Friday, July 26, 2013
Hisaka : Sias maintains at Buy with TP $0.315. Hisaka entered into a MOU for the reverse takeover (RTO) of Temasek Regal Capital, a Msian property and construction company. Sias believes the transaction raises the promise of higher group profitability as the core semiconductor business has been weak. Notes the consideration of $127m for Regal would generate a slight premium to Hisaka’s book value per share of $0.243, raising it to ~$0.283 per share post issue of new shares. Further more, the consideration includes a significant discount on the RNAV of Regal, hence there is potentially further upside to be realized upon completion of the RTO. Established in 2005, Regal has completed various devts predominantly in Kuching, Sarawak. Regal has at least 10 on-going projects with a total of about 1,753 units of houses, apts and shop houses in progress.