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Published: Monday December 10, 2012 MYT 8:41:00 AM
KUALA LUMPUR: CIMB Equities Research has reduced its target price for Bintulu Port cut by 2% to RM7 while it retains the Neutral call.
The research house said on Monday Bintulu Port appointed two investment banks to raise cash from a debt issuance and up to a 15% share placement to fund construction of the new Samalaju Port.
"We estimate a 20-37% dilution of our FY13-14 EPS numbers, assuming interest expenses are not capitalised. This fund raising exercise could see our target price cut by 2.7% to RM7, but not change to our Neutral call," it said.
CIMB Research said pending further details of the exercise, it maintained an unchanged discounted cashflow-based (WACC 8%) target price.
"The stock is supported by its dividends, although this exercise may result in an overhang. We prefer Malaysia Airports," it said.
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