Harimau Capital

By Ooi Tee Ching
bt@nstp.com.my
July 2 2007

RIMBUNAN Hijau, controlled by tycoon Tan Sri Tiong Hiew King, is said to be looking to merge all its oil palm estates and forest assets around the world under one entity and list it on the Hong Kong stock exchange.
Market talk indicates that the move is prompted by the better valuation rival timber concessionaire Samling Global Ltd had experienced in the last four months, following its listing in Hong Kong in March this year.
Samling Global's offer price on March 6 was HK$2.08 (RM0.92) and last Friday it closed at HK$3.03 (RM1.34), a 46 per cent increase.
Bloomberg estimates show that there are six analysts in Hong Kong rating Samling Global's shares, with five recommending buy calls and the remaining one maintaining a neutral outlook.
In comparison, the Samling group's Bursa Malaysia-listed subsidiary Lingui Developments Bhd has one research house rating its stock.
Rimbunan Hijau's Malaysian-listed subsidiaries Jaya Tiasa Holdings Bhd and Subur Tiasa Holdings Bhd have also faired mediocrely, with two analysts covering Jaya Tiasa stock, while Subur Tiasa was last rated by a research house in 2005.
Also, since Rimbunan Sawit Bhd's debut on Bursa Malaysia in June last year, there is no formal coverage from any research houses.
"If Tiong were to group all his oil palm and timber assets under an umbrella company, it could surpass Samling Global in market value," a source said.
"Assuming that investors in Hong Kong dictate the pricing, it is likely that a merger of Jaya Tiasa, Subur Tiasa and Rimbunan Sawit could see a higher valuation. This is because fund managers see value generated into Rimbunan Hijau's group of companies from high timber and oil palm prices in the global market," the source added.
When approached by Business Times last Wednesday, Jaya Tiasa director Sandra Wong did not deny talk of Rimbunan Hijau mulling a global offering on the Hong Kong stock exchange.
She also confirmed that the group has considered grouping all its oil palm estates and timber concessions into one entity and listing it in Hong Kong "but for now, there is no decision".
She said a decision will be reached by the end of the year.
The Rimbunan Hijau group, established in 1975, is reputed to hold the largest timber concession in Malaysia spanning some 800,000ha.
The group also has large timber concessions in Papua New Guinea, Africa and Russia, among others.
Talk concerning the merger of its oil palm and forest assets started in January this year, when Tiong first announced his plans to merge all his publishing companies under Ming Pao Enterprise Corp Ltd, a media group listed in Hong Kong.
Last week, Ming Pao said its shareholders had approved the group's acquisition of Malaysia's Sin Chew Media Corp Bhd and Nanyang Press Holdings Bhd via share swaps amounting to HK$2.68 billion (RM1.18 billion).
Shareholders of Sin Chew and Nanyang are called to exchange their shares valued at RM4 and RM4.20 respectively for new Ming Pao shares valued at HK$2.70 (RM1.19) each.
Upon completion of the merger, Ming Pao will assume the listing status of Sin Chew on Bursa Malaysia, while Sin Chew and Nanyang will be delisted.