PETALING JAYA: HwangDBS Vickers Research sees a bargain in MPHB Capital Bhd's offer-for-sale exercise and recommends investors to subscribe for MPHB Capital, as its offer price is at a 54% discount to its fair value of RM2.16.

Earlier in the week, Multi-Purpose Holdings Bhd (MPHB) announced that it was divesting its non-gaming assets and businesses to MPHB Capital for RM905.3mil to be satisfied by cash and shares.

Of the amount, RM190.3mil will be in cash, while the remainder will be settled via the issuance of 715 million new MPHB Capital shares.

MPHB is undertaking an offer for sale at RM1 per share to its shareholders on the basis of one MPHB Capital share for every two MPHB shares.

“We recommend subscribing for the 1-for-2 offer for sale of MPHB Capital at RM1. This will house MPHB's non-gaming businesses under the demerger exercise to turn into a pure gaming play.

“We value MPHB Capital at RM2.16, assuming a 50% discount to property market values and 2 times price-to-book value for its insurance business,” said HwangDBS Vickers analyst Yee Mei Hui.

Hence, she said that the renounceable rights for MPHB Capital could be worth 58 sen.

MPHB Capital owns prime landbank along Jalan Imbi (6 acres), Pengerang (4,641 acres) and Penang (289 acres).

Yee sees MPHB turning into a yield play.

“Given resilient earnings and minimal capital expenditure for gaming, MPHB intends to raise dividend payout to more than 80% from 57% currently. This works out to 19 sen net dividend per share for 2013 or a 5.7% yield, versus Berjaya Sports Toto's 5.4%,” said Yee.

She added that the separate disposal of its stockbroking unit worth approximately RM444mil and RM190mil cash proceeds from the demerger exercise, potential disposal of investments worth RM700mil, and strong gaming operating cashflows of RM400mil per annum could see MPHB turn net cash soon.

With the split, MPHB's number forecasting operator (NFO) segment was trading at just 8.5 times 2013 price earnings (PE), versus versus Berjaya Sports Toto Bhd's 13.7 times, she said, adding: “MPHB may even command a premium post-transfer of Berjaya Sports Toto's gaming operations into a Singapore business trust, because it would the only listed direct NFO play left in Malaysia.”

She raises her target price (on a cum basis) to RM4.80 from RM4.20.

• 
• 
• 

More News Business Headlines      Malaysia tycoon Vincent Tan plans IPO of football club Cardiff City      Google, like Facebook, in talks to buy Waze for about US$1bil      Crown selling entire 10% in rival Echo, partly owned by Genting(Update)      First edition of 'Great Gatsby' to be sold at auction, can fetch US$150,000      Malaysia leads the way in Basel III debt      Markets face rough summer ride as Fed pullback feared      Wall Street sags, HP hits 52-week high      Commodities trader sues BP, Shell others for alleged oil price fixing      Billionaire Icahn seeks up to US$7bil for Dell bid      Google faces new federal antitrust probe      Goldman Sachs unveils checks on conflicts in bid to fix tarnished image      Air Asia's Tony Fernandes to ‘fire up’ investors      Maybank bullish on growth, to expand regionally under new leadership      Khazanah appoints Nor Mohamed deputy chairman      Lafarge Malayan Cement to finalise next expansion plans by August      Daibochi expanding exports to S-E Asia and Australia      TDM to expand plantation and hospital ops      FBM KLCI declines on selling pressure in key regional markets      UMW Rig Asset acquires new jack-up drilling rig             ECM Libra aims to exit PN17 soon      RAM reaffirms rating on Tanjung Bin sukuk      RM705mil vessel job for Perdana Petroleum      UOA REIT bullish on assets      China Railway Corp sells US$3.26bil of debt      IHH first-quarter profit improves on higher revenue      YTL posts lower earnings for Q3, but nine-month profit rises 10.6%      MISC turns around in Q1      Petronas Dagangan quarterly earnings down 3.7%      MRCB first-quarter net profit falls on lower revenue      Daiman Q3 profit doubles to RM31mil      Lower profit for Unico-Desa, hit by depressed CPO prices      KUB in JV with Singapore firm on multi-billion ringgit Petronas Rapid Tank Project      Danajamin names non-exec director      Axiata declines to confirm or deny that it is bidding for Indonesian telco      Singapore GDP growth surprises, beats economists’ forecast of contraction      US stimulus pullback hinges on traction signs, decision could come at one of ‘next few meetings’      IMF chief in court for French arbitration case      Firm settles US SEC charges over data breach      Australia's Crown sells $255mil stake in rival Echo      Draghi says euro zone more stable, "needs a more European UK"      Sears losses mount, weighs sale of unit to shore up liquidity      Former Goldman banker settles SEC 'pay-to-play' charges      What does Lockheed's F-35 fighter jet really cost?      NYSE says AEP, NextEra trades stand after crash at open      Procter & Gamble brings back former CEO to fix company      Canadian businessman goes on trial in Cuba for corruption  Go

• Barisan mulls name change. Parti 1Malaysia?
• Civil and Syariah laws should be reviewed to prevent child marriage, Azizah
• Palanivel denies “no contest resolution” allegations
• Idris Jusoh to sue PKR and Rafizi for slander
• Mural proves so popular, owner forced to whitewash it
• MIC is the 'mother party of the Indian community', not Hindraf, says Palanivel
• Malaysian Buddhists celebrate Wesak Day
• Robber shot dead after attacking out-of-uniform cop with meat cleaver
• PKR preparing five-year GE14 'war' plan, says Azmin (updated)
• Tian, Tamrin and Haris released after remand denied (updated)
• Sea lanes, barter trading to be reviewed, says Esscom D-G
• Najib and Palanivel to discuss deaths in police custody
• Single-party Barisan Nasional is feasible, says Muhyiddin
• Rafizi: PKR filing election petition for Balik Pulau parliamentary seat
• Karpal calls for state-level Senate elections

• 5,000 cave paintings discovered in Mexico
• Cars, schools ablaze in fifth night of Stockholm riots
• London's Heathrow airport closed after emergency landing
• Far East quake felt in Moscow, tsunami warning lifted
• Police make new arrests in London soldier killing
• Britain's press demands jailing of Islamist preacher
• Tsunami warning in Russia's Far East after 8.2 quake
• US bridge collapse sends cars, people into river
• Strong quake strikes off Tonga
• Jury fails to decide on US murderer death sentence
• One killed in Brazil giant fuel depot blaze

• Kingston leads, McIlroy in Wentworth woe
• LPGA plans 12-hole rounds in water-logged Bahamas
• Ryan Palmer sizzles with 62 to seize lead at Colonial
• Kelly overcomes scare to clinch title in KLGCC
• Time to make amends Garcia wants to meet Woods to defuse racist row
• American Johnson back to defend Colonial crown
• Rain dampens debut of LPGA Bahamas event
• Tianlang adds another US event to schedule
• Clock ticking for next golden generation
• Nadal wants to create history at Roland Garros
• Serena out to tame French Open demons
• Zheng Jie stuns Wozniacki in Brussels
• British Open: Ramy Ashour racks up 38th successive win
• Nicol David sails into quarter-finals of British Open in 35 minutes
• BAM must stop rewarding mediocrity or be doomed

• Please wait.

• Singapore GDP growth surprises, beats economists’ forecast of contraction
• Air Asia's Tony Fernandes to ‘fire up’ investors
• Malaysia leads the way in Basel III debt
• Malaysia tycoon Vincent Tan plans IPO of football club Cardiff City
• Wall Street sags, HP hits 52-week high
• Lower profit for Unico-Desa, hit by depressed CPO prices
• TDM to expand plantation and hospital ops
• Lafarge Malayan Cement to finalise next expansion plans by August
• Daibochi expanding exports to S-E Asia and Australia
• Markets face rough summer ride as Fed pullback feared

Copyright © 1995-2013 Star Publications (M) Bhd (Co No 10894-D) - Investor Relations