Stock Name: MMCCORP
Company Name: MMC CORPORATION BHD
OSK Research says Malaysia Mining Corporation's (MMC) fair value will be raised only if the Initial Public Offering (IPO) price of its subsidiary, Gas Malaysia, exceeds RM1.06 during the
book-building exercise.
"While the institutional price has yet to be decided by the book-building exercise, we have a discounted cashflow value of RM1.36 billion for Gas Malaysia, or an indicative price of RM1.06 per Gas Malaysia share," it said.
The research house said MMC would strive to secure a better pricing than this in its IPO. At this valuation, MMC will raise RM147.9 million from its 10.87 per cent stake sales, it said.
"If MMC does secures at least this valuation for Gas Malaysia, it will be neutral to our Sum of Parts fair value (SOP FV) for MMC as the cash raised will just offset the drop in effective stake from 41.8 per cent to 30.9 per cent," OSK said in its research note today.
Therefore, OSK is maintaining a "trading buy" call on MMC shares and keep its SOP FV on MMC intact at RM3.58.
"After the recent selldown on global uncertainties, MMC looks very attractive and the IPO announcement should serve as a positive catalyst," it said.
MMC shares gained two sen to close at RM2.63 in the morning session today. -- Bernama
Company Name: MMC CORPORATION BHD
| Research House: OSK | Price Call: BUY | Target Price: 3.58 |
OSK Research says Malaysia Mining Corporation's (MMC) fair value will be raised only if the Initial Public Offering (IPO) price of its subsidiary, Gas Malaysia, exceeds RM1.06 during the
book-building exercise.
"While the institutional price has yet to be decided by the book-building exercise, we have a discounted cashflow value of RM1.36 billion for Gas Malaysia, or an indicative price of RM1.06 per Gas Malaysia share," it said.
The research house said MMC would strive to secure a better pricing than this in its IPO. At this valuation, MMC will raise RM147.9 million from its 10.87 per cent stake sales, it said.
"If MMC does secures at least this valuation for Gas Malaysia, it will be neutral to our Sum of Parts fair value (SOP FV) for MMC as the cash raised will just offset the drop in effective stake from 41.8 per cent to 30.9 per cent," OSK said in its research note today.
Therefore, OSK is maintaining a "trading buy" call on MMC shares and keep its SOP FV on MMC intact at RM3.58.
"After the recent selldown on global uncertainties, MMC looks very attractive and the IPO announcement should serve as a positive catalyst," it said.
MMC shares gained two sen to close at RM2.63 in the morning session today. -- Bernama
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