We are positive on SKP’s proposal to acquire sister company Tecnic
Group. Postacquisition, SKP will emerge as one of the largest plastic
manufacturing companies in Malaysia. We expect SKP to achieve 58% yoy
growth in FY16, should the acquisition be completed by the targeted Mar
15. Meanwhile, we believe SKP is in good stead and could secure new
contracts with significant value, which will be its next key catalyst. A
much larger earnings pool and growth visibility through FY18 will allow
SKP to graduate into a mid-cap that typically commands better
valuation. Maintain BUY with a higher target price of RM0.83.
Source: UOB Kay Hian Research - 3 Oct 2014
Source: UOB Kay Hian Research - 3 Oct 2014
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