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Tuesday, July 3, 2012

IHH HEALTHCARE BERHAD IPO

Let us look at IHH target price fair value with PE ratio. Based on IHH IPO share price of RM2.85, from  the data that I have gathered, IHH PE ratio will be very high at above 30x year 2012. Even for year 2013, IHH PE ratio will be still more than 20 times.
For the next few years, IHH income has projected to grow. But PE ratio is still high. Argument is that most regional heathcare stocks also trade at PE Ratio above 20x and IHH supposed to trade at much higher PE ratio than the regional average because IHH market capitalisation is much bigger, owned by Malaysia government through Khazanah, good track records and brand name. After listing, IHH will be one of the biggest listed private heathcare providers.

But I thought the analysts always told us that as a holding company the stock will trade at lower PE ratio? IHH Healthcare Berhad is considered as a holding company. They holds Parkway, Pantai, IMU, etc.

Should IHH trade at lower PE ratio or higher PE ratio? I am very confused.

Remember Bursa Malaysia stock? At RM15 in year 2007, broker recommended to buy Bursa Malaysia stock, using regional PE ratio as basis for fair value. Then what happened? Market has recovered and touching new high, but Bursa Malaysia stock still trading at RM6.20!!

If IHH will to trade at PE ratio of just 20x, IHH target price fair value will be only RM2.44, that is lower than the IHH IPO price of RM2.85. But there are many things that I don’t know. What is beyond 2013? What will be IHH’s profit beyond 2013?


If we stretch the valuation of IHH, I think IHH fair value can be stretched to RM3.20, that is based on IHH PE ratio of more than 25 times.


If beyond 2013, IHH’s profit can continue to grow at reasonable rate, then can justify a higher PE ratio and higher target price. Furthermore, stock price is also based on sentiment. More buying interest, the stock price will goes up, who cares about profit figures. Malaysia general election is coming soon, IHH share price can goes up?

That’s all for the time being. I will post more once I have gathered more information. Do visit my blog again.

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IHH IPO price RM2.85.


Opening of application 03/07/2012

Closing of application 11/07/2012

Balloting of applications 13/07/2012

Allotment of IPO shares to successful applicants 23/07/2012

Tentative listing date 25/07/2012


THE GLOBAL OFFERING OF UP TO 2,234.65 MILLION ORDINARY SHARES OF RM1.00 EACH IN IHH HEALTHCARE BERHAD (FORMERLY KNOWN AS INTEGRATED HEALTHCARE HOLDINGS BERHAD) (“IHH”) (“SHARES”) COMPRISING A PUBLIC ISSUE OF UP TO 1,800.00 MILLION NEW SHARES AND AN OFFER FOR SALE OF UP TO 434.65 MILLION EXISTING SHARES (COLLECTIVELY “IPO SHARES”) INVOLVING THE:

(I) INSTITUTIONAL PLACEMENT OF UP TO 498.01 MILLION IPO SHARES COMPRISING:

UP TO 360.00 MILLION IPO SHARES TO BUMIPUTERA INSTITUTIONAL AND SELECTED INVESTORS APPROVED BY THE MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY (“MITI TRANCHE”); AND

UP TO 138.01 MILLION IPO SHARES TO OTHER MALAYSIAN INSTITUTIONAL AND SELECTED INVESTORS, FOREIGN INSTITUTIONAL AND SELECTED INVESTORS OUTSIDE THE UNITED STATES IN RELIANCE ON REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (“US SECURITIES ACT”), AND WITHIN THE UNITED STATES TO QUALIFIED INSTITUTIONAL BUYERS AS DEFINED IN RULE 144A OF THE US SECURITIES ACT (“GLOBAL INSTITUTIONAL TRANCHE”), AT THE INSTITUTIONAL PRICE TO BE DETERMINED BY WAY OF BOOKBUILDING (“INSTITUTIONAL PRICE”);

(II) MALAYSIA PUBLIC OFFERING OF UP TO 208.51 MILLION IPO SHARES TO THE MALAYSIAN PUBLIC, ELIGIBLE DIRECTORS AND ELIGIBLE EMPLOYEES OF IHH AND ITS SUBSIDIARIES (“IHH GROUP”), AND BUSINESS ASSOCIATES AND PERSONS WHO HAVE CONTRIBUTED TO THE SUCCESS OF THE IHH GROUP, INCLUDING DOCTORS, AT THE RETAIL PRICE OF RM2.85 PER IPO SHARE (“RETAIL PRICE”);

(III) SINGAPORE OFFERING OF UP TO 140.64 MILLION IPO SHARES, IN CONJUNCTION WITH THE CONCURRENT SECONDARY LISTING ON THE MAIN
 BOARD OF THE SINGAPORE EXCHANGE SECURITIES TRADING LIMITED (“SGX-ST”) (“SECONDARY LISTING”), COMPRISING:

AN OFFERING TO THE SINGAPOREAN PUBLIC, ELIGIBLE DIRECTORS AND ELIGIBLE EMPLOYEES OF THE IHH GROUP, AND BUSINESS ASSOCIATES AND PERSONS WHO HAVE CONTRIBUTED TO THE SUCCESS OF THE IHH GROUP, INCLUDING DOCTORS, AT THE RETAIL PRICE OF SGD1.18 PER IPO SHARE; AND

A PLACEMENT TO INDIVIDUALS, CORPORATIONS AND OTHER INVESTORS IN SINGAPORE AT THE FINAL RETAIL PRICE PER IPO SHARE; AND

(IV) CORNERSTONE OFFERING THAT IS SEPARATE FROM BUT CONCURRENT WITH THE INSTITUTIONAL PLACEMENT, MALAYSIA PUBLIC OFFERING AND SINGAPORE OFFERING, WHERE EACH OF THE CORNERSTONE INVESTORS HAS ENTERED INTO A CORNERSTONE PLACEMENT AGREEMENT WITH IHH TO SUBSCRIBE FOR AN AGGREGATE OF 1,387.50 MILLION IPO SHARES AT THE INSTITUTIONAL PRICE, SUBJECT TO THE TERMS OF THE RESPECTIVE CORNERSTONE PLACEMENT AGREEMENTS.

THE RETAIL PRICE IS PAYABLE IN FULL UPON APPLICATION AND SUBJECT TO A REFUND OF THE DIFFERENCE IN THE EVENT THAT THE FINAL RETAIL PRICE IS LESS THAN THE RETAIL PRICE. THE FINAL RETAIL PRICE WILL EQUAL THE INSTITUTIONAL PRICE, SUBJECT THAT IT WILL NOT EXCEED THE RETAIL PRICE.

THE INSTITUTIONAL PLACEMENT, MALAYSIA PUBLIC OFFERING AND SINGAPORE OFFERING ARE SUBJECT TO THE CLAWBACK AND REALLOCATION PROVISIONS AND OVER-ALLOTMENT OPTION AS DESCRIBED IN THIS PROSPECTUS.


Thanks


More info on IHH, here.
http://politemarket.blogspot.com/search/label/IHH



More info on IPO target price, here.
http://politemarket.blogspot.com/search/label/IPO%20Target%20Listing%20Price


More info on recent IPO, here.
http://politemarket.blogspot.com/search/label/IPO



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Thanks

6 comments:

  1. noted. can you show your calculation and u derived to get PE 30X. what is the EPS 2012 AND 2013 AND 2014.
    CAN U tabulate the calculation.

    ReplyDelete
  2. There are a few conflicting figures.

    1)The Star and 2)Business Times
    The group posted a profit of 394.117 million ringgit in 2011

    3)Malaysian Insider
    an indicative price of RM2.85 was reported to be 93 times 2011 earnings.
    If i use 8.06 billion shares, the earnings will be only RM97 million.

    4)Some sites and a broker show
    RM505mil in 2011.

    Many conflicting figures.


    My assumption is using RM394 milion.

    As reported in The Star RM120 million interest savings. I think is too little.

    I expect a savings of at least RM220 million, based on RM4.6 billion reduction in borrowings.


    RM394mil + 20% growth (industry is about 12%) + RM220 mil = RM700 mil profit in 2012.

    Based on 8.06 billion shares, EPS will be RM0.087.
    IHH PE ratio will be 32x in 2012.


    Anyway, because there are so many conflicting figures going around, many may due to outdated data, I will prefer to wait for at least two IHH research analysts reports, then will post on the figures and readjust my figures.

    ReplyDelete
  3. Hi Peggy, i believe 1 and 2 is using forward PE, extrapolated using FY12Q1 results. 3 is using historical PE based on full year FY11 results.

    Which is more reasonable, that will be up to personal interest.

    ReplyDelete
  4. Typo mistake, my prediction is for 2013, not for 2012. They can only achieve a full year interest saving in 2013, and the growth of 20% is for two years, excluding interest saving. Prediction is about RM700mil for year 2013.

    ReplyDelete
  5. Any of you get refund of RM0.05 after adjusted IPO price from IHH?

    ReplyDelete
    Replies
    1. Got. How u apply? Please check again

      Delete

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