What’s New?
·Triple boosters. Since early April, Hafary Holdings (Hafary) has enjoyed three strong catalysts including: a) a second interim dividend of 1.5 S cents/share (post-split), b) a transfer to SGX Mainboard from Catalist, and c) 2-for-1 share split. Post the share split, our revised sum-of-the-parts (SOTP) target price is S$0.33/share, which implies an upside of 32.0%.
·Dividend bonanza. On top of its interim dividend of 1.25 S cents (adjusted for share split), Hafary has announced a second interim dividend of 1.5 S cents/share. This amounts to a total payout of 2.75 S cents/share (dividend yield: 11.0%) which has exceeded our full-year forecast of 2.5 S cents/share. Beyond FY13, we conservatively forecast the group to deliver dividends of 1.25 S cents/share each in FY14 and FY15, which implies a dividend yield of 5.0%. However, there could be upside if the group monetised the hidden value of its industrial properties.
·In the premier league now. Hafary recently secured the approval in principle for the transfer of its listing status from Catalist to SGX Mainboard. This is clearly positive as the stringent requirements of the transfer will help reaffirm the company’s attractiveness to investors. Interestingly, we did an analysis of stocks that transferred to SGX Mainboard and noted that they enjoyed an average gain of 16% in the three months after the announcement of a transfer.
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