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Tuesday, 11 December 2012

Analysts positive on TDC's share distribution plan

之前算的每股得到价值RM1.16 和33.2%回酬都是对的。但昨天市场只肯让Timecom升~RM0.50,可见现实跟期望的差别。看看今天表现将会怎样。

 
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By Adeline Paul Raj
Published: 2012/12/11


DiGi rose by just two sen, or 0.4 per cent, to RM4.86.

"We expect the exercise to give rise to an overhang on DiGi shares as the transaction involving 137.5 million shares works out to RM1.16 per TdC share, based on DiGi's last closing price, or 33 per cent of TdC's market capitalisation.

"While TdC did not reveal what it plans to do with the remaining 1.7 per cent stake in DiGi, we believe it would in due course look to monetise the shares held since 2008," OSK Research said in a report yesterday.

It kept its "neutral" call and fair value of RM5.00 on DiGi.

Bloomberg data shows that about half of at least 33 research houses that track DiGi have a similar "hold" recommendation on the telco's shares.

DiGi's share price surged to a record high of RM5.48 in October, but has since fallen back in line with a broad de-rating on the telco sector.

Conversely, of at least four research houses that track TdC, including OSK, three had a "buy" call on the stock.

The TdC exercise, which is part of an internal restructuring, will see it reward shareholders with six DiGi shares for every 25 TdC shares held.

The exercise by TdC, which has never paid out regular dividends, is expected to be completed by the first half of next year.

OSK liked the plan and said it was a "wise" move on TdC's part to reward its shareholders without being taxed.

It noted that TdC's share price had appreciated by more than 100 per cent over the past four years and that monetising those shares by selling them off for cash would have led to a reduction of shareholders' wealth as the gain would be taxed.

"We think that distributing a dividend-in-specie is the best way of maximising this portion of wealth to the benefit of TdC shareholders," it said in a separate report on TdC yesterday. It kept its RM4.98 fair value on TdC.

Hong Leong Investment Research said the exercise would yield "a massive" 33.2 per cent return assuming a one-time distribution. It kept his "buy" call and target price of RM4.66 on the stock.

"TdC's share price may pick up as its stake still make it a proxy to DiGi's strong operational and financial performance. DiGi's continuous stream of dividend income should also support TdC's share price," said HwangDBS Vickers Research.


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