Primus Pacific Partners has lost its bid to stop the sale of EON Capital to Hong Leong Bank. This paves the way for the eventual completion of its merger with EON Capital. The deal is value accretive on all fronts, even before factoring in any form of merger synergy and its completion now hinges on Primus’ final appeal. The group’s favorable loans to deposit ratio coupled with the enlarged distribution channel post merger will provide scope for growth to surprise on the upside. Rolling forward our valuations to FY12, we are raising our fair value to RM11.60, implying a 2.26x FY12 PBV, underpinned by the following assumptions: 15.3% ROE, 9.2% COE and 4.0% long-term growth rate. We are thereby upgrading our recommendation from Trading BUY to BUY.
No comments:
Post a Comment