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NewsRHB Research maintains Buy on Caring, raises fair value to RM2.38
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RHB Research maintains Buy on Caring, raises fair value to RM2.38
by Cals Tue 21 Jan 2014, 10:36
| RHB Research maintains Buy on Caring, raises fair value to RM2.38 |
| Business & Markets 2014 |
| Written by theedgemalaysia.com |
| Tuesday, 21 January 2014 08:16 |
KUALA LUMPUR (Jan 21): RHB Retail Research has maintained its Buy rating on Caring Pharmacy Group Bhd at RM2.04 with a higher fair value of RM2.38 (from RM2.28) and said the pharmaceutical company had hinted that it would pay dividends above the 30% minimum stipulated during its IPO.
In a note Jan 20, RHB Research said Caring’s management disclosed at the research house’s corporate luncheon that it planned to open 12-15 new pharmacies annually.
“This upbeat tone prompts us to upgrade our earnings forecast and fair value to RM2.38 (from RM2.28).
“Our target P/E remains at 18x CY14 EPS, which is at a discount to larger-cap healthcare stocks.
RHB Research said it liked CARING’s defensive earnings with dividends to boot, its hands-on management as well as market leadership.
“We think the company still has the ability to surprise on the upside with a better store mix, margins improvement and cost efficiency.
“Its valuations are justified by: i) the scarcity of pure pharmacy plays locally and regionally, ii) its resilient store sales, iii) stable ROEs of c. 24%, and iv) a strong 3-year earnings CAGR of 20.3%. Maintain Buy,” it said.
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