RHBCAP & OSK MERGER : TARGET PRICE > RM2.00 ?

Compared to previous stockbroking merger cases, the take over price ranging from 0.69x-2.32x (average of 1.2x) of their price to book value.  OSK definitely can command higher price to book value based on following :-

1. With regional present in Hong Kong, Singapore, Indonesia, Thailand and Cambodia.
2. Holding commercial banking license in Cambodia- OSK Indochina Bank Limited.
3. Strong Investment Banking background and retail clientele.

Latest book value per share = RM1.57,
Potential upside relatively to the potential merger price that may taken place:-

		Upside
Price to	Valuation	Based on Current Price
Book Value		RM1.60
1.00	1.57	-
1.10	1.73	7.9%
1.20	1.88	17.8%
1.30	2.04	27.6%
1.40	2.20	37.4%
1.50	2.36	47.2%
1.60	2.51	57.0%
1.70	2.67	66.8%
1.80	2.83	76.6%
1.90	2.98	86.4%
2.00	3.14	96.3%
2.10	3.30	106.1%
2.20	3.45	115.9%
2.30	3.61	125.7%

IF merger take place at above 1.5x of the book value, OSK will be valued @ at least RM2.36 and above. Provide minimum  47 % upside during this uncertainty market condition.

IF you are looking for stock that provide minimum downside during this uncertain market, OSK maybe a good choice for you.

GOOD LUCK!