Journey to Wealth
TSH Resources - Hurdles in Pontian takeover
News It was reported in The Edge Financial Daily that TSH had only received a 8.2% acceptance rate so far from the shareholders of Pontian.
For the deal to go through, TSH and the other joint offerors need a marginal acceptance of 30.28%, and hence it will still need another 22% acceptance rate (after the above).
Recall that TSH and the other joint offerors already own 19.72% of Pontian.
Comments We believe that the deal is unlikely to go through, judging from the Bursa announcement that the 'Final Closing Date' for the offer is 10-Sep (today).
After the closing date, TSH could either offer higher prices for Pontian shares (above RM90) or leave the offer lapsed. In our view, TSH is unlikely to offer better prices as this will push its net gearing above 0.85x.
Outlook Despite this negative news flow, the company's healthy fundamentals with a strong FY12-13E FFB growth rate of 12%-30% is unaffected.
The long term outlook remains positive as we believe that TSH can sustain a 5-year FFB CAGR growth of 16% as its Kalimantan estates mature.
Hence, we believe that any share price weakness will be good opportunity to accumulate TSH shares at more attractive levels.
Forecast Our FY12-13E earnings forecasts of RM112m-RM149m are unchanged as we did not factor in anycontributions from Pontian previously.
Our key assumptions are FY12-13E CPO prices of RM3150-RM3100 and FFB productions of 448k-583k.
Rating Maintain OUTPERFORM
We continue to like TSH for its young age profile of around 6.2 years old, which is the youngest for planters under our coverage.
Valuation Maintaining our TP of RM2.85 based on FY13E PER of 15.8x (+1SD@5-year mean, implying a premium to its peers which only command +0.5SD for the reasons given above).
Risks A sustained drop in CPO prices.
Source: Kenanga
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
Introducing MY's First IPO Fund for Sophisticated Investors!
New Update. Discover investment communities that resonate with your ideas
M & A Value Partners IPO Equity Fund has been launched - Targeted 13% Return p.a
Latest Videos
MQ Trading Signals
Time
Signal
Duration
Type
2024-11-04 16:50:00
EMA 5
10 Mins
BUY
2024-11-04 16:30:00
EMA 5
10 Mins
SELL
2024-11-04 16:05:00
EMA 5
5 Mins
SELL
2024-11-04 15:30:00
TURTLE SYSTEM 20
30 Mins
BUY
2024-11-04 15:30:00
TURTLE SYSTEM 55
30 Mins
BUY
Apps
Top Articles
1
5
save malaysia!
6
Good Articles to Share
Khamenei says US, Israel will 'receive a tooth-breaking response'
7
Good Articles to Share
LIVE: Donald Trump delivers remarks in the crucial swing state of Pennsylvania
8
#
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....
