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Monday, June 4, 2012

Felda IPO Target Price Fair Value RM5.50 to RM6.00

As what I have expected, analysts put a high Felda Global Ventures Holdings Berhad IPO target price fair value of RM5.50 to RM6.00. With the high target price, many now hoing for a high Felda IPO target listing price. Later once I have gathered the info, I will post more on FGVH IPO.

KUALA LUMPUR: Several analysts place the fair value of Felda Global Ventures Holdings Bhd (FGV) about 20 to 30 per cent above its initial public offering (IPO) price of RM4.55 a share.

The analysts contacted quoted fair value of between RM5.50 and RM6.00. The targeted date of listing of the FGV shares on the Main Market of Bursa Malaysia is June 28.
Head of Retail Research Affin Investment Bank Dr Nazri Khan, when contacted yesterday, projected the fair value of FGV shares at RM5.50 a share based on the price earnings ratio of 18 times for the current financial year.

“FGV is a large plantation company operating 343,521 hectares of oil palm plantation in Malaysia with production capacity of 5.2 million tonnes of oil palm fruits.
“It is also presently on an expansion trail, acquiring new plantations and expanding its downstream activities. These measures will attract investor interest and help to support the stability of its share price,” he said.

Head of Research InterPacific Research, Pong Teng Siew, projected a fair value of RM5.80 a share for FGV in the first month of listing.
He said the valuation, among others, is based on the company’s potential geographical expansion and cost reduction when its main focus is trained on business in the international market.
“The benefits derived from its collaboration with foreign investors will also play an important role not only in respect of economies of scale but also improved competitiveness as well as opening up scope for business expansion, he added.

Meanwhile, Maybank Investment Bank chief executive officer Datuk Tengku Zafrul Tengku Abdul Aziz said the fair value of FGV shares can reach RM6 if nothing out of the ordinary happens.
“We have seen the performance of Gas Malaysia when its IPO was oversubscribed several times although the market was uncertain at that time.

“FGV is expected to show similar performance because it has the same qualities in terms of financial strength, dividend payments, and involvement in the right business sector,” he said.
President of the Bumiputera Remisier Association Md Hasrin Md Hassim placed the fair value of FGV shares at RM6 a share.

Source: Business Times

For more information on Felda Global Ventures Holdings Berhad IPO here, PE ratio and target price

More information on Gas Malaysia IPO here, PE ratio and Target Price.

For more information on IPO here.

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