Align Research has made a buy recommendation of up to 30.52 GBp for the shares of forestry group Obtala Ltd on the grounds that they are currently undervalued, according to a report issued this week.
Obtala Ltd is a group based in the UK island of Guernsey that has agricultural and forestry assets in Tanzania and Mozambique and aims to become one of East Africa’s largest producers of food and wood products.
Align Research wrote that since the appointment of the new board of directors in April 2016, the group has redefined its strategy, focusing on agricultural and forestry assets, and has raised 18.3 million pounds to expand these two business areas.
In Mozambique the group controls a 58% stake in Argento Mozambique, which has 312,465 hectares of 50-year forestry concessions, and the funds raised with a recent issue of shares will allow the rapid expansion of the business.
In Tanzania, the group controls 1,735 hectares of agricultural land under two long-term tenancy agreements, in which US$10 million has already been invested in land preparation, infrastructure construction and initial sowing.
Align Research’s buy recommendation is based on the fact that the group’s shares are currently trading at 18 GBp, which is little more than the implied value of the company’s stake in Argento Mozambique. (macauhub)