PRESBHD IPO share price target fair value

Too many IPO, no time to think. Market also not so good. Do a quick one.

2010,2011,2012
Prestariang PE ratio, 13.4x, 7.1x, 5.5x
Growth 102%, 86%, 27%
Net gearing nil, net cash
Prestariang dividend yield 7.1%

Prestariang dividend policy is 50% payout ratio for the next 3 years.

Above figures from TA Securities, Prestariang target price of RM0.98 based on 6x FY12 EPS of
16.3sen. The 6x PER represents a 50% discount to TA average technology sector PER of 12x which they believe is fair due to 1) its small market capitalization 2)conservative business model that merely focuses on government contracts 3) high proportion of offer for sale that cast doubt about management's confidence in sustainable business. It offers a capital potential of approximately 9%. As such, TA recommend investors not to subscribe to Prestariang.

Author: Polite Market