MPHB: One major step closer to demerger

Business & Markets 2013
Written by Alliance Research
Wednesday, 08 May 2013 10:45
A + / A - / Reset

MULTI-PURPOSE HOLDINGS BHD []
(May 7, RM3.71)
Strong buy at RM3.67 with a target price of RM4.21: Multi-Purpose
Holdings Bhd (MPHB) announced yesterday that the Securities
Commission Malaysia (SC), vide its letter dated May 6, 2013, had
granted its approval-in-principle for the registration of the listing
prospectus of MPHB Capital Bhd (MPHB Cap).
To recap, the SC approved the proposed listing of MPHB Cap last
December, subject to certain conditions, one of them requiring MPHB
Cap to conduct an independent valuation of its material property assets
and incorporate disclosures relating to the valuation and its financial
effects in the listing prospectus.
Later, the regulator granted MPHB Cap’s appeal to allow the relevant disclosures on the valuation of its material property
assets to be incorporated into the listing prospectus for information purposes based on valuations undertaken by independent
valuers engaged by the management for internal purposes, subject to: (i) the valuers updating their valuations to a more
current date which must not be more than six months from the date of the listing prospectus; and (ii) the corresponding
valuers’ reports are to be made available for inspection.
We understand this condition led to the delay of MPHB Cap’s listing, which was initially planned for the first quarter (1Q) this
year.
As such, the approval-in-principle implies that the group has fulfilled all conditions imposed by the SC since late last year.
For now, we maintain that MPHB Cap could be listed in late 2Q, although we do not discount the possibility of one or two
months’ delay given the SC’s approval-in-principle came on May 6.
We retain our strong “buy” recommendation for MPHB with an unchanged target price of RM4.21, based on our sum-of-parts
valuation. MPHB remains our top pick for the gaming sector and we maintain that the group provides thematic plays to the
potential domestic gaming liberalisation and capital management. — Alliance Research, May 7