Japfa - Application To List China Dairy Business
- Japfa announced that its China dairy business, AustAsia Investment Holdings (AIH), has submitted an application to list on the Hong Kong Stock Exchange.
- We believe that Japfa (SGX:UD2) could crystalise AIH’s total equity valuation of US$1,168m, which we derive from the sale of a 12.5% stake in AIH to private companies Genki Forest Technology Group Holdings, Honest Dairy Group Co. Ltd, and GGG Holdings Limited undertaken by Japfa in FY21. The listing could realise a valuation of up to US$730m (at 62.5% stake in AIH).
- Upgrade Japfa to ADD with target price of S$0.81 on change in valuation method. We switch our valuation method from P/E valuation to SOP as we believe the potential listing of AIH could be value-unlocking for shareholders.
- Our SOP valuation consists of S$0.48/share for AIH, benchmarked to Japfa’s sale-of-stake transactions in FY21, as well as 6x FY23F P/E, about 0.5 standard deviation below its 5-year historical mean, for the remaining animal protein business.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
TAY Wee Kuang CGS-CIMB Research | https://www.cgs-cimb.com 2022-03-31 2022-03-31
Read also CGS-CIMB's most recent report:
2022-11-02 Japfa - No Reprieve From Margin Compression
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