Friday 29 Mar 2024
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KUALA LUMPUR (Nov 12): Sportswear manufacturer Cheetah Holdings Bhd rose as much as 3.5 sen or 6% to 58 sen after Insider Asia said the stock was undervalued.

Cheetah had subsequently reduced gains. At 12.30pm, the stock settled at 56.5 sen with some 185,600 shares changed hands.

According to Insider Asia's report, Cheetah shares were traded at a “huge discount” of 49% to its book value of RM1.05 as at end-June 2014. The stock traded at a trailing 12-month price-earnings ratio (PER) of 9.4 times.

Insider Asia's report, which is published in The Edge Financial Daily today, indicated that Cheetah's valuations were at a steep discount to its peers and its own underlying asset value.

Insider Asia said this suggested that no value had been accorded to Cheetah's brands.

Insider Asia said in comparison, Padini Holdings Bhd was traded at 3.1 times book value and a trailing 12-month PER of 13.2 times. Bonia Corp Bhd trades at 2.6 times book value and a PER of 16 times.

“There is little doubt that Cheetah is far less aggressive than Padini or Bonia, and its financial trends have been declining. Nonetheless, the company is still profitable, cash rich and may represent a value play,” said Insider Asia.

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