$CCK / 7035 (CCK CONSOLIDATED HOLDINGS BERHAD)
Research by PIB
Underperform – TP of MYR 1.20

“Proposed Investment in Subsidiary ”

CCK announced that it entered into a binding term sheet with Astrantia SB, a SPV by Creador SB for the proposed investment in CCK’s subsidiary PT Adilmart (Adilmart). Astrantia is proposing to acquire a total of 40% stake in Adilmart for a total of RM170.3m. The proposed acquisition will be satisfied via the purchase of existing shares and subscription of new shares. We are keeping our earnings estimates unchanged at this juncture, pending further clarity on the proposed investment. While we are positive that the proposed investment would drive further growth in CCK’s Indonesia operations, we believe that its share price has already captured this potential growth. CCK is currently trading at a premium valuation, +1SD of its 5-year average forward PE. Given the limited upside potential, we downgrade our call on CCK to Underperform. As we rollover our valuation base year to FY25F EPS, our TP is revised to RM1.20.

Analyst(s):
Wong Ling Ling
wong.lingling@publicinvestbank.com.my