RHB Research starts Multi-Purpose Holdings (3859.KU) with an Outperform rating and a price target of MYR3.10, which implies P/E of 12.3X forecast CY12.
The house says it believes the company is a deep value stock at current prices; "at current market price, after deducting our estimated value of all of MPHB's other assets, we estimate that the market is pricing the gaming business at only 7X CY12."
The house says more rerating catalysts for the stock will be disposal of more of its non-core assets. It expects the company to deliver a 3-year earnings CAGR of 10.8%, with earnings driven by the gaming division, as well as lower interest expense after the partial repayment of its outstanding debt. The stock is up 0.8% at MYR2.59.
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