KUALA LUMPUR: Maybank Investment Bank Research said Careplus Group Bhd, which will be listed on the Ace Market on Monday, Dec 6 is fairly valued at its IPO price of 23 sen.
The research house said in a recent note that at 23 sen, Careplus is valued at historical PER of 7.8 times. Annualising its 1HFY11 EPS, the stock is fairly valued ' it will trade at 8.5 times FY11 PER versus small-cap peer Latexx Partners' 6.0 times.
'We do not think Careplus should trade on similar valuations as big-cap Supermax/Kossan's 8.5 times. The company is also an unlikely takeover target as it will be much cheaper for an acquirer to build new production lines from scratch than pay for Careplus' PER valuation,' it said on Nov 24.
Careplus expects capacity-driven earnings growth from FY12 onwards, but Maybank IB sees limited upside to its retail IPO price owing to: (i) fair valuation at its IPO price relative to small sized peers; and (ii) the presence of industry headwinds (i.e. persistently high latex prices, appreciating Ringgit).
The research house said in a recent note that at 23 sen, Careplus is valued at historical PER of 7.8 times. Annualising its 1HFY11 EPS, the stock is fairly valued ' it will trade at 8.5 times FY11 PER versus small-cap peer Latexx Partners' 6.0 times.
'We do not think Careplus should trade on similar valuations as big-cap Supermax/Kossan's 8.5 times. The company is also an unlikely takeover target as it will be much cheaper for an acquirer to build new production lines from scratch than pay for Careplus' PER valuation,' it said on Nov 24.
Careplus expects capacity-driven earnings growth from FY12 onwards, but Maybank IB sees limited upside to its retail IPO price owing to: (i) fair valuation at its IPO price relative to small sized peers; and (ii) the presence of industry headwinds (i.e. persistently high latex prices, appreciating Ringgit).
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