· We value MPHB at RM2.38, based on a 20% discount to our RNAV of RM2.98/share. Our target price implies 0.8x 2014F P/B, deemed undemanding, given its ample opportunities to monetise its prized assets and potential new JVs which may transform MPHB into a purer property company.
· Demerging exercise to unlock value. Prior to a spin-off corporate exercise and a separate listing in 28 Jun 13, MPHB was part of conglomerate Multi-Purpose Holdings. To unlock the value of its non-gaming assets, Multi-Purpose Holdings demerged its gaming and non-gaming businesses. Post corporate exercise and a name-change, MPHB’s principal activities now include general insurance, property investment, hospitality and credit businesses while Magnum (MAG MK) operates the number forecasting business.
· In the midst of unlocking significant values… We foresee MPHB monetising or unlocking more than RM500m (48% of market cap) worth of assets in the next 12 months, and >RM1b in the next two years, via a) the outright sales of its assets, b) JV development with BRDB, and c) the redevelopment of existing properties.
· …starting with the disposal of its Balik Pulau land at pleasantly surprising values. On 21 Aug 13, MPHB sold its 208-acre Balik Pulau land for RM226m (or RM25psf). MPHB is expected to recognise a disposal gain of RM194m in 1Q14, based on the land’s book value of only RM32m. The buyer, Twin Universal Sdn Bhd, paid a forfeitable deposit of RM22.6m and the balance of RM203m would have to be paid by Feb 14. (Note: The buyer has an option to extend the balance payment deadline by 6 months provided they pay another 10% of the total purchase consideration in Feb 14 and 8% interest p.a. until the expiry of the extended completion date)
· More property sales likely. Currently, MPHB operates two hotels - Hotel Flamingo by the beach in Penang and Hotel Flamingo by the lake in Ampang. These two hotels contribute about RM10m EBIT annually. We understand MPHB may consider selling Hotel Flamingo by the beach, which carries a book value of RM45m. We reckon this 280-room, 4-star hotel could fetch RM150m, translating into a gain of RM105m.

MPHB Capital Berhad (MPHB MK) BUY
Price/Tgt: RM1.46/2.38 Mkt Cap: US$322.4m 3-mth Avg Val: US$1.5m 1-Yr Hi/Lo: RM1.57/1.30
Revealing its true value
Analysts: Vincent Khoo, CFA / Yeoh Bit Kun Tel: (603) 2147 1998 / 1971
We initiate coverage with a BUY and a target price of RM2.38, based on a 20% discount to our RNAV of RM2.98/share. Key re-rating events could emerge that would allow MPHB to monetise or unlock its under-appreciated assets estimated to be worth RM500m (48% of market cap) in the next 12 months and potentially >RM1b in the next two years.

Investment Highlights
· Enriched by cash monetisation exercises. MPHB Capital (MPHB) could see cash monetisation exercises, such as the recent sale of its Balik Pulau landbank at a surprisingly lucrative RM226m (or RM25psf). Within the next few months through to 2015, new event milestones could emerge to enrich MPHB, including an outright sale of properties, injecting prized landbank into a new JV, a maiden property launch at its existing JV with Bandar Raya Development (BRDB), and a favourable price discovery of its Pengerang land that was compulsorily acquired. It is also conceivable that it would eventually rope in foreign strategic shareholders for its insurance business to add value to its existing business, which we conservatively value at RM504m or RM0.70/share.
· Transforming into a property-centric company. We believe MPHB would be much more active in directly or indirectly participating in property development over time. The timing of its entry, which should involve landbanking activities, may be fairly ideal by then as land prices increase.
· In good stead to offer attractive dividend yields. Meanwhile, the company would be in a strong position to reward shareholders with attractive dividends, given its estimated cash hoard of RM0.36/share (excluding the Balik Pulau land sale proceeds).

tried to copy the whole word file but too many characters...cannot post comment

give me your email address and I will sent to you..it's in pdf format

those selling is playing on short term...have to keep for longer term...

Got it the report from my broker few days back

UOB TP for this share is at RM2.38 with 20% discount of RNAV of RM2.98 / Share...more up side...;oP

Company has plans to buy back 10% of it shares..

GOB and Malton needs volume to push up...can take a look at Notion...TP 0.98..small volumes can also push up the price

Slowly going up..TP still intact..

still too many uncertainty in the coming months, QE reduction, possibility of US attacking Syrian, currency depreciation, possibility of slow down in economies. Better cut lost and save your bullets to go in when market has rock bottom and stable again. It'll take time for markets to go up trend after all this..

when is the 2nd quarter result due to be out?

EPF accumulating..when others are selling

more revenue coming in for next 2 quarters...so better result expected later

Any one can forward me the Cresbid IV calculator? My email is at kelvinongbk@hotmail.com

When is the quarter report coming out?

some counters a on a rebound...come on Magnum rebound...

Saw Dow futures yesterday was green before went to bed...in the morning...Dow was down 100points...

problem is that we don't know how extensively the correction is and normally for technical rebound...it will be slow one due to loss of confidence of investor

The plus side is they are having launching in Dec this year and the land bank near the 2nd bridge will further drive growth for the company

u think they will announce any more dividend this quarter?

when is the 2nd quarter result coming out?

u think Sime is continuing purchasing this share?

In general property market in Penang might be contracting but GOB is mainly on high ended properties and with longer term view of land space getting less in Penang..Malaysia still got many rich people who can afford high end properties...

well all markets are down today, so most of the counters will be down...have to look at longer term on fundamental for stock - if a company is worthwhile for longer term...only buy on assumption that you'll own the stocks forever...quoted from Warren Buffet..

Tomorrow the agenda for the Sept meeting from Fed US will be out. It'll give some information if the Fed will continue the QE or pull back in Sept. If pull back, it'll be bad news for all the stock markets...fund will run..

What is the target for next resistance?

Go Turbo...DRBHCOM---VROOM!

what is the target to sell for this share?

if Sime take offer..what do you think would be the offer price?

Dump this share...goreng has already moved on to other shares already...

someone

Hi can some forward the FA analysis template to me. Email at kelvinongbk@hotmail.com

Hi KCChongnz. Can u forward to me a copy of the FA. My email is kelvinongbk@hotmail.com
I'm quite new to investing and so far my choice of stock is not impressive. Thanks

when is the result expected?

Another slow day..ZZZ

u think they will push this counter up before UMNO general election?

What do you think of the warrent..got chance to move up?

Everyone is on MAS today

need some big players to push up the price...;P

This share not much movement..why no one goreng?

Come on EPF... Buy more...better here than putting in penny stock
High risk.push up the price

Property and insurance spin off to MPHBCAP

Old one include gaming insurance and property. New one just purely gaming

need more volume to push the prices up and up!!

Moving up slowly...when is the company result coming out?

Stareit dividend ex date is 16/08/13..still got chance to enter to get the dividend for those who is still interested.

Dividend

Ex date is 16/08/2013...

well said Garfield...tomorrow holiday...so eveyone lighten up a bit....