Gabungan AQRS Bhd (GAQRS) announced that it has called off the RM21.3m land purchase in Ulu Langat, Selangor, as its vendor Goodnite Sdn Bhd failed to remove a fresh caveat lodged by a third party on the land. Goodnite was in breach of its obligations under the sale and purchase agreement to not encumber the property for failing to remove the caveat. (Bursa Malaysia)

Comments: Given the complications involving the deal, we believe it is better that GAQRS call off the deal. There is no impact on our earnings forecasts as we have not factored in any earnings contribution from this project in our forecasts. The proposed project involves building about 30 units of gated and guarded semi-detached factory units at a gross development value of RM80m and expected gross profit of RM19m. We reiterate our BUY call on GAQRS with RM1.14 target price, based on FY16E PER of 10x.

Source: Affin Hwang Capital Research - 4 Sep 2015