Journey to Wealth
Multi-Purpose Holdings - SC approves appeal with conditions HOLD
- Multi-Purpose Holdings Bhd (MPHB) announced that the Securities Commission (SC) has approved its appeal to allow relevant disclosures on the valuation of MPHB Capital's property assets to be incorporated in the listing prospectus.
- However, the appeal is subject to the condition that the professional valuers update their valuations to a more current date, which must not be more than six months from the date of the listing prospectus. Also, the valuers' reports must be made available for inspection.
- We believe that SC's condition would result in delays in MPHB's demerger exercise.
- It appears that MPHB would have to conduct an updated revaluation exercise on all of its properties.
- Assuming that the listing of MPHB Capital was to take place in May or June 2013, this means that the properties must be re-valued based on market values as at November or December 2012.
- The last revaluation dates of MPHB's property assets in Selangor, Johor and Penang were March and October 2011.
- The most recent revaluation date was in respect of some of the properties in Penang. The revaluation date of these properties was 24 February 2012.
- We are unsure if MPHB would be able to complete the updated revaluation exercise on all of its properties on time for a listing date in June 2013.
- We believe that if the demerger exercise is not completed by end-June 2013, then the corporate exercise would have to be submitted again based on audited accounts as at 31 December 2012.
- In spite of our fair value, which suggests an upside of 20.8%, we are keeping our HOLD recommendation on MPHB for now. This is due to the uncertainties over the group's demerger exercise.
Source: AmeSecurities
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Jonathan Keung
revaluation exercise within a time frame of 6 months is tough. MPHB hold a spectrum of landed and non landed properties. Valuers need time to update their valuations ( ie. based on last transacted price ) less whatever costs plus mark to market valuations.
2013-02-15 16:40