Yeo HS

Yeo HS - No co. specific news to explain its jump in share price today, although volume is still relatively thin with 100 lots traded. Latest news on the coutner was its qtrly results releasd on 24th April, which saw net profit slummping to $15.5m, -69% y/y. While coverage on the counter has generally been very limited, recall last year Maybank-KE initaited coverage on the counter, citing YHS's catalysts such as the amassed a huge landbank/property portfolio, especially in Malaysia where it owns over 2m sq metres of land area, where house see hidden value in these lands which are often difficult to value. This treasure trove, currently worth at least $250m, may eventually be monetised via FEO’s other arms. House had also note that YHS has an agreement with PepsiCo that gives the latter a right of first refusal to buy YHS, its distributor and manufacturer in Singapore. However, as seen in the Asia Pacific Breweries saga, this does not preclude a bidding war that could well drive up YHS’s share price in excess of our SOTP-based target price of SGD2.25, which includes SGD0.435 per share of cash proceeds from the Jardin project. An improvement in free float from 15% to 29.5% post-restructuring will likely lift valuations over the long term too. We initiate coverage with a Buy recommendation.