Few fair value from different brokers on this Ranhill IPO. TA Securities said they gives Ranhil fair value at RM2.14, based on target PE Ratio of 13x. The target multiple was derived after applying 1x premium over 12x CY14 average PER of other water related companies.
They believe the premium is justifiable given RERB’s superior dividend yield as well as the IPP exposure. The stock has also attracted credible cornerstone investors, which collectively own 12.3% stake in RERB.
They said growth meanwhile will emanate from the overseas water assets, particularly in China. They view RERB as an attractive dividend play, with potential yield of close to 5%, based on their earnings forecast and IPO price of RM1.85.
Ranhill target to have dividend pay-out ratio of 60% of earnings as dividends in FY14. The Ranhill dividend yield is about 3% plus and may increase if the payout ratio increase and/or earnings increase.
Long term dividend payout target is 50% - 70%, depending on capex requirement and new capital investment commitments.
Kenanga gives Ranhill FV RM1.90
According to The Edge, Affin gives Ranhill sum-of-parts fair value of RM2.06 to RM2.23.
More info on Ranhill IPO here.
More info on IPO here.
Please support by clicking my blog Facebook LIKE