Bison shares rebound on call upgrades

PETALING JAYA: Bison Consolidated Bhd saw its share price rebound from a five-month low after three brokerages upgraded their calls on the counter.

Shares of the MyNEWS.com chainstore operator rose 17 sen, or 7.73%, yesterday to close at RM2.37. This is following an upgrade in the recommendations on the counter by AmInvestment Bank Research, CIMB Research and Kenanga Research.

The brokerages cited Bison’s third-quarter earnings performance that came in within expectations and the fact that the counter had fallen by some 15% since announcing a private placement early this month as the basis of the change in their outlook on the company’s shares.

AmInvestment Bank Research, which raised its call on Bison to “buy” with an unchanged fair value of RM2.55, said the company had steadfastly delivered on earnings.

“We like Bison for its excellent execution track record and attractive three-year earnings compounded annual growth rate of 31% over financial years (FY) ended July 31, 2016, through 2019,” the brokerage said.

“It has the potential to enhance margins through its in-house food processing centre and greater economies of scale,” it added.

According to AmInvestment Bank Research, Bison’s share price decline following the announcement of a proposed placement exercise early this month had been overdone.

It noted that its fair value of RM2.55 for Bison was based on an unchanged 27 times 2018 estimated earnings, which was in line with 7-Eleven Malaysia Bhd’s historical valuations.

“Our fair value has factored in the impact arising from its corporate exercise, which dilutes FY18FY19 estimated earnings per share by 8%, given an enlarged share base of 10%,” it explained.