Shares of Wasco Bhd advanced on Monday, defying the broader market downtrend, as investors responded positively to the company’s proposed spin-off listing of its bioenergy subsidiary, Wasco Greenergy Bhd.
The planned listing of Greenergy, which operates in biomass and steam energy, has prompted optimism among analysts and investors, positioning it as a potential value-unlocking move. Kenanga Investment Bank upgraded its rating on Wasco from ‘market perform’ to ‘outperform’, citing the valuation gap between Wasco and its closest peer, BM Greentech Bhd. The latter, a biomass boiler manufacturer, currently trades at over 20 times its trailing earnings, in contrast to Wasco’s single-digit earnings multiple.
“We view this exercise positively as it unlocks value for Wasco’s shareholders,” Kenanga noted in its client update. The firm also highlighted upside potential as investors re-rate Wasco’s valuation in line with green energy peers.
Wasco shares rose by as much as two sen to 97 sen during Monday trading, buoyed in part by broad gains across the energy sector amid heightened geopolitical tensions in the Middle East. The stock has now attracted four ‘buy’ ratings and two ‘hold’ recommendations, following Kenanga’s upgrade. The consensus target price has climbed to RM1.33, according to Bloomberg data, implying an upside of up to 39% from the current share price.
Analysts at Hong Leong Investment Bank estimate that a 62.5% controlling stake in Wasco Greenergy post-listing could be worth approximately RM313 million—representing over 40% of Wasco’s existing market capitalisation.
Funds raised from the initial public offering are expected to fuel Greenergy’s expansion plans, including investment in biomass steam power plants, capital expenditure, operations in Indonesia, digitalisation, and research and development.
RHB Research described the move as “strategically sound”, underlining that successful execution and pricing will be crucial to realising its full market potential. “The listing is expected to enhance Greenergy’s capital position and support long-term growth,” the firm said.
-The Edge
