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Sorento’s trading at about x12 its earnings, which isn’t too high for a company that’s been growing steadily with solid returns (around 25% on equity). The company’s got strong margins, low debt, and its expanding distribution should boost its value once the Johor expansion kicks in. If you apply a conservative 15-times earnings multiple, the stock could go up to RM0.60, which is a nice upside from where it’s at now (around RM0.38).
By addressing the Bumiputera equity conditions head-on, Steel Hawk secures its operational standing and avoids potential future complications, allowing management to focus fully on its core business.
