not vested
AZRB worth double its value: CIMB Research
September 8, 2014
KUALA LUMPUR: CIMB Equities Research estimates Ahmad Zaki Resources Bhd (AZRB), with its last traded price at 72 sen, is worth double its value today.
“The share price is a big laggard when compared to the share prices of other small-cap contractors or other small-cap stocks in general, which have surged or even doubled year-to-date,” it said on Monday.
CIMB Research said for AZRB, it applied a 50% discount to AZRB's RNAV/share of RM2.95.
“The 50% discount is fair in our view and it is higher than the 10%-40% we apply to the construction stocks under our coverage. We arrive at an implied value of RM1.48 a share, which implies an upside of 103%,” it said.
CIMB Research said based on its estimates, the stock is worth double its value. The share price is a big laggard when compared to the share prices of other small-cap contractors or other small-cap stocks in general, which have surged or even doubled YTD.
“AZRB's business structure is similar to the likes of Gamuda and IJM Corp i.e. an order book-driven construction earnings, backed by stable and predictable earnings from property development, with more lucrative margins coming from other segments like its oil & gas bunkering facilities. There are also inherent values from its property and plantation land banks.
“Construction and oil & gas are the two major profit generators for AZRB, with contributions coming in at an equal split,” said the research house.
Source: the Star