Kenanga Research & Investment

Multi-Purpose Holdings - Last hurdle cleared

kiasutrader
Publish date: Wed, 03 Apr 2013, 08:58 AM

 

News     MPHB announced last Friday that its internal reorganisation had been completed on the day.

The disposal value of its entire equity interest in Multi-Purpose Capital Holdings Bhd (MPCH) to MPHB Capital Bhd (MPHBC) remained the same at RM392.8m.

Comments      We understand that this is the last hurdle before the listing of MPHBC. MPHB has now fulfilled all the conditions set by SC and BNM for the listing exercise.

The unchanged disposal value also means that there is no change in the valuation of the property assets that MPHB was requested to conduct an independent valuation on. This was the main reason for the delay in the listing of MPHBC.

Since there is no change in MPCH value, we believe that the Offer for Sale price of MPHBC will remain the same as RM1.00/share. This is fairly positive for the minority shareholders of MPHB as the offer is at a deep discount of 41% from our estimated fair value of RM1.73/share for MPHBC. (please refer to our report “BUY now for the free MPHBC shares” dated 28 Nov 2012)

We understand that the listing of MPHBC will likely be by end-Jun or early-Jul.

Outlook     The demerger is expected to unlock the group’s value while dividends are set to rise higher on the back of its higher 80% dividend payout policy from 50% in FY11.

Forecast     No changes to our estimates.

Rating     MAINTAIN OUTPERFORM

MPHB is our Top Pick in the gaming sector.

Valuation      Our price target is maintained at RM4.31/RNAV share.

Risks      A rise in gaming tax by the government.

Weaker than expected ticket sales and a higher than expected prize payout ratio.

Source: Kenanga

 

 

 

 

 

 

 

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