LOTTE Chemical Titan Holdings Bhd is worth RM1.22 more than its “revised” initial public offering (IPO) price of RM6.50 per share, says Public Investment Bank Bhd.
The research house has put Lotte Chemical Titan’s fair value at RM7.72 and is bullish about its outlook.
The firm said Lotte Chemical Titan’s final offer price of RM6.50, from previously between RM7.60 and RM8 an IPO share to both institutional and retail investors, makes it attractive.
“We believe that at the new final price of RM6.50, Lotte Chemical Titan’s growth is attractive, reflecting a 10.1 times price to earnings of our financial year 2018 estimates.
“This is further sweetened by the potentially higher dividend yield of 6.6 per cent (previously 5.2 per cent),” said PublicInvest in a report yesterday.
Lotte Chemical Titan has reduced the number of share issuances by almost a quarter from the initially planned 740.5 million.
The IPO now involves 580 million new shares, raising RM3.77 billion.
The revised share price would raise about RM2 billion less from earlier expectations.
However, it will still be the biggest listing in Malaysia since 2012.
The new shares would increase Lotte Chemical Titan’s issued base shares to 2.31 billion units upon listing, which is slated on July 11.
Based on the IPO price of RM6.50 and expanded shares, the company will have a market value of RM15 billion.
Meanwhile, Maybank Investment Bank Bhd, which is the stabilising manager for the IPO, said Lotte Chemical Titan shares may be subject to stabilising action.
It might buy up to 27.77 million Lotte Chemical Titan shares to stabilise the stock’s price, according to a Maybank IB notice filed by Lotte Chemical Titan to Bursa Malaysia yesterday.
Maybank IB said the stabilising action shall be the earlier of the 30 days when the shares start trading or the maximum of 27.77 million shares, which is about 4.8 per cent of the shares offered under the IPO.