Labels: colour 150c Consumer Sector , Del Monte Pacific Limited

Home Stocks Quote STI Components MSCI Singapore Sub-Sectors Indices S-REITs Commodities Offshore and Marine Property and Construction colour 150c Water Treatment Solution A - C Stocks Tools / Data Useful Tools Charting Tools Stocks Screener colour 150c Daily FX Updates Daily Equities Updates Corporate Action Today Company Announcements Stocks and Market Data ETFs Traded on SGX Weekly S-REITs Tracker Recently Declared Dividends SGX Marking of Short Sell Orders Reports Archive SGX Research OCBC Research SGX Brokers Highlights What's today news? Research Reports Library Fib Calculator Stocks Forum Contact me Sitemap
Recent weakness looks overdone; opportunity to accumulate . Since our recommendation downgrade on 25 Oct , DMPL ’s share price has dropped by >30%, possibly arising from the market’s concern on its proposed US$1.675bn acquisition of Del Monte Food’s Consumer Food Business (DMF-CFB). We believe the drop is overdone, and may present investors a window of opportunity to accumulate.
According to media reports, DMF-CFB has raised US$970m in LIBOR-based loans, which is higher than the US$930m previously indicated . Average blended interest rates, at this juncture, are at c.5.6%, lower than the 7.5% rate we had previously anticipated. The higher loan quantum also points to a lower amount of equity funds needed of US$110m (from US$150m). Based on our FY15F forecasts, we estimate that the acquisition should provide 12% EPS accretion to common equity holders.
We lowered our FY14F forecasts by 26%, taking into account an estimated one-off transaction cost relating to the acquisition, but have not factored in potential contribution from CFB . Our DCF-backed TP is lowered to S$0.82, with a higher WACC to factor in a higher level of uncertainty arising from the acquisition. That said, we believe the recent sell-off has more than priced in the uncertainty. At its current colour 150c price, we estimate the implied FY15F PE of the combined entity is at an attractive 9x. Upgrade to BUY for c.37% upside potential .
Labels: colour 150c Consumer Sector , Del Monte Pacific Limited
Baring to Schroders Avoid Singapore After Slump
 
Template Created by Creating Website Published by Mas Template Proudly powered by Blogger