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Author: dollardollarbill   |   Latest post: Thu, 26 Nov 2020, 12:07 AM

 

Sunway Bhd (5211) – Healthcare re-rating [$$bill]

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Sunway Bhd (5211) – Healthcare re-rating

 

Sunway could see some upside if research houses start raising the valuation of its healthcare business.

 

Bloomberg reported today that Sunway is looking to sell a 20-25% stake in its healthcare unit that could fetch at least USD250 mil.

 

That means:

If a 20% stake is worth USD250 mil, 100% stake is worth USD1.25 bil.

If a 25% stake is worth USD250 mil, 100% stake is worth USD1 bil.

 

USD1 bil is about RM4.15 bil.

 

That is much higher than the valuations given by some research houses, such as:

 

Kenanga IB: RM1,788 mil

Hong Leong IB: RM1,734 mil

Affin Hwang IB: RM1,800 mil

UOB Kay Hian: RM1,250 mil

 

(See pics at bottom)

 

Among the four above, Affin Hwang gave the highest valuation of RM1.8 bil.

 

However, using that USD1 bil (RM4.15 bil) valuation, that’s still a surplus of RM2.35 bil or 42 sen per share (based on fully diluted no. of shares).

 

42 sen is equivalent to 30% of Sunway’s share price of RM1.40.

 

The research houses are valuing using the price-to-earnings method. If valued based on the number of hospital beds, Sunway’s heathcare business should fetch a higher valuation (read: https://www.theedgemarkets.com/article/unlocking-value-healthcare-business)

 

From research reports dated 26 Aug 2020:

 

 

 

 

 

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