Tambun Fair Value/Target Price and Dividend Yield


Tambun Indah Land is a property developer based in Penang and it was listed on Main Market on 18th January 2011 at an IPO price of RM0.70. On listing day, share price hits RM0.865 but since then the price dwindling down to below its IPO price. On 23rd March 2011, share price close at RM0.675.

Fair Value/Target Price for Tambun by two research houses, RHB Research & Jupiter are at RM0.81 and RM0.95 respectively. However, the forecast may be not so accurate for a newly listed stock.

One interesting fact about Tambun is, they expected to pay high dividend to the shareholders. From IPO prospectus, Tambun have a dividend payout ratio policy in between 40% to 60% of the net profit.

For financial end 31st December 2010, Tambun recorded a net profit of RM25.374 million. At 40% dividend payout, it translate to dividend yield of 6.75% based on share price of RM0.675. At 60% dividend payout, the divided yield is whopping 10.13%. Hopefully, they pay as promised and pay dividend for financial year end 31st December 2010 soon.

Tambun’s Earnings per Share (EPS) is stand at 98 sen while PE ratio is only 5.88 times. RHB Research expects Tambun net profit to growth at 10% for 2011 and 11% for 2012. Tambun is at net cash position.

Another interesting fact is Tambun’s Managing Director, Teh Kiak Seng steadily buying shares from open market since January 2011. His direct holdings grows from 5.1 million shares (2.31%) on 28th January to 6.2 million shares (2.82%) on 7th March. His indirect shareholdings stand at 89.25 million shares (40.38%).

What do you think about Tambun? Is it worth to buy?

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