PETALING JAYA: Rhone Ma Holdings Bhd
, an end-to-end animal health solutions provider, has been given a fair value of RM1 by JF Apex Securities.
Rhone Ma’s initial public offering (IPO) is priced at 75 sen apiece and the company is expected to be listed on the Main Market of Bursa Malaysia on Dec 19, 2016.
“We derive a fair value of RM1 for Rhone Ma. Our fair value renders 33% upside from the listing price of 75 sen,” JF Apex said.
The research house explained that its valuation was pegged at 12 times FY17 earnings per share (EPS) forecast of 8.4 sen.
“Our target PER assigned is at the higher range of valuation for small cap stocks. We feel the valuation is fair given its favourable position in the animal health and nutrition market with 5.9% market share. Rhone Ma is also a dominant player among 80 members that participated in the Malaysian Animal Health and Nutrition Industries Association,” it added.
Through the IPO exercise, the company intends to raise some RM31.59mil, of which about 78% would be utilised for capital expenditure, about 7% for working capital and the remaining for defrayment of listing expenses.
Rhone Ma’s IPO exercise entails a public issue of 42.122 million new ordinary shares, of which 8.3 million shares will be made available for the public, 7.822 million shares for eligible directors, employees and business associates of the group, 16.6 million shares available by way of private placement to Bumiputera investors approved by the International Trade and Industry Ministry and remaining 9.4 million shares available by way of private placement to selected investors.
JF Apex said Rhone Ma’s main strength lies on the ability to provide end-to-end animal health solution to the customers via their Total Solution Provider (TSP) programme.
The group is able to customise animal health solution to address the problems and meet the needs of customers via this programme. This would suit convenience of customers and provide faster and more reliable services.
The research house said since the establishment of Rhone Ma’s in-house research and development centre, the group has successfully developed 11 pharmaceuticals and 13 feed additives. Also, the group is able to respond faster to the changing customer preferences and new market developments.
It added that the group has an extensive range of animal health products which consist of more than 300 types of products including vaccines, pharmaceuticals and feed additives for livestock and companion animals. In addition, they offer extensive range of technical services comprising veterinary advisory and diagnostic laboratory analysis.
“The animal health and nutrition market in Malaysia is a vital part of the growing livestock industry. Thus, the demand for Rhone Ma’s products and services is mainly contributed by the growth in livestock industry. The industry has registered an increase in production value of CAGR 9.9% from 2009 to 2015,” JF Apex said.
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