KAF EQUITIES MAINTAINS 'BUY' FOR IPMUDA, HIGHER TP OF RM2.32
KUALA LUMPUR, Oct 21 -- KAF Equities Sdn Bhd has maintained its 'buy' recommendation on Ipmuda Bhd, a building materials trading company, with a higher target price (TP) of RM2.32 from RM1.60 previously.
This was following the company's completion of land disposal where part of the proceeds will be used to pare down bank borrowings.
In a research note, the local brokerage firm said it has also removed the previously attached discounting factor to account for the risk of construction delays for Telekosang Hydropower Plant (THP).
"THP is scheduled to be completed and commissioned by the end of the year. We expect Ipmuda to announce entitlement dates of proposed bonus issue, warrants and rights issue within the next one or two months following a recent Bursa Malaysia’s approval.
"While these will result in share dilution, we are unfazed as the group targets to complete three value accretive acquisitions by second quarter (2Q) 2022. From thereon, we only see upside as the acquisitions should drive the group’s turnaround story," it said.
Ipmuda is expected to complete the acquisition of Ohana Specialist Hospital in 4Q 2021 and subsequently followed by the acquisitions of Telekosang Hydropower Plant (THP) and solar farm in 2Q 2022.
"We expect these key assets to steer the group to the black with RM18 million profits in financial year (FY) 2022 before increasing by 74 per cent in FY23," said KAF Equities.
As at 10.48 am, Ipmuda's shares rose 10 sen to RM1.65 per share, with 1.75 million shares transacted.
-- BERNAMA
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