QAF - Strategic review of primary production business to enhance shareholder value
- QAF announced last Friday evening that it is conducting a strategic review of its options to enhance shareholders’ value in relation to the group's primary production business based in Australia. This may include a listing of the business or a sale in its entirety.
- Preparatory work has commenced, while SGX has also confirmed that the proposed listing of the primary production business is not considered a chain listing.
- Note that the strategic review is in its preliminary stages and there is no assurance that the proposed listing or sale may materialise.
- Recall that the group mentioned conducting strategic reviews of this business in its FY16 results. Post FY16 results, we had downgraded the stock from buy to a HOLD with FV estimate of S$1.46, as we see potential cost pressures on profitability in the near term.
- Nonetheless, we remain positive on the company for the longer term, given the formation of an executive committee, meaningful expansion plans, and potential strategic initiatives that are aimed to enhance shareholder value.