Senheng’s Target Price At RM1.21 : TA Securities

TA Securities has placed an RM1.21 target price on Senheng New Retail Bhd’s IPO, above the RM1.07 issue price, on a robust store expansion plan compared to Malaysian retailers.

TA Securities said that at an IPO price of RM1.07/share, SenHeng is priced at a trailing PER of 28.8x CY20 earnings. We value the company at 20x CY23 EPS, arriving at a fair value of RM1.21/share.

The stockbroking house said that among the competitive advantages of the stock was that it was a leading Malaysian consumer electrical and electronic retailer,recognised retailer with wide product range; efficient centralised Logistic Model; and pursuit of Seamless Experience.

TA said among the key risks relating to business and industry was the resurgence of Covid 19 cases and possible lockdown that may adversely affect business performance, competition from existing players, and inability to secure new profitable stores for expansion.

Senheng is expected to list on the Main Market of Bursa Malaysia on 25th Jan 2022 is offering 30 million shares for the Malaysian public, 22.5 million shares for eligible persons, 149.5 million shares by way of private placement to selected investors, and 187.5 million shares by way of private placement to identified Bumiputera investors approved by MITI.

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