RHB Research downgrade Adventa to market perform (7191)

KUALA LUMPUR: RHB Research Institute has retained its earnings forecast for glove maker Adventa but lowered its fair value to RM2 from RM2.10.
“Downgrade to Market Perform,” it said on Wednesday.
On Tuesday, Adventa received a revised takeover offer from Aspion Sdn Bhd, which will exclude the shares in two companies -- Sun Healthcare (M) Sdn Bhd and Electron Beam Sdn Bhd.
The offer price of RM320.85mil, or RM2.10 per Adventa share, remained unchanged under the revised offer.
To
recap, Aspion had excluded all the shares of Sun Healthcare and the
100% stake in Electron Beam, if held at the completion date of the
takeover. Earlier, Adventa had agreed to acquire 2.5 million shares or
100% of Electron Bream for RM9mil.
The new offer allowed Adventa
to keep its unit, Sun Healthcare, while the rest of its business would
be disposed off to Aspion for an unchanged cash offer of RM320.9m.
RHB
Research said Adventa was acquiring Electron Beam, together with its
subsidiary, Lucenxia, for a cash consideration of RM9mil.
“In
our view, the move to acquire Electron Beam and the retention of Sun
Healthcare as part of the Group was orchestrated to reinvent Adventa as
a provider of home dialysis treatment services and a distributor of
medical equipment in order to keep it as a listed entity,” it said.
RHB
Research said the acquisition was done at an attractive price as the
purchase consideration of RM9mil implied a target FY10/12 PER of 2.3
times, based on EB's annualised FY12 earnings of RM3.9m. The offer is
also lower than Aspion's Offer to acquire Adventa's business.
“Thus far, Adventa has yet to announce its plans with respect to the
RM320.9m receivable from Aspion. However, the latest development
suggests that the entire proceeds may not be fully distributed to
shareholders,” it said.