Journey to Wealth
MPHB - Injecting non-gaming assets for RM905.3mil
- Multi-Purpose Holdings Bhd has proposed to inject its property and insurance assets into MPHB Capital for RM905.3mil. Including the assumption of debts, MPHB Capital's cost of acquiring MPHB's non-gaming assets would come up to RM982.9mil.
- In the corporate exercise, MPHB's property assets are valued at RM512.5mil while the insurance assets are valued at RM392.8mil.
- In our RNAV calculation for MPHB, we have assumed the value of the property assets at RM429.2mil based on the division's net assets. We have also assumed a value of RM341mil for the insurance division based on the same methodology.
- Thereafter, MPHB has proposed to undertake an offer for sale of its shares in MPHB Capital to the existing shareholders of MPHB on the basis of 1 MPHB Capital share for every two shares in MPHB.
- Offer price for MPHB Capital has been fixed at RM1.00/share. We estimate the proposed capital repayment to be undertaken by MPHB at RM0.49/share. This means that shareholders of MPHB would only have to pay RM0.02/share to take up their entitlements in MPHB Capital. MPHB would raise net proceeds of RM696.5mil from the proposed offer for sale exercise.
- MPHB Capital's main income would come from the insurance division as most of the property assets are still idle. MPHB Capital recorded a net profit of RM50.2mil in FY11. We reckon that the offer for sale price of RM1.00/share would value MPHB Capital at a FY11 PE of 14.2x.
- In comparison, Allianz Malaysia Bhd is currently trading at FY13F PE of 7.7x while Manulife Holding Bhd's FY11 PE was 10.9x.
- The entire corporate exercise is scheduled to be completed by 1HFY13. After the demerger of the non-gaming assets, MPHB would change its name to include the word 'Magnum'.
- The proposed demerger exercise would allow MPHB to be a purer company. It would also allow the group to return more cash to shareholders in the form of dividends. Currently, we have a BUY on MPHB. We would be reviewing our fair value for MPHB.
Source: AmeSecurities
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
More articles on Journey to Wealth
Ekovest: No plan to launch another offer for Iskandar Waterfront City
Created by kiasutrader | Mar 29, 2018
Kenanga Research - On our Portfolio - Parliament dissolution around the corner?
Created by kiasutrader | Mar 25, 2013
Plantation Sector - Proposed accounting standard scrapped OVERWEIGHT
Created by kiasutrader | Mar 25, 2013
Pavilion Reit - Limited upside, earnings upside have been priced in HOLD
Created by kiasutrader | Mar 25, 2013
Discussions
Be the first to like this. Showing 0 of 0 comments
Post a Comment
Featured Posts
Latest Videos
Apps
Top Articles
1
save malaysia!
Visa-free travel to China extended for Malaysians to 30 days
2
3
Koon Yew Yin's Blog
CPO price is rising rapidly as shown by chart below - Koon Yew Yin
4
Axcapital's investment blog
KAB - Executing its way to a record quarter. Could more Petronas contracts be coming?
6
7
8
BFM Podcast
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
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....
