Naim Holdings seeing sustained upward movement, room to trend higher

Naim Holdings Bhd showed an upward trend between mid-January and mid-July. The Sarawak-based property developer is disposing of a parcel of land in Samarahan, Sarawak to Onlyee Flora Sdn Bhd for RM223.38 million.

Naim Holdings said the disposal is part of its commitment to ensure long-term sustainability in its business operations in a tight property market dominated by substantial unsold properties. The 180.8-hectare mixed-zone vacant land is owned by Naim’s wholly-owned subsidiary, Naim Land Sdn Bhd. The transaction price represents a 4% premium over the current market value of RM215 million.

Onlyee Flora is primarily engaged in holding companies and growing of oil palm estate, with its base in Kuching, Sarawak. Proceeds from the sale will be used to partially repay existing bank borrowings of about RM67.5 million while RM155.88 million will be allocated for working capital purposes amongst others. The disposal is expected to positively impact Naim group’s earnings and earnings per share for the year ending December 2025.

For the second quarter ended June 30, the company posted a huge jump to RM46.3 million from RM12.6 million a year ago. This was despite a decrease in revenue to RM36.3 million in 2QFY24 from RM86.9 million a year ago mainly due to lower property sales secured as well as lower work progress achieved at project sites. The company recorded improved segment profit of about RM4.7 million in 2QFY24 from a loss of RM2.9 million, thanks to its core businesses, mainly from some cost savings reported from certain completed projects.

It also saw improved performance from its major associates, Dayang Enterprise Holdings Bhd. and its subsidiary, Perdana Petroleum Bhd. The share of net results (after tax) of Dayang had increased substantially, from RM10.5 million in June 2023 to a profit of RM40 million during the current period under review.
Investors should look at Naim for its exposure to the strong prospective businesses via Dayang and Perdana.

In addition, property development segment should also celebrate better results in the subsequent months.