Hwang-dbs Maybank (RM8.63; Buy; Price Target: RM10.80; MAY MK)

MGO for Kim Eng shares
Maybank made an unconditional mandatory offer to buy the
remaining shares in Kim Eng Holdings Ltd (KEH) for S$3.10
(RM7.53) per share. After acquiring the stakes from Ronald Ooi
(15.4%) and Yunta Securities (29.2%), and an additional 6%
from the open market, Maybank owns 50.6% in KEH. We
understand that Maybank intends to privatise KEH upon the
successful mandatory offer and the total cost is estimated at
RM4.3bn.
Maybank is exploring the options available on KEH’s two listed
subsidiaries in Thailand and Philippines i.e. Kim Eng Securities
Thailand (KEH owns 55.3%) and ATR Kim Eng Financial Corp
(KEH owns 42.4%). If Maybank were to privatise the two listed entities, it will cost approximately RM1.1bn (based on their
existing market cap).
We continue to favour Maybank’s multi-year growth story in
Indonesia and its regional expansion plans. Maintain Buy and
RM10.80 TP.