Our checks with Muhibbah confirmed yesterday’s news on the lifting of APH’s receivership status. This was a positive surprise to us and a huge relief to its contractor, Muhibbah as it increases the odds of recovery of the RM371m owed by APH and suggests that there may be a resolution soon. This news comes at an opportune time as Muhibbah is a bottom-fishing candidate since it is trading below our worst-case value of RM1.28. We should see some clawing back of its share price which has been a casualty not just of the global stockmarket rout but also the APH problems. We make no changes to our EPS forecasts, TRADING BUY stance and RM1.83 target price pegged to an unchanged 40% RNAV discount. This news is a rerating catalyst, triggering a 9.4% rebound of the stock yesterday.
Wednesday, August 10, 2011
MUHIBAH - APH receivership status lifted (CIMB)
Our checks with Muhibbah confirmed yesterday’s news on the lifting of APH’s receivership status. This was a positive surprise to us and a huge relief to its contractor, Muhibbah as it increases the odds of recovery of the RM371m owed by APH and suggests that there may be a resolution soon. This news comes at an opportune time as Muhibbah is a bottom-fishing candidate since it is trading below our worst-case value of RM1.28. We should see some clawing back of its share price which has been a casualty not just of the global stockmarket rout but also the APH problems. We make no changes to our EPS forecasts, TRADING BUY stance and RM1.83 target price pegged to an unchanged 40% RNAV discount. This news is a rerating catalyst, triggering a 9.4% rebound of the stock yesterday.
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