Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD
Research House: RHB
KUALA LUMPUR: RHB Research Institute has expressed concern over one of Parkson's major shareholders, Lion Industries (LICB) decision to invest RM281.3m for a 29% stake in Lion Blast Furnace (LBF),
The research house said on Tuesday, March 15 that under the terms of the loan facilitiy, LICB is required to create a second charge over its 14% equity interest in Parkson as collateral in the event that LFB defaults on its loan of RM2.3bn.
'We believe this development will dampen investor sentiment on the stock. Note that the JV is subject to shareholders approvals at their respective EGMs. In view of the above risks, we are attributing a 10% discount to our SOP-based fair value for Parkson, and reducing our fair value to RM5.90 (from RM6.55 previously).
'Given the limited upside to our fair value, we are downgrading our recommendation on the stock to Market Perform,' it said.
Company Name: PARKSON HOLDINGS BHD
Research House: RHB
KUALA LUMPUR: RHB Research Institute has expressed concern over one of Parkson's major shareholders, Lion Industries (LICB) decision to invest RM281.3m for a 29% stake in Lion Blast Furnace (LBF),
The research house said on Tuesday, March 15 that under the terms of the loan facilitiy, LICB is required to create a second charge over its 14% equity interest in Parkson as collateral in the event that LFB defaults on its loan of RM2.3bn.
'We believe this development will dampen investor sentiment on the stock. Note that the JV is subject to shareholders approvals at their respective EGMs. In view of the above risks, we are attributing a 10% discount to our SOP-based fair value for Parkson, and reducing our fair value to RM5.90 (from RM6.55 previously).
'Given the limited upside to our fair value, we are downgrading our recommendation on the stock to Market Perform,' it said.
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