Indofood Agri: will go ahead with the spin-off/ IPO of main subsidiary, PT SIMP at an offer price of Rp 1100/sh, at the lower end of the earlier indicative pricing range of Rp 1060 – 1700 / sh.
Market may be disappointed with this outcome, particularly as the CEO had earlier indicated the pricing was low, and was considering whether to continue with the listing...
Goldman notes that based on Rp1100/share, the implied NAV for IFAR works out to ~$1.40/sh, vs last close at $2.04. Says the IPO could pose downside risks to IFAR’s earnings estimates through potential EPS dilution, as well as possible holding company discount. Points out that a similar holding co, JC&C, which owns Astra Intl, has a NAV discount that has historically averaged at 13%...
CIMB downgrades to Underperform from outperform, slashes TP to $1.94 from $2.73.
RBS has a Sell rating with TP $1.50.
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