| Publish date: Tue, 25 Jun 2013, 12:43 PM |
HwangDBS Vickers Research has reiterated a 'buy' for TA Enterprise (TAE) based on a revised Sum Of Parts (SOP) of RM1.00
The revised SOP now factors in a higher 1.0 Price/Book Value (P/BV) for its broking business and higher capital values for its property business, HwangDBS Vickers said in a statement.
"A major catalyst for TA Global, a subsidiary of TAE, will be an
establishment of a hospitality REIT which will have at least an asset size of RM2 billion based on our SOP.
"The unlocking of deep latent value of largely prime overseas assets where one new hotel even has Donald Trump as an operator will lift TA Global's SOP and in turn TAE's," the research house said.
It owns 7 acres (2.8 ha.) of very valuable land in key growth areas in the Klang Valley as well as overseas in Canada.
Property development earnings, according to the research house, have picked up.
TAE is the only stand-alone broker left in Malaysia with a strong retail presence of 5.7 per cent market share (trading volume).
"Consolidation among brokers had been apparent with increased competition where valuation benchmarks have been set at between 1.1 to 1.9 times Book Value.
"In our view, the founding shareholders may warm up to a cash offer of at least one times P/BV or RM687 million (broking and credit and lending business)," HwangDBS Vickers said.
At 11.01am, TAE was unchanged at 56 sen with 1.094 million shares traded.-- Bernama
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