KUALA LUMPUR (March 3): Oil palm and milling company Cepatwawasan Group Bhd (KL:CEPAT) is restructuring its renewable energy business to better highlight its value to the market. It is selling a 40% stake in its 12MW Sandakan biomass plant directly under its 69.8%-owned, ASX-listed subsidiary, Timah Resources Ltd.

By “parking” part of the renewable asset under a listed entity, the group aims to make its value more visible to the market while still retaining overall control. The stake is being sold for RM31.61 million on a deferred payment basis, according to a Bursa Malaysia filing.

Cepatwawasan said the group ventured into renewable energy to reduce reliance on the volatile crude palm oil (CPO) market. Although the segment has been profitable, its value is not fully reflected in Cepatwawasan’s share price.

According to AskEdge data, the company is trading at a price-to-earnings ratio of 8.9 times, the lowest among comparable peers and below its recent historical levels. Its price-to-net-asset-value ratio is 0.6 times, lower than most peers but above its recent average.

Under the deal, its wholly-owned unit Cash Nexus (M) Sdn Bhd will sell the 40% stake in Cash Horse (M) Sdn Bhd, the operator of the biomass plant, to Timah. After completion, Cash Nexus will retain 59.87%, while Timah will hold 40%, and another unit, Power Precinct, will own 0.13%.

The RM31.61 million will be treated as a 10-year loan from Timah to Cash Nexus, with interest tied to the Reserve Bank of Australia cash rate. The group expects a pro forma gain of about RM0.65 million based on 2024 audited assets.

Cepatwawasan said Cash Nexus has enough funds for operations and future investments, with the main goal being to unlock the value of its renewable energy business.

The disposal is expected to be completed by the second quarter of 2026. It does not require Cepatwawasan shareholders’ approval but is subject to approval from Timah’s disinterested shareholders.

Cepatwawasan’s earnings per share rose to 8.97 sen for the financial year ended Dec 31, 2025, up from 6.99 sen the previous year. The company posted a net profit of RM27.7 million for the year on higher fresh fruit bunch production and better margins in its oil mill segment, with revenue up 3.6% to RM315.6 million.

Shares of Cepatwawasan rose two sen, or 2.5%, to 82 sen, valuing the company at RM261.13 million. Year-to-date the stock has gone up 14%.