IHH Healthcare was one of the most wanted IPO in 2012.
While there are many criticism that this IPO have very high PE Ratio, the demand for the IPO was very good. The institutional portion of the initial public offering has been oversubscribed by more than 100 times by 22 cornerstone investors.
On the retails front, the final date to apply for this IPO is today, 11th July 2012. For those who are still undecided, you may want to look at Target Prices / Fair Value of IHH Healthcare & make your decision. The dateline is until 5pm today
Various research houses give early target or fair prices for IHH Healthcare ahead of the listing date of 25th July 2012. All of them generally targeted higher than IPO subscription prices of RM2.85 per share. However, the target price is only marginally higher than IPO price unlike FGVH which listed last month.
The table below is the compilation of target price / fair value from various research houses.
| No | Investment or Research Companies | Target / Fair Price (RM) |
|---|---|---|
| 1 | ECM Libra | 2.94 |
| 2 | Hong Leong Investment Bank | 3.49 |
| 3 | JF Apex Securities | 3.00 |
| 4 | Public Investment Bank | 2.98 |
| 5 | TA Securities | 3.33 |
If you have target price / fair value from another brokers, kindly leave your comment.
I read through the public investment bank report, I think there is one problem.
When they are doing the forecast for 2012, 2013 … … They did not consider the utilisation of IPO proceeds when forecasting for the income statement and balance sheet in coming years. IHH will use 4,663m (or 90.3%) from IPO to pay down the debt. The debt will be decreased to from 10,880,6m to 6,217.6m.
This means IHH will likely to pay less in “financial costs” in income statement. In 2013, the financial costs will down 40% (roughly estimated is 40m) in income statement. The net profit likely will increase by same amount (assuming no growth in revenue).
Correct me if I were wrong.
Goh,
Yes you are right. I did the same consideration/calculation like you did but i’m expecting others can give comment on this too.
40m savings over larger shareholders funds doesnt translate much
IHH Healthcare Bhd’s institutional price, retail price and cornerstone price were has been fixed at RM2.80 per share following the completion of the bookbuilding under the global institutional tranche.
Maybank Investment Bank has not published their report/valuation. Where do you get the RM2.95 target price for Maybank?
I get from another website. If it is not true then I will remove it.
May I ask which website is this? Thanks!
Sorry, I can’t remember which one.