Sunday, October 21, 2007

Synergy `The Monster' Drive

On listing, Synergy Drive (which will be renamed Sime Darby) is expected to catapult immediately to the number one spot on the KLCI. RHB Research said, the plantations sector remains positive, and we expect the uptrend in plantation stocks’ share prices to be sustained.

A tentative fair value for Synergy Drive of RM10.15/share based on a straightforward consolidation of the earnings of the three groups under Sime Darby, Golden Hope and Kumpulan Guthrie, and imputing a target CY08 PER of 20x for the plantation earnings and 15x for the non-plantation earnings. This would imply a target market cap for Synergy Drive of RM61.9bn.

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