KGAL is trading at book value subsequent to the dividend announcement and we estimate ex-dividend price correction to be in par with dilution of net assets of the company. Accordingly for investment perspective we estimate a price of LKR 96 at ex-div. LOLC SEC derives an Ex-dividend valuation of LKR 82.00 for KGAL considering the prevailing plantation outlook and the impact of dividend payout. Therefore the valuation will be at a 16% discount to potential ex-div price. Accordingly we revise down LOLC SEC recommendation from Hold to Sell, despite the high dividend return for the investor.
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