Pinehill Pacific Bhd (Rm 0.44)

Pinepac suspended its trading yesterday pending announcement. It resumed trading at 2.30pm today with its price traded at limit-up price of 44 sens, up 30 sens from its last traded price of 14 sens.

It announced a proposal to dispose 8,999.13 acres of plantation land in Hilir Perak to United Plantation Bhd for a total cash consideration of Rm413,574,302.49.

Lets look at its liabilities

Total liabilities is Rm287,931,000.00. After paying off all its liabilities Pipepac still has a net cash of Rm123 millions. Divided by its total number of shares of 150 million, its net cash per share is Rm0.82.

Its book value for this 8,999.13 acres is about Rm254 million. The surplus over its book value is Rm159 million that is about Rm1.06 a shares. Its net assets per share will increase from its current Rm0.60 to Rm1.66.

Very likely Pinepac will announce a special dividend for its shareholders after completing the deal.

After selling off its 8,999.13 acres of land in Hilir Perak, Pinepac has no more plantation in Malaysia but it still has 51,400 acres of leasehold (60-year lease) land in Indonesia with book vale of Rm21,784,000.00 (about one sen per sq. ft.).

Out of its 51,400 acres of land in Indonesia, only 22,192 acres are planted with oil palm. By 2017 the matured oil palm area has reached 22,100 acres.

After selling off all its plantation in Malaysia, will Pinepac sell off its Indonesia plantation?

How much dividend will it reward its shareholders?

How high can the share price move up?

Your guess is as good as mine. But one thing is very likely, the price surge today marked the starting of a new cycle for its stock price.

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