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Friday, September 13, 2013

Kenanga Research raises Censof to "Outperform" (Star)

Kenanga Research has raised its rating on Censof to “Outperform” with a target price of 61 sen after it bagged the 45.03% stake in Time Engineering (TEB) held by Khazanah.

On Friday, Kenanga said upon completion of the RM69.82mil acquisition, Censof would emerge as the new controlling shareholder in TEB and would be obliged to extend a conditional mandatory general offer to other TEB shareholders for a cash offer price of 20 sen per share.

“We are positive on the proposed acquisition where we believe massive synergistic benefits could be created for both parties,” it said.

Kenanga added should the proposed acquisition be concluded by year-end, the enlarged Censof's forecast net profit for financial year would increase to RM22.2mil from the current forecast of RM15.4mil based on existing activities.

“This will boost our target price to 80 sen,” it said.

It added Censof believes that the proposed acquisition will not only allow the group to expand its business but also to leverage on TEB’s resources and infrastructure to create strategic benefits.

“Apart from the products' services synergies, the enlarged group could also potentially benefit from an enlarged client base, better system integration and economies of scale,” it said.

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