Monday, May 28, 2012

Multi-Purpose Holdings: Maintain Buy - High Odds Of A Bright Future

All eyes on the demerger. Multi-Purpose Holdings' (MPHB) 1Q12 results were below expectations. We trim our FY12-14 earnings estimates by 5-10% p.a. and SOP-based TP by 2% to MYR3.87 to reflect stiffer competition. MPHB remains a high conviction BUY. Its recent proposal to demerge its gaming and non-gaming businesses will unlock value in the group. With 80% net DPR, the resulting MPHB (or Magnum) will also offer high dividend yields; we estimate a yield of 5.5% for FY13 based on MPHB's current share price.

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Source: Maybank Research - 28 May 2012

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