The fair value only takes into consideration Avarga’s “crown jewel”, the 70.8%-owned Canadian-listed building material distribution company – Taiga Building Products. It does not include the value of the company’s paper manufacturing and power plant businesses, which puts Avarga’s valuation “on the conservative side”, says the team.
The Singapore research team at KGI Securities has given Avarga Limited a fair value of 43 cents in an unrated report dated August 26.
The fair value, which is deemed as the “minimum” for the company, utilises a 10x FY20F price-to-earnings (P/E ratio), which is based on the company’s three-year historical average.
