Doubling of land bank to ~86,400 ha. THP is proposing to acquire two companies from its parent Lembaga Tabung Haji (LTH) that collectively own 41,424ha of land. The purchase price of MYR535.6m is to be paid via 209.23m new THP shares to LTH (+40.4% of existing share base). At 16x FY11 PER, the acquisition will dilute EPS by 8.2%. However, this may be offset by a re-rating, as THP doubles in size and has a stronger balance sheet for future growth. We maintain our HOLD call on THP for now with an unchanged TP of MYR2.45 on 11x FY13 PER.

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Source: Maybank Research - 25 July 2012