IPO : EA Technique, Kronologi Asia and OWG IPO fair value target price
TA Securities said.... We make direct comparison with Icon Offshore, which was listed on the Main Market of Bursa Malaysia in June-14, as both E.A.Technique and Icon Offshore are involved in the provision of marine services to the O&G sector in Malaysia. More importantly, this comparison will allow us to assess the market sentiment on the recent O&G IPOs. Icon Offshore is currently trading at 10.2x FY15 PE, which is close to E.A.Technique’s 10x FY15 based on the IPO price of RM0.65. However, based on our target PE of 11x for Icon Offshore, E.A.Technique’s fair value will be 71.5sen. Although E.A.Technique’s market capitalization is relatively small if compared with Icon Offshore, the company’s FY15 EPS growth will be decent and superior to Icon Offshore. As such, we value E.A.Technique at RM71.5sen using 11x FY15 earnings. NOT RATED.
RHB said we valued EA Technique at RM0.75, using DCF valuation (WACC: 7%). This gives an implied FY15 P/E and P/BV of 12.8x and 1.3x respectively. The tanker shipping and tugboat provider has clear earnings visibility with an orderbook size of MYR1.28bn, equivalent to 10.6x its FY13 revenue. Its expanding fleet and lower charter-in costs ahead means recurring earnings CAGR for FY13-16 is projected at 20.3%.
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OWG
TA Securities said.....
Based on its IPO price of RM0.88, OWG is valued at c. 11.3x for FY14. There are no direct competitors for OWG because most of their businesses are operated in Genting Highlands where they are the major third party operator. Hence, we fairly value OWG at RM1.03 using CY15 EPS of 9.7sen. This is at a slight 10% discount to the average of its closest peers’ PER of 11.8x. Here, we based our valuation on Oldtown Berhad (chain food retailer) and Sentoria (amusement park operator), which are trading at PE13.6x and 10x for the leisure division respectively. We believe the discount is justified by OWG’s F&B concentration in Genting vs. Oldtown regional presence. Total upside works out to c. 18.2%.
TA Securities said....
We value Kronologi Asia at a TP of RM0.32/share. This is based on a PER of 12x and CY15 EPS of 2.6sen. Screening for its closest comparable, the median trailing PER for the sector stood at 18.9x. However, we opine that the data may be distorted due to the: 1) Underlying growth potential of the companies (unfortunately none of the related ones are under analyst coverage) and 2) Lower EPS on a poor string of recent results. Our TP translates into a potential capital upside of 10.3%. NOT RATED.
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TA Securities said.... We make direct comparison with Icon Offshore, which was listed on the Main Market of Bursa Malaysia in June-14, as both E.A.Technique and Icon Offshore are involved in the provision of marine services to the O&G sector in Malaysia. More importantly, this comparison will allow us to assess the market sentiment on the recent O&G IPOs. Icon Offshore is currently trading at 10.2x FY15 PE, which is close to E.A.Technique’s 10x FY15 based on the IPO price of RM0.65. However, based on our target PE of 11x for Icon Offshore, E.A.Technique’s fair value will be 71.5sen. Although E.A.Technique’s market capitalization is relatively small if compared with Icon Offshore, the company’s FY15 EPS growth will be decent and superior to Icon Offshore. As such, we value E.A.Technique at RM71.5sen using 11x FY15 earnings. NOT RATED.
RHB said we valued EA Technique at RM0.75, using DCF valuation (WACC: 7%). This gives an implied FY15 P/E and P/BV of 12.8x and 1.3x respectively. The tanker shipping and tugboat provider has clear earnings visibility with an orderbook size of MYR1.28bn, equivalent to 10.6x its FY13 revenue. Its expanding fleet and lower charter-in costs ahead means recurring earnings CAGR for FY13-16 is projected at 20.3%.
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OWG
TA Securities said.....
Based on its IPO price of RM0.88, OWG is valued at c. 11.3x for FY14. There are no direct competitors for OWG because most of their businesses are operated in Genting Highlands where they are the major third party operator. Hence, we fairly value OWG at RM1.03 using CY15 EPS of 9.7sen. This is at a slight 10% discount to the average of its closest peers’ PER of 11.8x. Here, we based our valuation on Oldtown Berhad (chain food retailer) and Sentoria (amusement park operator), which are trading at PE13.6x and 10x for the leisure division respectively. We believe the discount is justified by OWG’s F&B concentration in Genting vs. Oldtown regional presence. Total upside works out to c. 18.2%.
TA Securities said....
We value Kronologi Asia at a TP of RM0.32/share. This is based on a PER of 12x and CY15 EPS of 2.6sen. Screening for its closest comparable, the median trailing PER for the sector stood at 18.9x. However, we opine that the data may be distorted due to the: 1) Underlying growth potential of the companies (unfortunately none of the related ones are under analyst coverage) and 2) Lower EPS on a poor string of recent results. Our TP translates into a potential capital upside of 10.3%. NOT RATED.
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