Elite KSB: (The Edge)

Elite KSB: (The Edge) Soars after proposed disposal of meat-processing units, with DMG recommending a trading Buy on counter with $0.50 TP. Purchase price of $62m, represents a 33% premium over Elite KSB’s mkp cap, and is 11x grp’s earnings. Grp add that it future growth opps could not come through vertical integration which could only come through vertical integration and require large capex. Hence, co. chose to realise the full value of the meat processing business. Upon the completion of the sale, Co’s remaining business will include the rental income frm its investment ppty, a warehouse and dormitory and its investment business in Chinese feedmills. DMG note that stock is still attractive as the residual assets of industrial ppty and associate investments comes free aftrer netting out proceeds from the divestments of the food processing and distribution business.