Thursday, June 28, 2012

Felda Global IPO: How high can it go?

Felda Global IPO (Stock code: FGV, 5222) will be listed today, so much has been written about it, so let's get straight to the point... how high can it go?

Let's look at 3 possible scenarios:
1. If market follow analyst Target Price, it range from RM5.44 to RM5.65. However, this price range looks like a bit too stretched at 15x - 16x Forward PE as Sime Darby (closest comparison) only trades at max 14x Forward PE.
2. Will it follow Facebook fate in 1st day IPO? Some news start to compare FGV (2nd largest IPO this year) with Facebook (largest IPO globally this year). But the reality is Facebook gained only 0.6% to US$38.23 on its 1st day of listing (IPO Price: US$38). If FGV really follow Facebook fate, it should up by only 0.6% to RM4.58.
3. The stock code is 5222, means it will jump to RM5.22? This looks more like feng shui talk, but 5.22 sounds more reasonable price, making its Forward PE closer to Sime Darby Forward PE.

Scenario 1 and 3 looks more likely, means base case RM5.22, more optimistic case RM5.44 to RM5.65. Wish to make an early congratulations to those who got some of the shares before IPO. If you want to get in after listed, quite hard to get at reasonable price...

Monday, June 11, 2012

Crest Builder Target Price RM1.49 (Kenanga Initiate Coverage)

1. We initiate coverage on Crest Builder Holdings (CBH) with an OUTPERFORM call and a TP of RM1.49, which provides a total return of 48%.
2. The TP valuation is at a 10% discount to our FD SoP of RM1.67, inclusive of 55% discount on property.
3. CBH is at its inflection point, with rerating catalysts as it moves from its traditional construction business into the property development scene via its Prasarana-awarded redevelopment project of the
Dang Wangi LRT station worth a GDV RM1.0b.
4. This is the first major award from Prasarana’s ‘rail-plus-property’ projects involving a total 40-50 available MRT/LRT station sites.
5. We like CBH for its ability to secure such a catalytic project and expect more to come, which will ultimately propel the company to greater heights as it rides on the ETP play.
6. We expect a 3-year (up to FY14E) CAGR in earnings of 31%.

Source: Kenanga