PETALING JAYA (Oct 18): Interest in Tradewinds (M) Bhd's (TWS) stocks has been on an upward trajectory lately, driven by the fact that the counter is undervalued and the possibility of consolidation among the group's listed entities.
According to a senior stockbroker who has been tracking the counter for a long time, TWS is a good performing company, especially since it acquired Robert Kuok's sugar refinery several years back.
"I have been monitoring the stock for a while, and what I can say is the stock is undervalued, despite making decent and sustainable profits every year," the stockbroker told theedgemalaysia.com.
Since slumping to RM6.32 per share on Oct 11, which was the lowest price for TWS for at least two years, the share price has increased by approximately 12% to today's RM7.08 per share.
But that is still RM1.00 or 12.4% lower than TWS's net asset per share of RM8.08 as at June 30, 2012.
During the first six months of the year, TWS earned RM142.8 million in net profit, which was about 54% lower than the RM309 million recorded during the same period last year.
There are also talks among stock brokers that TWS might be consolidated with other listed companies under the Tradewinds group. Other listed entities of the Tradewinds Group are Tradewinds Corporation Bhd and Tradewinds Plantations Bhd.
Tradewinds Corp is in the process of being privatised by its major shareholders Perspective Lane (M) Sdn Bhd, Kelana Ventures Sdn Bhd and Seaport Terminal (Johore) Sdn Bhd.
Another stockbroker said there are rumours saying that tycoon Tan Sri Syed Mokhtar Al-Bukhary, who is the ultimate shareholder of the Tradewinds group, is emulating the strategy taken by tycoon T Ananda Krishnan.
The stockbroker said Syed Mokhtar will privatise Tradewinds's listed entities one by one, before consolidating their assets and businesses, and later relisting them to get a higher valuation.
"I believe there are big plans by Syed Mokhtar for the entire Tradewinds group companies," he said, adding that Tradewinds Corp has large land assets in Johor to be developed.
Tradewinds Corp recently announced the redevelopment plan of the Crowne Plaza Mutiara Hotel and Kompleks Antarabangsa for a RM6 billion mixed development project there.
The redevelopment project will also include TWS, as it is the owner of the Kompleks Antarabangsa building.
The proposed redevelopment will see Tradewinds Corp pays RM510 million to TWS, which will increase the latter's cash pile to more than RM1 billion.