A PEGGY Method of Stock Market Share Fair Value Target Price IPO Dividend: China Stationery Limited IPO and Sentoria Group Berhad IPO Target Price Fair Value

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Thursday, February 9, 2012

China Stationery Limited IPO and Sentoria Group Berhad IPO Target Price Fair Value

China Stationery Limit IPO is a China company or China stock, I think with the name, many will know what kind of business they are in. Some of the products are plastic filling and storage product, and plastic tape printer.

CSL IPO price is RM0.95 and let us look at some of the figures (from TA Securities):
China Stationery PE ratio is 5.3x and the earnings are projected to grow that 14% in year 2012.
Gearing is low at 0.1x and China Stationery dividend yield is 3.8%. They have a dividend policy or dividend payout ratio of 20%.

This is a new company, and therefore, hard for analysts to really accurately forecast the future earnings. China stocks are not so popular in Malaysia as evidenced in the few China stocks that are currently listed in Malaysia. TA Securities gave China Stationery target price fair value at RM1.23 with 29.5% upside from the IPO price. CSL target price fair value is based on 6x PE ratio of 2012, and 25% discount from the industry's average PE ratio.

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Sentoria Group Berhad IPO is in property development and also leisure and hospitality. Sentoria Group Berhad IPO price is RM0.85 and let us look at some of the figures (by TA Securities):

Sentoria PE ratio is 7.4x (sep 2011) and the earnings are to grow at 11.3% (sep 2012) and 16.9% (sep 2013). Sentoria dividend yield is about 3% with no net gearing (net cash).

TA gives Sentoria target price fair value also at RM0.80, valuing Sentoria at 6x PE ratio for 2012. This is a discounted 0.4x multiple of the average small cap PE ratio because of Sentoria market capitalisation of less than RM400 million, rising competition in the theme park industry and unclear earnings visibility.

For more information on recent IPO, here.
http://politemarket.blogspot.com/search/label/IPO

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