by winston » Thu Dec 03, 2020 8:58 am
not vested
Sunway (RM1.41) - ICPS issuance over-subscribed (HG Tan)
Announced that its ICPS has been over-subscribed by 0.66%.
With number of units subscribed, Sunway will be raising RM977.8m from this ICPS exercise.
Andrew said his pro-forma calculation implies net gearing to ease to 0.36x (from 0.49x as of 3Q20) post-issuance or 0.31x after taking into account the completion of disposal of Sunway Pinnacle in 4Q20.
Note that net gearing calculation uses Total Equity (which includes the Perpetuals and upcoming ICPS) as a denominator as Sunway bases its net gearing threshold 0.5x on this.
Andrew views the oversubscription positively as it indicates the public’s confidence on Sunway’s prospects.
The exercise will further strengthen Sunway’s balance sheet and ability to expand its business moving forward.
The ICPS and new extra warrants allocated to existing warrants holders will be listed on 8 Dec.
Separately, understand the healthcare bidding process will likely be concluded by end-2020. This is exciting as it brings in strategic shareholder to help expand healthcare business while revealing the intrinsic value of healthcare via the valuation pegs by the new strategic partner.
With its concerted efforts to expand healthcare, quarry, manufacturing and trading in building materials, the group will transform itself from property (still perceived that way by analysts) to a group with well diversified earnings bases.
Andrew's existing forecasts.
Core net EPS :
FY19 a : 13.1 sen
FY20 e : 8.0 sen
FY21 f : 13.1 sen
FY22 f : 13.8 sen
Andrew maintains Buy call with TP of RM1.95 based on a 10% holding discount to a SOP-derived value of RM2.17.
Source: HLIB
It's all about "how much you made when you were right" & "how little you lost when you were wrong"