KUALA LUMPUR: PublicInvest research is positive over Uzma Bhd
's conditional share sale agreement to acquire 15% of equity interest in Setegap Ventures Petroleum Sdn Bhd (SVP).
"We are optimistic over this development as it provides an opportunity for Uzma to have further control over the operations and business direction of SVP besides consolidating SVP’s earnings which we estimate could lift our FY19-21 earnings by an average of 4.4%, based on SVP’s balance orderbook in hand of RM700m which could last for five years," said the research house.
It said the transaction price of RM36mil for the 694,350 SVP shares is deemed reasonable with it being at the lower end of the value range in the indicative valuation report.
The indicative value for 100% equity interest in SVP was from RM237mil to RM259mil as at APril 30, 2018. The price tag represent 15.2x price-earnings, as compared to 11.7x during the previous acquisition in January 2015.
PublicInvest maintained its earnings forecast pending the 2QFY29 results due in February. It also retained its outperform call on Uzma and target price of RM1.52 with expectation for its earnings outlook to remain intact.
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