MPHB - Sells stockbroking arm

-  Multi-Purpose Holding Bhd (MPHB) has proposed to dispose of it stockbroking arm, AA Anthony Securities Sdn Bhd, to UOB Kay-Hian Holdings Ltd for a consideration in a range of RM165mil to RM170mil.

-  This is not new as it was first reported in the press in May 2012. 

-  What is new is the buyer. 

-  Previously, it was reported that AA Anthony would be sold to its management team via a management buyout.

-  Now, UOB Kay-Hian has emerged as the buyer of AA Anthony.

-  We view the disposal positively as MPHB would be a step closer towards becoming a purer NFO company. 

-  The group is targeting to list its property and insurance assets via SPV Capital by 1HFY13.

-  Based on a selling price of RM170mil, this would value AA Anthony at a Price/Net assets ratio of almost 1.0x and FY11 PE of 13.6x.  

-  AA Anthony recorded revenue of RM29.1mil and net profit of RM12.5mil in FY11.  

-  The disposal of AA Anthony would result in a gain of RM44.4mil for MPHB. 

-  Completion date of the exercise is 4QFY12.

-  We have a HOLD recommendation on MPHB currently. 

-  We would be reviewing our recommendation on MPHB as our fair value now suggests a 13% upside due to the fall in the share price.  

Source: AmeSecurities