KUALA LUMPUR: RHB Research has valued Focus Lumber Bhd, which will be listed on Wednesday, April 28 at 78 sen, based on target PER of 7.0 times FY11 EPS of 11.2 sen. The offer price is 60 sen.
It said this was at a 5.0 times multiple discount to its target PER of 12 times FY11 EPS for the timber sector.
'The discount is to reflect the lack of timber concession and smaller market capitalisation.
'At our target price, Focus Lumber is trading at a reasonable P/NTA ratio of 0.7 times with an attractive net dividend yield of at least 5.6%. Upon listing, Focus Lumber's net cash position will increase to RM27.1m, which translates to 26 sen a share,' it said.
Under its floatation exercise, the company raised RM7.32 million from the issuance of 12.2 million new shares of 50 sen each at an offer price of 60 sen.
ECM Libra Research said at the IPO price, the stock was valued at 5.5 times FY10 price-to-earnings was fully valued as compared to the historical average price-to-earnings of 5.3 times of Eksons, also a small cap plywood player.
It said this was at a 5.0 times multiple discount to its target PER of 12 times FY11 EPS for the timber sector.
'The discount is to reflect the lack of timber concession and smaller market capitalisation.
'At our target price, Focus Lumber is trading at a reasonable P/NTA ratio of 0.7 times with an attractive net dividend yield of at least 5.6%. Upon listing, Focus Lumber's net cash position will increase to RM27.1m, which translates to 26 sen a share,' it said.
Under its floatation exercise, the company raised RM7.32 million from the issuance of 12.2 million new shares of 50 sen each at an offer price of 60 sen.
ECM Libra Research said at the IPO price, the stock was valued at 5.5 times FY10 price-to-earnings was fully valued as compared to the historical average price-to-earnings of 5.3 times of Eksons, also a small cap plywood player.
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