“On an ex-cash basis, it trades at a mid-single-digit forward P/E, which appears undemanding relative to consensus growth expectations. As earnings improve and capital returns become clearer, valuation focus may increasingly shift towards ex-cash metrics,” says Jaiswal.
Hong Leong Asia is “undervalued” on an ex-cash basis, says RHB Bank Singapore analyst Shekhar Jaiswal in an unrated Dec 16 report.
While the company’s headline P/E multiple appears elevated, the metric overstates the company’s true valuation due to its large net cash balance, which is around 58% of its market cap.
