INVESTORS and analysts were generally bullish on Petronas Chemicals Group Bhd's (PCG) listing on Bursa Malaysia tomorrow 26 November 2010, saying Southeast Asia's largest initial public offering (IPO) to date will hold its ground although tension in the Korean peninsula continues to threaten.
Research Companies and
the Target Price (RM):
Mayban Inv- 6.70
CIMB Inv- 6.70
JF Apex- 5.70
OSK- 5.51 BUY
PETRONAS CHEM SHARE WORTH RM6.64-RM6.70
Maybank IB Research believes the share prices for Petronas Chemicals Group Bhd (PCG), worth between RM6.64 and RM6.70 per share, using discounted cash flow and price earning ratio (PER) valuation metrics.
PCG enroute for listing tomorrow is Southeast Asia''s biggest initial public offering (IPO), set to outshine that of other big-capitalised firms on Bursa Malaysia Securities.
The company's retail IPO price of RM5.04 is very attractive with deep discounts compared with global peers: one year forward PER and enterprise value/earnings before interest, taxes, depreciation, and amortisation is 24 per cent and 53 per cent lower.
The research house said the listing was a new big show and a golden opportunity not to be missed.
It said the petrochemical industry is in the recovery stage of a cyclical uptrend; 2009 was the last trough, the next boom would be in three to five years.
"Product volume growth to GDP correlation is 1.0 to 2.0 times, positive for PCG as its customers are in the high growth Asia-Pacific region," it said.
Maybank IB Research also said in the next upcoming cyclical peak, within the next five years, PCG is likely to surpass its previous net income record of RM3.9 billion achieved in financial year 2008. - Bernama