Yoma

Yoma: is acquiring the land devt rights for a site in downtown Yangon via a 80% stake in Meeyahta International Hotel. The site will be turned into an integrated development comprising residential, retail, hospitality and commercial property. To fund the 80% share, a 1-for-4 rights issue to raise more than $91.2m is proposed. DBSV notes that this project will generate long term recurring income from the hotels/service apartments/office even though it’s aggressive in scale and costs. The house has not factored in potential dilution from the rights issues at this juncture. Based on its proforma estimates, the rights issue could dilute RNAV to $0.72 (from $0.80). The house maintains Buy with TP $0.79 or theoretical ex-rights price of $0.72. The stock price has risen tremendously in the past 3 months, coming from $0.375 to the current $0.65. DBSV says technically, further upside from here is likely capped at $0.72 (prior to ex-rights adjustment).