Read The Edge Weekly – talking about the divergence in valuation between Pentamaster MY and its Hong Kong listed subsidiary Pentamaster International which contributes 99.9% of the Malaysian holding company’s profits. As per the Edge, the HK subsidiary is trading at 12x PE while the Malaysian listed entity is traded at 46x PE.
I did a simple regression analysis to broadly ascertain the quantum of divergence by regressing between Penta MY (share price – “Dependent Variable“) against Penta HK (share price – “Independent Variable) . The study covers from 19 January 2018 till 27 November 2020.
Based on the regression analysis, the following analysis shows that the current share price Penta MY appears to be relatively higher than the forecasted value / range.
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