KUALA LUMPUR (Aug 12): Shares in MMC Corp Bhd fell as much as nine sen or 4.84% in the morning trading session to its six-year low today.

The share price fall came despite the diversified group announcing its three land disposal deals in Johor yesterday, from which it expects to net some RM153.5 million or five sen per share.

It had earlier fallen to a low of RM1.77 before erasing part of its losses to trade at RM1.78 as at midday break, still slid eight sen or 4.3%.

Some 538,000 shares changed hands between RM1.77 and RM1.85 today. It has a market capitalisation of RM5.57 billion.

Yesterday, MMC Corp said its unit Senai Airport City Sdn Bhd is disposing of three pieces of lands measuring 188.7 acres in Senai to I-Park Sdn Bhd, a member of US-based AME Group for RM369.97 million cash.

The disposal price, the group said, is more than double its purchase price of RM140.5 million back in 2009.

According to its filing with Bursa Malaysia, the total book value of the tract amounted to RM170.17 million in MMC Corp's financial accounts as at Dec 31, 2014.

Its latest interim financial report as at March 31, 2015 (1QFY15) showed that the group has a total borrowing of RM7.25 billion, comprising RM6.3 billion of non-current liabilities and RM950.44 million of current liabilities.

Its deposits, bank and cash balances stand at RM941.45 million, decreased significantly by 81.32% from RM5.04 billion in March 31, 2014.

Thus, it should be in a net debt position of RM6.23 billion.

Commenting on the deal, Affin Hwang Capital Research said they are mildly positive on this development, as the proposed land disposals will help to pare down the MMC Corp's overall gearing.

"We estimate the proposed land disposal translates to RM45 per sq ft (psf), which is comparable to the RM50 psf pricing when Hershey bought 41 acres in Senai Airport City back in 2013," it added.

It added based on the new pricing benchmark set by the transaction with I-Park, the Senai Airport City land may be worth RM5 billion.

Affin made no changes to its forecast. It is maintaining a "buy" rating on MMC Corp (fundamental: 0.4; valuation: 2) with a target price of RM3.15.

For 1QFY15, MMC Corp net profit soared four-fold or 306% to RM95.75 million or 3.14 sen per share, from RM23.57 million or 0.77 sen per share a year ago, on better contributions from its newly-relisted unit Malakoff Corp Bhd and its port operations.

Its revenue for the quarter under review was at RM1.98 billion, up 6.64% from RM1.86 billion a year ago, its filing with Bursa Malaysia today showed.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)