Kenanga Research - Adding MPHB into our Thematic Portfolio

The share price of MPHB has come under pressure after news that the listing of MPHB Capital could be delayed for three months from end-Jan/early-Feb after SC approved the new listing with conditions such as requiring the company to revalue its property assets. To recap, the offer for sale of 1-for-2 MPHB Capital’s share to its existing shareholders at RM1.00 a piece is to reward its shareholders as the market price would be higher. We have valued MPHB Capital’s assets at RM1.73/share. The huge discount is because the assets, mainly property assets, are re-valued in 2009-2011, which is not reflective of its market value. In addition, its existing shareholders will be rewarded with a RM0.49/share special dividend three months after the new listing. With that, the shareholders are practically getting the MPHB Capital’s share for free. Our TP for MPHB is RM4.31/share, which implies an upside potential of 30% from here. Hence, the recent weakness in share price offers a great opportunity to accumulate the stock and it fits into the objective of our Thematic portfolio. Hence, we are buying 4,000 MPHB shares into our Thematic portfolio.

Source: Kenanga