4 sen psf. If a value of 71 sen psf is applied to its 10,160 hectares, the value is Rm 778 million. The surplus is Rm 664 million or Rm 3.58 per share.
By adding 85 sen and Rm 3.58 to its current net assets per share of Rm 1.32, the possible net assets per share is Rm 5.75. Its share price was around Rm 0.75 before the announcement, that was why its share price jumped following its announcement.
From its 10-year chart, it is possible that after setting its historical low in 2009, it has completed its major wave 1 and 2 by early September 2013. It is possible that its major wave 3 has started and so far it has formed its sub-wave i, ii, iii and iv. Harn Len gained 2 sens today, is that the starting of its sub-wave v of its wave (i) ?
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