PETALING JAYA: BMS Holdings Bhd
, a retailer and distributor of tiles, stone surfaces, bathware and kitchenware, has been ascribed a 15 times price-to-earnings multiple on earnings for its financial year ending June 30, 2027 (FY27), giving its stock a fair value of 31 sen, analysts say.
RHB Research said this is underpinned by BMS’ high earnings growth with a three-year compounded annual growth rate of 19%, and consistent loss-free track record.
Key downside risks for the stock include foreign-exchange fluctuations, competition risks, a slowdown in the construction and property markets, and a rise in raw material prices, the research house said.
RHB Research said BMS plans to raise RM80mil from its upcoming initial public offering (IPO), adding that the proceeds will mainly be used to fund the expansion of its retail showrooms and distribution centre to reinforce its market presence in the Klang Valley.
A fast-growing retail network should drive retail sales, while Johor’s vibrant property market underpins its steady project sales growth, the research house added.
Its IPO valuation of 10.5 times FY27’s price-to-earnings is attractive versus the peer average of 15 times and the Bursa Malaysia Consumer Products & Services Index’s 17 times, on top of its loss-free cash engine business, RHB Research said.
With a track record of 32 years, BMS operates via an asset-light business model that forgoes capital-intensive manufacturing to focus on marketing, design, and distribution.
RHB Research said the company is a net importer, so the recent strength of the ringgit defends its margins without immediate price hikes.
It also noted that the company generates resilient, diversified revenue through a three-pronged approach of a core retail business (a cash engine, with sales growing constantly every year), wholesaling, and project sales.
The company, which is scheduled for listing on Dec 8, has its IPO shares priced at 22 sen apiece.
