KUALA LUMPUR: HwangDBS Vickers Research raised Multi-Purpose Holdings Bhd’s (MPHB) target price to RM4.20 per share from RM3.85 previously, citing attractive valuations after the demerger of the company’s gaming and non-gaming businesses.
“Excluding non-gaming businesses, MPHB’s numbers forecast operator (NFO) business is only trading at 8.9 times 2013 forward price-to-earnings ratio (PER) versus Berjaya Sports Toto Bhd ‘s 13.5 times,” the research house said in a note today.
HwangDBS said transferring Berjaya Sports Toto’s gaming operations to a business trust to be listed in Singapore may see investors switching to the only listed direct NFO player left in Malaysia – MPHB – which may even command a scarcity premium.
MPHB recently announced plans to transfer its non-gaming business that spans from insurance to property development into an entity to be offered for sale to MPHB’s shareholders, leaving the company as a pure gaming company.
By 1033am (0233 GMT), the counter shed 0.29% to RM3.46 per share, underperforming the broader index’s 0.06% rise.
TA raises SP Setia target price
KUALA LUMPUR: TA Securities raised its target price for property developer SP Setia Bhd to RM4.60 from RM4.45 after taking into account the property developer’s share of project from the development of Battersea Power Station site in London.
SP Setia and Sime Darby announced yesterday they will each have a 40% stake of the recently acquired Battersea Project Holding Company Ltd with Malaysia’s Employees Provident Fund taking the remaining.
“We like this development which comes with planning permission that allows immediate launch of project,” the research house said in a note today.
“Most importantly, we understand from management that this development will have no significant impact on SP Setia’s operations in Malaysia and the emerging markets in term of new property launch and landbanking exercise,” it added.
TA maintained “buy” on the counter. By 1030am (0230 GMT), shares in SP Setia climbed 0.81% to RM3.73, outperforming the broader market’s 0.07% rise.
Public Investment starts IHH Heathcare at RM2.98
KUALA LUMPUR: Public Investment Research started world’s second largest healthcare company IHH Healthcare Bhd with a fair value of RM2.98 ringgit per share, some 4.6% higher than its IPO price of RM2.85.
“Although we expect to see sustained trading interest in the stock in the short term, there is limited upside for IHH’s fair value, with significant downside risk should the company fail to deliver the expected results,” Public Investment said in a note.
The research house said high expectations of IHH’s future growth have been reflected in its offer price, making it one of the most expensive healthcare stocks in the world.
Public Investment said it was cautious on IHH’s plans to synergise its operations across Malaysia and Singapore to Turkey due to the massive size and complexity of the group. Also, healthcare costs are very specific to these countries.
Reuters reported yesterday that IHH’s global institutional offer, which makes up 6% of its US$2 billion initial share sale has been oversubscribed nearly 60 times at the higher end of the bookbuilding range between RM2.67 and RM2.85 per share.
MIDF raises call on MMHE to ‘buy’
MIDF Research upgraded Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) to “buy” with a higher target price of RM5.97 ringgit per share on potential projects wins for the rest of this year.
“We are confident that the second half of 2012 would be a more invigorating part of the year for the (oil and gas service engineering) firm with about RM1.5 billion to RM2 billion worth of potential works to be won,” the research house said in a note today.
MMHE has already secured around RM2.1 billion to RM2.4 billion worth of jobs, according to MIDF.
“Management noted that moving forward, MMHE will continue to stay true to its fabrication business roots,” said the research house.
“They did not discount the fact that they are always on the lookout for potential mergers and acquisitions but it will be synergistic and not to diversify its business,” it added.
By 0947am (0148 GMT), the counter was flat at RM5.30 per share, underperforming the Malaysia’s benchmark stock index’s 0.18% rise.
Maybank ups rubber gloves sector to ‘overweight’
KUALA LUMPUR: Maybank IB Research raised its recommendation for the rubber gloves sector from “neutral” to “overweight” citing the sector as an affordable healthcare option with falling input costs and growing demand.
Maybank upgraded Hartalega Holdings Bhd to “buy” and maintained “buy” calls on Top Glove Corporation Bhd and Kossan Rubber Industries Bhd.
The research house said in a note today that the price of latex has fallen by 17% from a high in February 2012 to RM6.50 per kilogram.
Thailand, Indonesia, and Malaysia government initiatives have limited rubber exports to support latex price despite a surplus in the region that will ultimately bring the price lower, said Maybank.
The International Rubber Study Group predicted in March 2012 that a prolonged rubber surplus will occur until 2020, placing further pressure on rubber prices.
By 0940am (0140 GMT), shares in Hartalega rose 0.23% to RM4.29 ringgit, Top Glove climbed 0.19% to RM5.20 and Kossan Rubber jumped 0.96% to RM3.17. The Malaysian benchmark stock index rose 0.05%.