According to TA Securities, based on Berjaya Auto IPO price of RM0.70, BJAuto will trade at 9.1x FY14 PER and 7.8x FY15 PER. They give Berjaya Auto fair value of RM0.91, using CY14 EPS of 8.1sen and PER of 11.2x. The PER of 11x represents a 10% discount to its local peers’ average PER of 12.4x. We believe the discount is justifiable due to its relatively small market capitalisation and industry market share in the non‐national cars segment. Their fair value offers a total potential of upside of 34.0% (capital upside: 29.6%, dividend yield: 4.4%).
Kenanga said their indicative Berjaya Auto Target Price of RM0.92 is based on FY15E PE Ratio of 11x, which is at a 15% discount (for its relatively smaller market cap and smaller market share in the local
automotive market) of the current valuations of its closest competitors, Tan Chong Motor
Holdings and UMW Holdings, both trading at an implied forward PER of c.13x. They said based on their free cash flow assumption of RM53.3m in FY15, they see possibility for the payment of 40% Dividend Payout Ratio which is equivalent to total c.RM28m dividend payment or 3.3sen/share, implying a 4.7% Berjaya Dividend Yield based on the IPO price of RM0.70.
For more information on other recent IPO, here.
More information on BJAUTO IPO here.
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