MIDF Research advises investors to subscribe for Xin Hwa shares

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KUALA LUMPUR (June 17): MIDF Research has recommended investors to subscribe for the shares of Xin Hwa Holdings Bhd with a target price of 92 sen.

Xin Hwa is tentatively slated to be listed on the Main Market of Bursa Malaysia on June 30 with an initial public price (IPO) of 72 sen per share.

In an IPO note today, MIDF Research said Xin Hwa was a pure play integrated logistics service provider with an entrenched market position in Johor and Penang.

It said Xin Hwa was embarking on an exciting growth phase, adding 8% to its vehicle fleet and doubling its warehouse capacity.

“The company has a factory in Senai which is able to fabricate and customise used prime movers to cater to its clients’ needs and conduct repair & maintenance in-house.

“We recommend that investors subscribe for the IPO as it is attractively priced at only 8x FY14 PE, offering an upside of 31.4% based on our valuation pegged to 9x FY16 earnings,” it said.