How much KPS is worth?
News reported that Datuk Seri Azmin Ali has discussed about state’s water restructuring with MB Selangor Amirudin Shari recently. Quoting him, “the restructuring of the water industry services in Selangor has been delayed for a long time because of the lack of understanding and cooperation between the previous federal government and the state government, but now it will run smoothly as there is good cooperation between the state and federal governments under Pakatan Harapan,”
Based on a quick assessment on KPS’s sum of the parts valuation, KPS should be valued at least at RM2.92. Still, this is considered a very conservative valuation as the assumptions to value other revenue-generating businesses are only at acquisition price. Please refer table below. Hence, based on current share price, KPS is seen hugely undervalued. It is understood if KPS is trading at huge discount to its fair value previously due to unresolved SPLASH issue. But now, the discount should be removed already as SPLASH deal is coming this month.
| Asset |
Stake
|
Value
(RM m) |
Assumptions
|
| SPLASH |
30%
|
990
|
1.0x Book Value
|
| Century Bond |
99%
|
208
|
Acquisition Price
|
| King Koil |
60%
|
116
|
Acquisition Price
|
| CPI |
100%
|
250
|
Acquisition Price
|
| Smart Pipe |
60%
|
5
|
Acquisition Price
|
| Fair Value (RM) |
1,569
|
||
| No of shares (unit) |
538
|
||
| Fair Value/Share (RM) |
2.92
|
Disclaimer: This is my personal opinion and not recommendation. Please ask your remisier or dealer representatives before making any decision. Trade at your own risk.
http://klse.i3investor.com/blogs/howmuchkpsworth/163544.jsp
