Stocks In Focus MY (CAB Cakaran, IOI Properties, Uzma) – 08/12/14
CAB Aims To Achieve RM1b In Revenue
CAB Cakaran Corporation is on track to hitting revenues of close to RM1 billion next year, riding on its intention to tap into the Singapore market and its expansion plans for its poultry farms in the country.
The group noted that the plan to acquire a 51 percent stake in Singapore-based poultry slaughtering house, Tong Huat Poultry Processing Factory, for RM19.2 million, would enable the group to capture both the markets in Singapore and Johor.
The company also intends to spend RM15 million to RM20 million in 2015 to expand its breeder farms, as well as acquire stakes in a few chicken farms in Johor to expand in the southern region.
Significance: The group is confident that its expansion plan will help reach its revenue target of RM1 billion by 2016. Moving forward, the group would also explore supplying more downstream chicken-based food products to branded fast-food restaurant chains.
IOI Properties Eyes Taipei 101
Property heavyweight IOI Properties Group is making a bold move into the Taiwan real estate as it proposes to buy a stake in iconic skyscraper Taipei 101 for RM2.7 billion at a time when the ringgit is weakening.
The hefty price tag for the 37.2 percent stake in Taipei Financial Center Corporation that owns Taipei 101 is about one-third of the group’s market cap. The acquisition requires the approval from the Investment Commission of Taiwan and is expected to be completed by 1Q15.
There has been speculation that the group is looking into establishing a real estate investment trust in the long-term and the proposed acquisition could be a way to position itself.
Significance: While one analyst interviewed by StarBiz said that the acquisition could present long-term potential and that the estimated rental yield of 5 percent is decent, another analyst was more cautious as she opined that acquisition might be earnings dilutive and that the group could have allocated the money for landbanking purposes.
CIMB Research Upbeat On Uzma
CIMB Equities Research is positive on Uzma’s acquisition of a 19 percent stake in its associate Setegap Ventures Petroleum for RM28.5 million, which will raise the firm’s equity interest to 49 percent.
The research house said that the move will allow Uzma to better participate in a growing and profitable company, and complements its integrated drilling and well services.
Based on Setegap Ventures’ 9M15 annualised profit after tax of RM16.5 million, the purchase price implies a purchase valuation of 9.1 times FY14E price to earnings (P/E), which CIMB Research thinks is fair.
Significance: CIMB Research has reiterated its ‘Add’ recommendation on Uzma and maintained its target price of RM3.81, valuing the stock at 14.8 times CY16 P/E, a 30 percent discount to the oil and gas big caps. The research house also expects more acquisitions in 2015 as the group continues to grow.
http://www.sharesinv.com
CAB Aims To Achieve RM1b In Revenue
CAB Cakaran Corporation is on track to hitting revenues of close to RM1 billion next year, riding on its intention to tap into the Singapore market and its expansion plans for its poultry farms in the country.
The group noted that the plan to acquire a 51 percent stake in Singapore-based poultry slaughtering house, Tong Huat Poultry Processing Factory, for RM19.2 million, would enable the group to capture both the markets in Singapore and Johor.
The company also intends to spend RM15 million to RM20 million in 2015 to expand its breeder farms, as well as acquire stakes in a few chicken farms in Johor to expand in the southern region.
Significance: The group is confident that its expansion plan will help reach its revenue target of RM1 billion by 2016. Moving forward, the group would also explore supplying more downstream chicken-based food products to branded fast-food restaurant chains.
IOI Properties Eyes Taipei 101
Property heavyweight IOI Properties Group is making a bold move into the Taiwan real estate as it proposes to buy a stake in iconic skyscraper Taipei 101 for RM2.7 billion at a time when the ringgit is weakening.
The hefty price tag for the 37.2 percent stake in Taipei Financial Center Corporation that owns Taipei 101 is about one-third of the group’s market cap. The acquisition requires the approval from the Investment Commission of Taiwan and is expected to be completed by 1Q15.
There has been speculation that the group is looking into establishing a real estate investment trust in the long-term and the proposed acquisition could be a way to position itself.
Significance: While one analyst interviewed by StarBiz said that the acquisition could present long-term potential and that the estimated rental yield of 5 percent is decent, another analyst was more cautious as she opined that acquisition might be earnings dilutive and that the group could have allocated the money for landbanking purposes.
CIMB Research Upbeat On Uzma
CIMB Equities Research is positive on Uzma’s acquisition of a 19 percent stake in its associate Setegap Ventures Petroleum for RM28.5 million, which will raise the firm’s equity interest to 49 percent.
The research house said that the move will allow Uzma to better participate in a growing and profitable company, and complements its integrated drilling and well services.
Based on Setegap Ventures’ 9M15 annualised profit after tax of RM16.5 million, the purchase price implies a purchase valuation of 9.1 times FY14E price to earnings (P/E), which CIMB Research thinks is fair.
Significance: CIMB Research has reiterated its ‘Add’ recommendation on Uzma and maintained its target price of RM3.81, valuing the stock at 14.8 times CY16 P/E, a 30 percent discount to the oil and gas big caps. The research house also expects more acquisitions in 2015 as the group continues to grow.
http://www.sharesinv.com
