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Hot stock: Wing Tai trading halt fuels speculation on privatisation of Malaysia counterpart
WING Tai Holdings and its Malaysian counterpart, Wing Tai Malaysia Berhad, halted trading in their shares on Tuesday, prompting some analysts to speculate that the Singapore-listed property group was poised to privatise its Malaysia counterpart.
UOB Kay Hian's analysts believe a potential corporate action could take place, and are not ruling the potential privatisation of Wing Tai Malalysia.
Cheng Wai Keung, the chairman and managing director of the Singapore-listed property firm, has a deemed interest of 66.2 per cent as of September 2016 in Wing Tai Malaysia.
"We do not rule out the prospects of Mr Cheng making a general offer for the remaining Wing Tai Malaysia shares before a potential consolidation into Wing Tai Holdings,'' analysts Vikrant Pandey and Derek Chang said in a note.
Wing Tai Malaysia is involved in property development and fashion retail. Its property developments are mainly in Kuala Lumpur and Penang, while its fashion business portfolio includes brands like Topshop, Dorothy Perkins and Miss Selfridge. It also owns a 45 per cent stake in a joint venture (JV) with Japan's Fast Retailing Co Ltd. The JV operates Uniqlo outlets in Malaysia.
UOB Kay Hian has a buy recommendation on Singapore-listed Wing Tai, with a target price of S$2.54 a share.
"A consolidation of Wing Tai Malaysia could prompt an upward re-rating of our revalued net asset value (RNAV) and our target price,'' its analysts said.
In Singapore, Wing Tai traded at between S$1.845 and S$1.830 on Monday, before it closed at S$1.845.
In Malaysia, Wing Tai settled at RM1.18, up one sen, or 0.85 per cent on Monday.