Hi-P International - Maybank Kim Eng 2020-12-20: Take The Offer; BUY Frencken, UMS, AEM & Venture Corp

HI-P INTERNATIONAL LIMITED (SGX:H17) | SGinvestors.io HI-P INTERNATIONAL LIMITED (SGX:H17)

Hi-P International - Take The Offer


Privatisation offer by chairman

  • Hi-P International (SGX:H17) received a privatisation offer by its chairman at S$2.00 per share, which is 10.5% above last traded price of S$1.81 before the announcement, and 62% above our target price.
  • We recommend minority investors to take the offer, as valuation appears attractive at 15.3x FY21E P/E, vis- à-vis 5 year average forward P/E of 10x and SG peers at 12.7x FY21E P/E.
  • As we believe current Hi-P International share price fully reflects the fundamental value of the company, we Downgrade Hi-P International to SELL from BUY with unchanged ROE-g/COE-g target price of S$1.23 (1.4x FY21 P/B).






Transaction rationale

  • The offeror is YHT Venture, wholly controlled by chairman and CEO Mr. Yao Hsiao Tung. YHT Venture has irrevocable undertakings of 83.5%. The offeror’s intends to delist Hi-P International and the rationale for the bid are
    1. greater management flexibility; and
    2. no need for Hi-P International to access Singapore capital markets in the foreseeable future.
  • The offer price is 42% above 3-month VWAP of S$1.405.


Deal metrics


Reiterate BUYs on Frencken, UMS, AEM, and Venture Corp






Gene Lih Lai CFA Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2020-12-20
SGX Stock Analyst Report SELL DOWNGRADE BUY 1.230 SAME 1.230



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