IPO - LEONG HUP HOLDINGS BHD - MAIN BOARD, CONSUMER
PRODUCTS/SERVICES - MY VIEW
First of all I would like to share all the latest fair value reports
which I had come accross in the news / internet for everybody's
reference (below also the links and images source of the target). Those
who maybe have coverages from other brokers, please do share at the
comment section below.
1. PUBLIC INVEST - RM 1.26
2. INTERPAC SECURITIES - RM 1.27
3. MIDF AMANAH INVESTMENT - RM 1.34
4. JF APEX - RM 1.43
5. TA SECURITIES - RM 1.43
From the above, the range of fair value is from lowest of 1.26 to 1.43.
To me, taking a middle price approach would be conservative at the
moment, therefore, I am looking at a personal TP of around RM 1.35.
A few factors to look at which make this counter a positive sentiment for tomorrow listing:
1. Q1 Earnings Up 15% to RM 60.58 million
Ahead of its listing tomorrow, the company reported an increase in earnings of 15% compared to last year same quarter.
2. Louis Dreyfus as Cornerstone Investor
Louis
Dreyfus is one of the world's biggest traders of animal feed, rice,
oilseeds, sugar and coffee and employs about 17,000 people worldwide. It
is also a familiar investor in Malaysia's agriculture industry.
As commented by Louis Dreyfus CEO on 25th April 2019, "LDC's cornerstone investment in LHI's IPO is in line with our strategy
to diversify further downstream and strengthen our footprint in growth
markets by partnering with key players in the feed, food and nutrition
value chain,"
Other big names mentioned to have garnered
keen interests from billionaire Tan Sri Quek Leng Chan, Employees
Provident Fund, the AIA Group, Maybank Asset Management, RHB Asset
Management and prominent investor Chua Ma Yu.
ALTERNATIVE COUNTERS WHICH MIGHT SEE ACTION DUE TO
SENTIMENT FROM LEONGHUP
All poultry counters should be seeing interest ahead of LEONGHUP
listing. However, 2 that I am particularly interested at are TEOSENG and
MFLOUR.
1. TEOSENG - Superb Quarter Result & LEONG HUP 53.7% Ownership
Recently, TEOSENG had posted a superb QR as below.
We see that EPS is improving each quarter. If the recent EPS of 7.37c
can be maintained for 4 quarters, we get full year EPS of around 29.48c.
Therefore. taking a conservatie PE ratio around 8-10 will yield target
price around RM 2.36 - 2.95 for longer term.
Also, refer below major shareholder list for TEOSENG as of latest 2018
Annual Report. LEONG HUP is a 2.3% direct shareholder and 51.37%
indirect shareholder of TEOSENG. Therefore, any price action in LEONG
HUP tomorrow should be reflected in TEOSENG.
2. MFLOUR - Superb QR and Rapid Expansion
Recently, MFLOUR had posted a superb QR as below.
We see that EPS is 3.02c compared to previous quarter loss. Should the
company maintain performance of 3c per quarter EPS, full year EPS will
be 12c. Taking a conservative PE Ratio of 8-10 will yield a target price
of RM 0.96 - 1.20 in long term.
MFLOUR has been rapidly expanding its capacity recently. You may refer below blog write up on this matter.
CONCLUSION
Considering all the above, I will be monitoring closely LEONGHUP, TEOSENG and MFLOUR for tomorrow 16/5/2019.
LET’S SEE HOW THE SHARE PRICE MOVEMENT IN THE NEAR FUTURE FORBEARING ANY GOOD CORPORATE NEWS.
Disclaimer : The above opinion is not a BUY CALL but only sharing my observations.
BURSAMASTER
https://klse.i3investor.com/blogs/Bursa_Master/206613.jsp
https://klse.i3investor.com/blogs/Bursa_Master/206613.jsp
