KUALA LUMPUR: The Employees Provident Fund (EPF) went on a buying spree in SD Guthrie Bhd throughout October, snapping up 24.11 million shares while making just one disposal during the month.
A review of Bursa Malaysia filings showed that the retirement fund made 47 acquisitions between Oct 1 and 30, against a single disposal of 800,400 shares on the first day of the month.
That left EPF with net acquisitions of 23.31 million shares, further expanding its stake in the world’s largest palm oil producer by acreage.
Based on the stock’s October trading range of RM5.64 to RM6.12, EPF may have spent between RM136 million and RM148 million on its purchases, although the actual transaction prices were not disclosed.
At the time of writing, SD Guthrie shares were trading at RM6.01, up eight sen, or 1.35 per cent, giving it a market capitalisation of RM41.56 billion.
Year to date, the stock has gained 36 sen, or 6.37 per cent, from RM5.65, but it remains below its Aug 11 peak of RM6.91.
As at Oct 30, EPF’s combined direct and indirect holdings stood at 1.21 billion shares, giving it a 17.56 per cent stake in SD Guthrie.
This was up from 1.02 billion shares, or 14.76 per cent, on Jan 2, the first trading day of the year.
The increase of 193.65 million shares represented a nearly 19 per cent rise in its holdings, lifting its stake by 2.80 percentage points.
EPF is SD Guthrie’s second-largest shareholder after Permodalan Nasional Bhd, which holds a 49.12 per cent stake, according to MyBursa.
The buying spree comes as SD Guthrie looks to unlock billions of ringgit in value from its vast landbank and reduce its reliance on palm oil earnings.
The plantation group recently struck a RM933.5 million deal to develop 656.8 hectares of land in Bukit Kerayong, Selangor, into an industrial park with YTL Power International Bhd and Bumi Assets Sdn Bhd.
The deal could deliver a one-off gain of RM586.3 million in the first quarter of next year, according to Public Investment Bank Bhd (PublicInvest).
SD Guthrie will also retain a 30 per cent stake in the development, allowing it to participate in future earnings rather than exit the project entirely.
PublicInvest said in an Oct 30 note that the transaction could strengthen the group’s balance sheet, with about 80 per cent of the proceeds earmarked for debt repayment.
The research firm maintained its “Outperform” call on SD Guthrie with a target price of RM7.81.
Meanwhile, CIMB Securities Sdn Bhd sees significant potential for SD Guthrie to unlock further value by improving productivity at its plantations.
In a Nov 3 report, the research firm said increasing oil yields by one tonne per hectare could add RM482 million to annual net profit and potentially unlock RM8 billion in additional equity value.
SD Guthrie is targeting that improvement by 2029 as part of a broader push to deliver stronger returns to shareholders.
The group also wants industrial development to account for a quarter of its earnings within five years, reducing its reliance on fluctuations in palm oil prices.
CIMB Securities maintained its “Buy” call on SD Guthrie with a target price of RM6.52.
It cautioned that higher fertiliser costs, production disruptions linked to El Nino and regulatory uncertainties in Indonesia could weigh on earnings.