CAN-ONE (Fundamental: 1.1/3; Valuation: 1.2/3) saw its share price rise 9.8% to RM2.90 yesterday on heavy volume.
The stock appears cheap from a break-up value perspective. Its 32.9% stake in Kian Joo, worth RM454.5 million at current price of RM3.11, is more than its current market capitalisation of RM442.0 million.
In 2013, Can-One proposed to sell its stake in Kian Joo to Aspire Insight for RM1.47 billion or RM3.30 per share. However, the sale has been tied up by legal suits. The offer price is deemed low as Kian Joo commands a 70% market share in domestic aluminium can business and some of its properties have not been revalued since 2009.
Can-One manufactures tin cans, plastic jerry cans, bag-in-box, dairy and non-dairy products. It has net debt of RM420.3 million. Excluding its share of net assets in Kian Joo, Can-One’s net assets stood at RM439 million or about RM2.88 per share.
This article first appeared in The Edge Financial Daily, on March 27, 2015.