BIMB
BIMB WA...Speculative Upside Play Upon Releasing Value From BIMB Corporate Exercise
Look at the view from HLB :
BIMB is undertaking a group restructuring exercise through a series of moves: (i) raise RM800m via placement to pare down its outstanding sukuk (held by Lembaga Tabung Haji) and retire existing warrants (at 26sen/unit), (ii) cash disposal of BIMB Securities and Syarikat Al Ijarah to Bank Islam (priced at net assets, amounting to RM115m), (iii) distributing the stake in Bank Islam and Syarikat Takaful to investors, and (iv) transfer listing status to Bank Islam. The entire exercise is expected to complete in 3Q20.
*HLIB’s view:* Finally unveiled its corporate restructuring exercise and the architecture is similar to prior market speculation. This is positive as it helps to unlock value. Assuming a VWAP of RM4.30/share and placement is done at a 5% discount (this cannot be more than 10%), share base will be enlarged by 11%. We estimated that investors will be entitled to 1.28 of Bank Islam and 0.25 Syarikat Takaful shares for every 1 BIMB share held (w/o the placement exercise it would be higher at 1.42 and 0.28 respectively).
*Forecast:* Unchanged.
*Recommendation:* Retain BUY and GGM-TP of RM5.00, based on 1.42x 2020 P/B. This is largely in line to its 5-year mean of 1.45x but ahead of the sector’s 1.00x. The premium is fair given its 4ppt above-average ROE generation. Also, from our reverse SOP assessment, we calculated the market is only valuing Bank Islam (100%-owned) at 0.83x P/B with 10-11% ROE vs. peers at 1.00x P/B with 10% ROE, implying there is upside from current levels.
1 BIMB gets 1.25 Bank Islam plus 0.25 Takaful...0.25 Takaful equal to 1.5k...equal to approx 5.8 future value of BIMB...BIMB Wa exer price at 4.72...current price is 0.245 vs company offer to buy back at 0.26 cash (zero risk)..what do you think the upside of BIMB Wa?
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CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
GLNT
There's nothing to play anymore on BIMB-WA except you collect it at MYR0.235 and get 10% return in less than a year. That easy. No need to calculate value anymore.
2019-12-12 09:27