约搏单双（www.eth108.vip）_Timely exit for Cahya Mata Sarawak
KUALA LUMPUR: MIDF Research said Cahya Mata Sarawak Bhd (CMS) is making a timely exit from its ferroalloy *** elting business in Sarawak.
Owing to the spike in commodity prices, it said the disposal of its 25% stakes in OM Materials (Sarawak) Sdn Bhd and in OM Materials (Samalaju) Sdn Bhd for a total cash consideration of US$120mil (RM526.6mil)would allow the group to unlock its investments at a higher value.
"The disposal consideration is expected to be at RM526.6mil, after including estimated loans of RM47.3mil to both OM Sarawak and OM Samalaju.
"Excluding the loans, the net disposal consideration is RM479.4mil, which is a RM8.1mil or a 1.7% premium to the valuation of RM471.3mil for both entities," it said.
It added that the potential gain on disposal was RM147.6mil.
On its future plans, CMS is planning to set aside 50% or RM263.3mil of the disposal consideration for working capital, 25% or RM131.7mil for future acquisitions and investments, 20% or RM24.1mil for capex and the remainder for estimates expenses of the disposal.
MIDF said OM Sarawak recorded a net profit of RM116mil in 1QFY22, which contributed a net profit of about 39% to CMS's core earnings.
Previously, it posted a net profit of RM350.9mil in FY21, which contributed about 49% to CMS's core earnings, and was loss-making in FY17, FY19 and FY20.
"As the disposal exercise is expected to be completed by 4QFY22, we are making some adjustments to our FY23 earnings estimates, forecasting a potentially lower contribution from associates.
"We are slashing our core earnings forecast for FY23 and FY24 by -15% to RM185.6mil and RM195.84mil respectively," it said.
MIDF maintained its "buy" call in the stock but revised its target price lower to RM1.37 from RM1.62 previously.