KUALA LUMPUR (Oct 28): Amid a season of heightened sector mergers and acquisitions (M&As), Sarawak Oil Palms Bhd (KL:SOP) and Hap Seng Plantations Holdings Bhd (KL:HSPLANT) are prime candidates for privatisation due to their compelling valuations and strong cash positions, according to Maybank Investment Bank (Maybank IB).

The research firm said these selected small- and mid-cap companies are under-appreciated on an enterprise value/hectare (EV/ha) basis, trading at between 37%-49% discount to the average transacted physical prices.

"We opine SOP and HSPLANT are prime candidates as any privatisation exercises at present market caps can be self-funded by their high net cash holdings".

Notably, it said Sarawak Oil Palms trades at just RM25,001 EV per planted ha, 0.76 times book value, seven times FY2026 price-to-earnings ratio (PER), and has a net cash of RM1.41/share. 

"As for HSPLANT (not rated), it trades at an attractive RM32,556 EV/planted ha, PBV of 0.82 times, 11.6 times FY2026 consensus PER, and has a net cash of 74 sen/share".

For another under-appreciated stock, it added, Chin Teck Plantations BHd (KL:CHINTEK) comes to light with its low implied EV of RM26,387/ha, while trading at 0.96x PBV, 9x historical PER, and has high net cash of 527sen/share.

"Buoyed by high crude palm oil (CPO) prices, M&A activities picked up momentum in 2025 with RM2 billion value transacted thus far. We believe the M&A activities will be sustained into 2026, in part fuelled by monetisation of prime estates by companies such as SD Guthrie Bhd (KL:SDG), Genting Plantations Bhd (KL:GENP) and Kuala Lumpur Kepong Bhd (KL:KLK)," said the house in a research note on Tuesday.

The privatisation and delisting of FGV, the house said, helped lift the year’s total M&A value to RM2.06 billion. 

This deal, alongside notable transactions like SD Guthrie’s land sale for RM1.6 million per hectare, reveals a market deeply reassessing the value of dirt and trees. Yet, while physical land commands premium prices, a stark anomaly has emerged in the equity market, itadded.

Maybank IB said the motivations for this M&A wave included no deforestation, no peat and no exploitation (NDPE) commitments that are shifting focus to brownfield land.

Other than that, it said companies are unlocking legacy value, and rising costs are pushing the industry towards consolidation. 

In this environment, a general under-appreciation of certain planters has created a glaring opportunity, added Maybank IB.