SINGAPORE (Nov 8): RHB Research is maintaining its “buy” call on Moya Holdings Asia, with a lower target price of 11 cents compared to 15 cents previously to factor in further depreciation of the IDR as well as macroeconomic uncertainty.
In a Monday report, analyst Jarick Seet says he continues to see strong organic growth for Moya based on its latest set of 3Q earnings which reflected lower financing costs, concessions and recovery of its non-revenue segment.
He also expects full-year accretion from acquatico as well as additional accretive acquisitions in the pipeline to boost the group’s net profit going forward.
Moya, which is in the midst of extending its Acuatico concession with the Indonesian government, is expected to commit a certain capex for a new plant and to reduce its NRW by 20% over the next 5-10 years, while eventually ceasing to handle the customer service segment or collection of water tariffs from the end consumer.
In Seet’s view, the resultant increase in volume from this extended concession would offset the reduction of water tariffs, which would eventually leave the group’s EBITDA unchanged.
“We understand [Moya] is in the midst of negotiating with a few parties, and management is optimistic for one acquisition to be completed by end-2018. Based on its track record, we expect the acquisition to be accretive, and will likely provide another boost for FY19F PATMI,” says Seet.
As at 11.08am, shares in Moya are trading flat at 7.1 cents or 1.22 times Dec-18F book value.
