Our recent meeting with MPHB revealed that the disposal of Menara Multi-Purpose may be in the cards. Apart from paring down the RM750m loan taken to fund the buyout of Magnum’s minority shareholders, part of it could be kept for the distribution of dividends, potentially paving way for positive dividend surprises. Using SOP valuation, we arrive at an RNAV of RM4.00/share, more than half of which comes from the gaming division. The stock is trading at a 26% RNAV discount that could narrow over time, especially now that it will be predominantly driven by its cash-cow NFO business. Applying the typical 10-20% discount accorded to holding companies, we estimate that MPHB could be worth RM3.20-3.60. This implies 8-21% upside from current levels.
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