INVESTMENT HIGHLIGHTS

• JOIN to acquire 30% stake in TYGC (Tasco’s cold chain arm)

• Investment by JOIN to enable TYGC to tap on its large global network

• Interest cost savings from investment proceeds outweigh the impact of lower profit recognition under TYGC

• Maintain FY19 and but revise FY20 earnings upwards

• Upgrade to Trading BUY with adjusted TP of RM1.82 per share

Japanese government fund to acquire 30% equity stake in Tasco’s cold supply chain business. Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development (JOIN) will acquire a 30% stake in Tasco’s wholly owned subsidiary, Tasco Yusen Gold Cold Sdn Bhd (TYGC) for a consideration of RM125.0m. This will be made possible through the enlarged share base of 196.2m shares of TYGC via: (i) the issuance of 135.4m new shares of TYGC to Tasco (in addition to the existing 2.0m shares) pursuant to the capitalisation of shareholders’ advances worth RM69.2m; and (ii) the issuance and allotment of 58.9m new shares for JOIN. As such, Tasco’s equity interest in TYGC will be diluted from 100% to 70%.

Background of JOIN. JOIN specializes in overseas infrastructure investments while facilitating Japanese corporations to participate in the global infrastructure market and promoting Japan’s infrastructure system overseas. JOIN’s recent notable investments made in ASEAN are highlighted below.

Source: MIDF Research - 1 Apr 2019