KUALA LUMPUR: Genting Plantations Bhd's land acquisition in Indonesia is expected to increase its net debt and net gearing to RM1.7 billion and 0.32 times, respectively, from RM1.2 billion and 0.22 times previously.
Hong Leong Investment Bank Bhd (HLIB Research) said the company's growth will likely be muted in the near term, as it will take a while before the venture starts contributing to the company's bottomline.
Genting Plantations' indirect subsidiaries had entered into two conditional sale and purchase agreements (SPAs) to acquire two adjacent land parcels (totaling 152 hectares) in Sentul City, Bogor, Indonesia, from PT Sentul City TBK (PTSC) and its related companies for Rp2.05 billion, or RM593 million.
The initial payment of the deposit will be funded through Genting Plantations' internal funds, while the remaining payments will be funded through both internally generated funds and bank borrowings.
Established in 1994, Sentul City is a 3,100 hectare township in the south of Greater Jakarta.
Recent property launches by Sentul City and Citra City Sentul have seen good take up rates of more than 75 per cent within a few months.
"Scheduled to be completed in the first quarter of 2025, the proposed acquisitions provide Genting Plantations' with the opportunity to establish its presence in the Jakarta property market, which may offer other opportunities to further its Indonesian expansion initiative," stated the research firm.
It maintained 'Hold' on the stock with a target price of RM5.80.
As for the new fund offer (NFO), Sports Toto Bhd's NFO segment is likely to normalise in the fourth quarter of 2024 (Q4 2024) after benefiting from seasonally stronger sales in Q3 2024.
The firm maintained an 'overweight' call on the sector.