Yoma

Yoma: OCBC downgrades to Sell with $0.71 TP. House note no surprises in 3QFY13 earnings, although acknowledge that the macro outlook in Myanmar continues to be positive. Last Sunday, the World Bank announced a deal that would allow Myanmar to clear its outstanding debt to the World Bank and the Asian Development Bank, totaling about S$900m, which would allow new lending for the infrastructure growth, including electricity and ports. Also look forward to Yoma’s anticipated general meeting to approve the acquisition of the central Yangon site; the proposed 1-for-4 rights issue at $0.38 per share is conditional on this approval. Most positives priced in – downgrade to SELL Add that at current price levels, while acknowledge that the co holds meaningful franchise value as a leading developer in Myanmar, see most positives to be already priced in, even under our most optimistic assumptions. Downgrade rating on the co to a SELL based on a 12-month fair value estimate of S$0.71 (20% premium to RNAV), but caution that the anticipated 1-for-4 rights issue ahead would likely be supportive of the share price over the nearer term. Note that fair value estimate is a considerable 35% above the $0.525 per share paid by major investors who bought into the 192.9m-share private.