Record-high land transaction to spur AME Elite
PETALING JAYA: AME Elite Consortium Bhd is expected to see a boost to its bottom line in the financial year ending March 31, 2025 (FY25), after netting a gain of RM85.1mil in a land deal in Johor.

Analysts are positive on AME’s disposal of a total of 34.91 acres of industrial land at an average selling price (ASP) of RM138 per sq ft (psf), signifying another record high price in Nusajaya, Johor.

The company sold the 11 plots of industrial land to Quantum DC (HK) Ltd, a data centre operator, for RM209.8mil, marking AME’s first deal in the data centre segment.

The proceeds from the sale will be channelled to fund AME’s ongoing i-TechValley development and future property development activities.

RHB Research maintained a “buy” call on the counter with a higher target price of RM2.15 from RM2.05 previously.

“We continue to like AME as a key industrial play in Iskandar Malaysia. The RM85.1mil net gain should boost FY25 earnings, providing upside to dividend per share (DPS) while upcoming land acquisition will be a key re-rating catalyst.

“Given the robust demand for industrial land and development in Iskandar Malaysia, we now value AME based on a 15% discount to revised net asset value from 20%.”

The research house has raised its FY25 DPS to eight sen based on the new profit forecast and a dividend payout of about 30%.

It added that the ASP of RM138 psf was considered a record high as the disposal is on a “as is where is” basis compared with RM85-RM90 psf to a manufacturer.

“Recall, Crescendo Corp Bhd sold some parcels of land in Nusa Cemerlang Industrial Park to data centre users/operators at RM120-RM125 psf in November last year,” RHB Research pointed out.

It added that the company is currently in negotiation for some land acquisitions.

“If strategic land deals materialise, this should be the next re-rating catalyst for the stock, given the potential upside to our revised net asset value estimate. New land addition is crucial as AME is depleting its land bank in Iskandar Malaysia, given the strong deal momentum.

“With the upcoming detailed announcement of the Johor-Singapore Special Economic Zone, we think the demand for industrial land and developments would be even stronger due to higher foreign and domestic direct investments,” the research house said.

Similarly, Phillip Capital Research has reiterated its “buy” recommendation on the stock but made no changes to its earnings forecasts, pending the upcoming fourth quarter results, which is slated to be released on May 30.

“We expect the proposed land sale to strengthen its balance sheet for potential future land acquisitions in Johor, Penang and the Klang Valley to capture the strong demand for industrial properties.

“We like AME for its sole focus on industrial properties, which offers a unique exposure to capture the ongoing inflow of foreign direct investments,” it said.
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AME Elite Consortium Bhd is expected to see a boost to its bottom line in the financial year ending March 31, 2025 (FY25), after netting a gain of RM85.1mil in a land deal in Johor.