Excerpt from Kim Eng Research’s 2010 Strategy Report…..
In the small cap space, we have identified potential multi-baggers – AsiaTravel, BreadTalk, CWT and Design Studio.
On their own, these companies are in a sweet spot to enjoy robust growth in tandem with the regional economic recovery. On top of that, each of them offers appealing M&A possibilities, which could unlock their intrinsic value, to the extent of a multiple of their current market capitalisation!
| Last price | Market cap | EPS growth 09F (%) | EPS growth 10F (%) | PER 09F | PER 10F | Dividend yield 09F | |
| AsiaTravel.com | 64 cts | 135.9 m | (6.9) | 37.0 | 23.7 | 17.3 | 3.6 |
| BreadTalk | 60 cts | 140.9 m | 36.4 | 20.0 | 13.3 | 11.1 | 1.5 |
| Design Studio | 57.5 cts | 146.7m | 112.0 | 23.6 | 5.4 | 4.4 | 5.6 |
| CWT | 73 cts | 419.2 m | 26.5 | 19.4 | 11.8 | 9.9 | 2.7 |
Source: Kim Eng Research Dec 28
| 12-mth target price(S$) | Best case scenario (S$) | Assumptions for the best case scenario | |
| AsiaTravel.com | 0.81 | 1.52 | Based on the upper end of the stock’s PE-band of 20x and factoring in potential earnings from the Spore IRs. |
| BreadTalk | 0.86 | 1.27 | Derived using the replacement cost analysis for its global network of F&B outlets. |
| Design Studio | 1.00 | 1.40 | Based on DCF valuation, assuming earnings reach a sizeable $50m per year. |
| CWT | 1.11 | 1.52 | Pegging commodity logistics earnings to 20x PER;Sale-leaseback of Commodity Hub and Cold Hub. Estimated gain of $0.20 to be distributed to shareholders. |
Source: Kim Eng Research Dec 28
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ASIATRAVEL.COM: Strong growth ahead
CWT: Asia’s No.1 freight forwarder sees higher NVOCC demand
DESIGN STUDIO, KS ENERGY, SUNTEC REIT: What analysts now say.....
DMG & Partners says OCEANUS TDRs oversubscribed by 15-20X
Scoop of the Day: The ongoing talks about Oceanus’ Taiwan listing is coming to an end as the 200m TDRs (100m new shares and 100m vendor shares) are expected to be listed on the final day of 2009 on TaiEx.
Early signs look good for Oceanus’ Taiwanese investors as the lead underwriter, Polaris Financial Group, mentioned that the TDRs were over-subscribed by about 15-20 times – the most enthusiastic amongst the four TDR-listings underwritten by Polaris.
The TDR issue is priced at approximately S$0.415. A basket of Chinese consumer stocks listed in Taiwan has more than doubled this year, which bodes well for Oceanus’ listing. While the TDRs are not fungible, there should be some positive spillover in terms of sentiments. We have a BUY on the stock with a TP of S$0.515.
