KUALA LUMPUR: OSK Research maintains its target price for Eastern Pacific Industrial Corp Bhd (EPIC) at RM2.43 based on the existing PER of 8.0 times FY11 EPS.
'We like the company's attractive dividend yield of about 5%-6% and its net cash of RM65.8 million as at 2QFY10,' it said on Monday, Aug 9.
The Edge Weekly reported that the state-controlled Terengganu Inc Sdn Bhd is planning to privatise its 40.13% unit, EPIC. It reported that Terengganu Inc has approached some of the other large shareholders of EPIC to buy over their equity, which will then trigger a mandatory general offer that would ultimately lead to privatization.
'Although we are not aware which shareholders Terengganu Inc has approached, the bigger ones are AHMAD ZAKI RESOURCES BHD [] (AZRB, 21.3%), Amanahraya Trustees Bhd (4.7%), Great Eastern Life
Assurance (M) Bhd (4.5%), private company TIS' ATA' Ashar Sdn Bhd (3.9%) while the rest own below 1%,' it said.
EPIC's current share price is at its highest level since 2009, and the stock is trading at a P/NTA of close to 1.0 times compared to 1QFY09, during which its P/NTA was only about 0.6 times.
'We believe this higher valuation is in line with its improved outlook. In the O&G industry, the P/NTA is currently averaging about 2.0 times (excluding KNM).
'Hence, our conjecture is that the offer price acceptable to the other shareholders would be about RM2.00-RM3.00, which is a P/NTA of around 1.0-1.5 times as historically, EPIC's share price had been trading at below P/NTA of 1.0 times,' it said.
'We like the company's attractive dividend yield of about 5%-6% and its net cash of RM65.8 million as at 2QFY10,' it said on Monday, Aug 9.
The Edge Weekly reported that the state-controlled Terengganu Inc Sdn Bhd is planning to privatise its 40.13% unit, EPIC. It reported that Terengganu Inc has approached some of the other large shareholders of EPIC to buy over their equity, which will then trigger a mandatory general offer that would ultimately lead to privatization.
'Although we are not aware which shareholders Terengganu Inc has approached, the bigger ones are AHMAD ZAKI RESOURCES BHD [] (AZRB, 21.3%), Amanahraya Trustees Bhd (4.7%), Great Eastern Life
Assurance (M) Bhd (4.5%), private company TIS' ATA' Ashar Sdn Bhd (3.9%) while the rest own below 1%,' it said.
EPIC's current share price is at its highest level since 2009, and the stock is trading at a P/NTA of close to 1.0 times compared to 1QFY09, during which its P/NTA was only about 0.6 times.
'We believe this higher valuation is in line with its improved outlook. In the O&G industry, the P/NTA is currently averaging about 2.0 times (excluding KNM).
'Hence, our conjecture is that the offer price acceptable to the other shareholders would be about RM2.00-RM3.00, which is a P/NTA of around 1.0-1.5 times as historically, EPIC's share price had been trading at below P/NTA of 1.0 times,' it said.
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