KUALA LUMPUR (Feb 5): TA Securities said Ann Joo Resources Bhd’s (KL:ANNJOO) recent acquisition of an undervalued industrial land in Kedah could unlock significant intrinsic value for the group.  

In a note on Wednesday, the research house said it believes the purchase will lead to better asset utilisation, enhanced profitability, and higher returns on equity. 

This also aligns with Ann Joo's long-term strategy of diversifying into property development and industrial property investments. 

Furthermore, the acquisition complements Ann Joo’s broader goal of streamlining operations and optimising decision-making processes.   

The deal will enable the company to capitalise on growth opportunities arising from the industrialisation of northern Peninsular Malaysia.   

The influx of large-scale investments into Gurun Industrial Park in Kedah, particularly from leading companies in the semiconductor, electrical and electronics, and automotive sectors, further bolsters the region’s industrial prospects. 

Ann Joo’s move to expand its portfolio and diversify into property development could position the company to capture rising demand in an industrial hub like Gurun, which continues to attract significant investments.   

Ann Joo's Gurun land acquisition, valued at RM96 million, will see the company acquiring the remaining 45% equity interest in Konsortia Etiqa Sdn Bhd (KESB), the owner of 437 acres of industrial land in Kedah.   

The research house perceives this land as undervalued, especially when compared to other industrial lands, which typically fall within the price range of RM25 to RM40 per square foot, it said. 

The transaction is being carried out through Ann Joo's wholly owned subsidiary, Ann Joo Management Services Sdn Bhd (AJMS), from KESB director Datuk Ong Tee Thong.  

Upon completion, AJMS will hold a 96% stake in KESB, with the remaining 4% retained by Ann Joo Steel Bhd, another subsidiary of the company.  

TA Securities maintained a “hold” call on the stock, with an unchanged target price of RM0.89.  

At the time of writing on Wednesday, Ann Joo shares were up one sen or 1.2% at 81.5 sen, valuing the company at RM574.3 million.  

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Ann Joo acquires remaining 45% stake in industrial land firm