• TSH Resources has proposed a secondary listing and quotation of all its shares on the Main Board of the Singapore Exchange Securities Trading (SGX).

• Bursa Malaysia will remain as the primary stock exchange on which the shares are traded.

• TSH said that the secondary listing in Singapore would expand and diversify its shareholder base. It would also provide an additional venue for fund-raising via the capital markets in the country. In addition, it would strengthen the company’s presence, which may attract wider research coverage from brokers in Singapore and hence, attention from international funds.

• The proposal is expected to be completed in 3QFY23.

• We are neutral on the secondary listing in Singapore. Plantation companies in Singapore trade at lower PE multiples compared to their Malaysian counterparts.

• According to Bloomberg, planters in Singapore are currently trading at FY24F PEs of 7x to 9x. In comparison, TSH’s FY24F PE is 14x.

• First Resources and Bumitama Agri’s FY24F PEs are 8x each. Wilmar International, which is one of the largest agri-companies in Asia, is presently trading at a FY24F PE of 9x.

• We maintain HOLD on TSH Resources with a fair value of RM1.05/share. Our fair value of RM1.05/share is based on a FY24F PE of 15x, which is the 5-year mean for small planters. TSH is currently trading at a FY24F PE of 14x, which is higher than its 2-year average of 12x.

Source: AmInvest Research - 24 Jul 2023