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Can-One seen undervalued – Public Investment

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Can-One seen undervalued – Public Investment Empty Can-One seen undervalued – Public Investment

Post by Cals Tue 17 Jun 2014, 01:10

Can-One seen undervalued – Public Investment
Business & Markets 2014
Written by Chong Jin Hun of theedgemalaysia.com   
Monday, 16 June 2014 09:40

KUALA LUMPUR (June 16): Can-One Bhd is undervalued after taking into account the company's debt, besides its associate and subsidiary stakes, according to Public Investment Bank Bhd.

In a note today, Public Investment said tin can manufacturer Can One shares' fair value was seen at RM3.43. This compares to Can-One's current share price at RM2.59.

"Either which way we look at it though, Can-One seems to be undervalued at its current share price, and this doesn?t even take into account its general cans business, which is worth some RM100m (about 50sen per share) at the very least.

"Its collective stakes in Kian Joo Can Factory Bhd (at the RM3.30 takeover offer price by Aspire) and F&B Nutrition Sdn Bhd are worth RM1.05bn. Setting off the group?s huge borrowings of RM388.2mn (as at 31 Mar, 2014) against that amount leaves us with a residual of RM658.5m, valuing Can-One at RM3.43 per share on the enlarged share base," Public Investment said.

Can-One has a 32.9% stake in Kian Joo. Can-One is buying the remaining 20% in 80%-owned F&B under an all-share deal worth RM112.9 million.

Can-One said it had signed a conditional share sale agreement with Teh Khoy Gen for the proposed acquisition of the 20% stake in F&B. Can-One said it would issue 39.8 million new shares in Can-One at RM2.84 each to Teh as payment for the F&B stake.
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