MTD Cap: The bid by joint offerors holding a stake of more than 50% in MTD Capital to take over the remaining shares in the group at rm9.50 per share may not materialize now that the stock has closed above the offer price. Moreover, the independent advisor to the board and shareholders on the reasonableness of the proposed offer has recommended that the current offers not be accepted. The market forces would likely determine of the joint offerors would consider revising their offer.
Nevertheless, its strong earnings upside and potential for capacity expansion in MTD, backed by a reasonably healthy balance sheet might see minority shareholders demanding a higher priced instead of accepting the offer of rm9.50 per share.
Fair Value: rm12.76 (AMResearch)
GUH: It is sting on net cash position of rm85.5 million, plans to expand its businesses in oil palm plantation, property development and concessions (water and power generation). The expansion is to reduce the group’s reliance on its present core business in the mfg of PCB, which tends to be cyclical. Such moves may help expand earnings stream and generate interests towards the stock, whose valuations appears undemanding currently (21 Jan 2011).
Stripping out its net cash holding, investors were only valuing the group’s businesses and non cash assets at rm154 million (based on market cap of rm236 million or rm1.18 per share), which is about 3.6 times its annualized earnings for FY2010 ended Dec 31 of rm43 million. The group’s shareholders equity stood at rm389 million or rm1.90 a share.
PCB business contributed to about 83% of the group’s pre tax profit.
Hing Yiap: Its major shareholder and MD Khoo said the sale by his family was more of a personal choice with little concern on the valuations of the company. It has been the family’s intention to retire from the apparel business for quite some time now. It is learnt that there was no due diligence undertaken by the buyer Everest hectre Sdn Bhd as the transactions took only two days to conclude.
No comments:
Post a Comment