Asia Development Bank will invest US$10m in Kina Securities by way of a placement at $1.37 a share. Morgans assesses the deal will strengthen the company’s banking relationships and provide access to ADB expertise.
A significant investment by an AAA-rated bank provides investors with greater comfort on the overall risk profile, the broker adds.
2019 and 2020 estimates for earnings per share are lowered by -3% and -7% respectively because of the dilution from the capital raising.
Add rating maintained. Target rises to $1.65 from $1.51.
Sector: Diversified Financials.
Target price is $1.65.Current Price is $1.48. Difference: $0.17 – (brackets indicate current price is over target). If KSL meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
