Favorite Links

Thursday, May 29, 2014

(Icon8888) OSK Property (Part 4) - Is PE Multiple Heading Towards 4 Times ?


On 22 May 2014, OSK Prop reported net profit of RM22.9 mil for Q1 of FY2014. This translates into quarterly EPS of 9.5 sen.

FYE 31 Dec    Full year 
(RM mil)Q1 2013Q2 2013Q3 2013Q4 20132013Q1 2014
Net profit6.311.220.117.855.424.1
EPS (sen)

As explained in Part 1 of my article dated 26 March 2014, OSK Prop targets to open Atria Mall by Q4 2014. Based on preliminary calculation, net profit contribution from the new Mall could potentially amount to RM19 mil. Based on number of shares of 240 mil, that would add another 8 sen EPS to the Group. 

Based on annualised EPS of 38 sen (being 9.5 sen x 4) and additional 8 sen from Atria Mall, could we be looking at potential EPS of 46 sen next year ?

Based on latest closing price of RM1.90 and EPS of 46 sen, Prospective PE multiple works out to be 4 times only.

Based on PE multiple of 7 times, fair value for mother share would work out to be RM3.22.

Based on exercise price of RM1.00, fair value for Warrants C ("WC") would work out to be RM2.22, an upside of 131% based on latest closing price of RM0.97.

No wonder Tan Sri Ong Leong Huat has been actively buying back WC at price as high as 85.5 sen recently (please refer to table below).

Acquisition of OSKProp-WC by Tan Sri Ong Leong Huat Since January 2014 
 UnitsPrice Paidunits 
21 Apr 201440,0000.85581,223,50976.52
18 Apr 2014126,8000.841  
17 Apr 201459,7000.84481,056,70976.36
15 Apr 201432,5000.810  
9 Apr 2014149,0000.79980,964,50976.28
8 Apr 201461,1000.796  
1 Apr 20142,1000.77980,754,40976.08
28 Mac 2014478,6000.78780,752,30976.08
27 Mac 201441,5000.710  
26 Mac 2014146,8000.688  
21 Mac 2014590,1000.61180,085,40975.45
20 Mac 2014229,0000.600  
19 Mac 2014122,0000.59279,266,30974.68
18 Mac 2014645,4000.600  
17 Mac 2014652,9000.606  
16 Jan 2014227,3000.52876,646,80972.21
10 Jan 2014363,3000.54776,419,50971.99

No comments:

Post a Comment