KUALA LUMPUR: MIDF Equities Research has set a post-listing target price (TP) for Felda Global Ventures Holdings (FGVH) at RM5.30.
It said on Wednesday it has based FGVH’s RM5.30 TP on sum-of-parts valuation.
“This translates into a blended price-to-earnings (PE) multiple of 13 times. At post-listing target price of RM5.30, FGVH would provide a potential upside of 16.5%,” it said.
MIDF Research said FGVH would be one of the FBM KLCI components. Based on the retail IPO price of RM4.55, FGVH’s market capitalisation would be at RM16.6bil, which is the 22nd largest market capitalisation in the Bursa Malaysia.
“Therefore, FGVH is conceivably an FBM KLCI potential constituent, making it a must have’ stock in every fund manager’s portfolios,” it said.
The research house pointed out that for the last three years, FGVH did not pay any dividend.
However, going forward, FGVH intends to distribute at least 50% of its net profit to its shareholders.
“At our projected EPS of 40.92 sen per share in FY13, FGVH is expected to distribute at least 20.50 sen per share as dividend. This will translate into a potential dividend yield of 4.51% at IPO price, which is higher that its peers’ historical average dividend yield of 3.5%,” said MIDF Research.