Kuala Lumpur: Wasco Bhd’s stock gained on Monday despite a broader market decline, as investors welcomed news of a planned stock market listing for its bioenergy unit, Wasco Greenergy Bhd, reports The Edge Malaysia.
The move is seen as a way to unlock value for shareholders. Kenanga Investment Bank upgraded its rating on the stock from ‘market perform’ to ‘outperform’, noting that Wasco Greenergy’s closest peer, BM Greentech Bhd, trades at much higher valuations.
“We view this exercise positively as it unlocks value for Wasco’s shareholders,” Kenanga said in a note.
Wasco’s shares rose by two sen to 97 sen, boosted further by gains in the energy sector amid tensions in the Middle East. Following Kenanga’s upgrade, the stock now has four ‘buy’ and two ‘hold’ recommendations. The consensus target price has increased to RM1.33, suggesting a possible 39% gain over the next year.
Analysts highlight that Wasco is trading at a much lower earnings multiple compared to BM Greentech, which is valued at over 20 times its trailing earnings.
Post-listing, Wasco is expected to retain a 62.5% stake in Wasco Greenergy, potentially worth RM313 million—more than 40% of Wasco’s current market value, according to Hong Leong Investment Bank.
Funds raised through the IPO will support expansion in biomass steam power projects, operations in Indonesia, capital investments, digital upgrades, and R&D.
RHB Research called the spin-off a “strategically sound” move, saying it would strengthen Greenergy’s capital position and support long-term growth.
