TA Securities values Senheng at RM1.21

TA Securities values Senheng at RM1.21
-A +A

KUALA LUMPUR (Jan 6): TA Securities has valued Senheng New Retail Bhd (Senheng) at RM1.21 and added that at an IPO price of RM1.07, the consumer electrical and electronics retailer is priced at a trailing price-earnings ratio of 28.8x CY20 earnings.

In a note on Thursday (Jan 6), TA Securities estimated Senheng to record earnings growth of 11.8%, 24.5% and 17.7% to RM62.2 million, RM77.4 million and RM91.1 million for FY21, FY22 and FY23 respectively.

TA Securities said this shall be supported by top-line growth resulting from the expansion of large-format stores and sales traction over its online platform.

The research house added that its projections are premised on the assumptions below:

1) FY21/22/23 new large-format stores openings (inclusive of Grand Senheng Elite, Grand Senheng and Grand senQ) of 12/19/18 units alongside net reduction in small-format stores (inclusive of Senheng, senQ) of 10/9/6 units.

2) Online sales compound annual growth rate of 13% during FY20-23.

3) Slight pick-up in gross profit margin towards 21.6% in FY23 from 20.9% in FY20 owing to economies of scales.

Senheng is slated for listing on the Main Market on Jan 25, 2022.