Hot Stock Kian Joo up 3.8% after Aspire deal called off

by **Cals** Mon 18 Apr 2016, 21:01

Hot Stock

[size=28]Kian Joo up 3.8% after Aspire deal called off

By Supriya Surendran / theedgemarkets.com | April 18, 2016 : 11:38 AM MYT

KUALA LUMPUR (April 18): Shares of Kian Joo Can Factory Bhd rose as much as 12 sen or 3.8% this morning to RM3.26 and was among the top gainers on Bursa Malaysia, after announcing that its RM1.47 billion business sale agreement with Aspire Insight Sdn Bhd has been called off.

Kian Joo said the two parties had failed to come to an agreement on the takeover price.

In a note today, PublicInvest Research said that it has never been "enthused" by the deal, deeming the offer price somewhat undervaluing the company.

"With it having been called off and given that we continue to look like the strong cash flow generative abilities of the group, we are raising our target price [on Kian Joo] to RM3.52 premised on a 12 times multiple to its financial year ending Dec 31, 2017 (FY17) forecasted earnings per share (EPS) of 29.3 sen.

"Our call is correspondingly raised to 'outperform' ... we do not discount other potential offers for the company, but which we believe will be at higher levels compared to the current if any chance of success is expected, underpinning the longer-term valuation of the company," wrote PublicInvest.

The research firm also suggested accumulation of the stock, should the price weaken significantly in further reaction to the news.

However, Kian Joo's share price did not show any signs of weakening today. At 11.05am the stock climbed 10 sen or 3.2% to RM3.24, with 391,000 shares traded.

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