KUALA LUMPUR (May 7): Brahim’s Holdings Bhd share price trends higher today despite the delay in the conclusion of the negotiations for a new catering agreement with Malaysian Airline System Bhd (MAS).
HLIB Research comments on its note today that it is optimistic that there could be another extension agreement for both parties to negotiate and conclude the new catering agreement, with a common goal to expedite the signing.
“At 90sen, Brahim’s is trading at 0.87 times price to book (P/B) of 19% below its 10-year historical average P/B of 1.07 times and 66% below its closest peer’s SATS Ltd P/B of 2.55 times.
“We think such steep discounts would have provided a sufficient margin of safety and cushion further share price decline,” added HLIB Research.
As at 11.30am, Brahim’s (fundamental: 0.35; valuation: 1.2) share price is at 94 sen, up four sen or 4.4% with only 738,200 shares traded.
HLIB recommends its clients to accumulate Brahim’s shares as its value emerges.
“A decisive breakout above 95sen will spur prices higher towards RM1.04 (38.2% Fibonacci Retracement (FR) and latest book value/share) and our long-term objective of RM1.11 (50% FR). Cut loss below 81sen,”said HLIB.
The Edge Financial Daily, quoting a source familiar with the deal, reported today that the terms of the agreement are still not finalised, and that the companies are unlikely to make any announcements on the matter this week.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)