Favorite Links

Wednesday, December 23, 2015

Only World Group reaches record high on promising outlook

KUALA LUMPUR (Dec 23): Shares of Only World Group Holdings Bhd (OWG) ( Valuation: N/A, Fundamental: N/A) extended gains for the third day, after CIMB Research said the Komtar opening could lift the share price valuation to as much as RM8.

Today, OWG gained as much as 7.53% or 22 sen to reach a record high of RM3.14.

At 12.30pm, the counter pared some gains to trade at RM3.03, up 11 sen or 3.77%, with 1.62 million shares changing hands, for a market capitalisation of RM560.55 million.

In a note dated Dec 17, CIMB Research analyst Marcus Chan said his observation deck ticket pricing assumption of Komtar, Penang, was conservative, with substantial room for upside. He pointed out themed-attraction profits have not been priced in too.

He said there could be more upside in the share price valuation as the current assumption of a blended ticket rate of RM15 for the observation deck is conservative.

Komtar could potentially earn a blended ticket rate of RM40, based on comparative pricing for tickets in KL Tower and Petronas Twin Towers.

"This would lift our financial year ending June 30, 2016 (FY16) to FY18 earnings per share (EPS) forecasts by 11% to 46% and could raise our share price valuation to RM6.95," he said.

Also, he said any revenue and profit contributions from the themed attractions have not been imputed in the forecasts as ticket prices have not been finalised.

"Based on OWG's historical ticket prices in Genting Highlands, an average RM30 per ticket is not unreasonable. At pre-tax margin of 30%, the themed attractions division could lift FY16 to FY18F EPS by 10% to 25% and could raise our share price valuation to RM6.03," he noted.

"If we include the upside potential both from higher ticket prices and the themed attractions, our FY16 to FY18F EPS could rise by 16% to 71%, which could lift our share price valuation to RM8," he added.

CIMB Research maintained its "add" rating on OWG, with an unchanged target price of RM4.93.

Year to date, the counter has risen 239.33%. (Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

No comments:

Post a Comment