IPO JF Apex has RM1.68 TP for Titijaya

by **Cals** Wed 20 Nov 2013, 18:47

IPO JF Apex has RM1.68 TP for Titijaya

Business & Markets 2013

Written by Chong Jin Hun of theedgemalaysia.com

Wednesday, 20 November 2013 15:08

KUALA LUMPUR (Nov 20): JF Apex Securtities Bhd has a target price (TP) of RM1.68 Titijaya Land Bhd shares. This compares to Titijaya's initial public offering (IPO) price of RM1.50 a share.

In a note, JF Apex analyst Gabriela Fang said the TP is based on a price-earnings ratio of six times earnings in financial year ending June 30, 2014 (FY14).

"Our forward P/E of 6x is in line (with) the current valuation of small & mid cap property counters (such as Huayang, Glomac, Tambun, Matrix) of 6-7x forward P/E in view of current subdued sentiment for the sector in relation to recent announced property cooling measures.

"However, we opine that this is the opportune moment to accumulate the stock due to its undemanding valuation," Fang said.

According to the analyst, JF Apex has estimated net profit growth of 82% and 31% for FY14 and FY15 respectively for Titijaya.

This takes into account Titijaya's strong unbilled property sales of some RM500 million and slew of future projects.

"We are positive on the group’s long-term growth and sustainability based on its entrenched position in Klang Valley, GDV of RM4bil to last till year 2021, historically high take-up rate of c.80% for most of its projects and dividend policy of 30% payout of net profit," Fang said.

According to Titijaya's prospectus, the IPO is expected to raise RM196.82 million

The IPO involves a public issue of 81.71 million new shares at RM1.50 each. The portion is anticipated to raise RM122.57 million for the company.

The IPO includes an offer for sale of up to 49.5 million existing shares at a similar price each. The proceeds of RM74.25 million will accrue entirely to the offeror.

Titijaya expects to be listed on Bursa Malaysia's Main Market this November 27 (Wednesday).