PublicInvest sees 16pct upside for GB Bond ahead of ACE Market debut

KUALA LUMPUR: Public Investment Bank Bhd (PublicInvest) has assigned a fair value of 29 sen to GB Bond Holdings Bhd, based on a price-to-earnings ratio of 9.5 times its forecast earnings per share for the financial year ending 2027 (FY27).

The research house forecast GB Bond's earnings to grow at a three-year compound annual growth rate of 20 per cent, reaching RM14 million in FY28.

"This will be supported by regional expansion, higher utilisation of existing production facilities, enhanced formulation capabilities and intensified marketing activities," it said in a note.

Over the longer term, PublicInvest said GB Bond's growth would be supported by planned capacity expansion for industrial adhesives and sealants, enhanced formulation capabilities and regional expansion in Vietnam.

The firm said GB Bond planned to expand its manufacturing capacity by renting a new 40,000 sq ft factory near its Bukit Panchor headquarters, with several suitable locations identified.

"It plans to install additional machinery, which should increase its annual industrial adhesives manufacturing capacity by 35.3 per cent to 31,971 tonnes to support anticipated sales growth in Malaysia and Vietnam," it said.

For sealants, PublicInvest said GB Bond planned to add two production lines, tripling its annual capacity to 1,422 tonnes to support sales growth and cross-selling opportunities with existing industrial adhesives customers.

"The additional production lines can also be used to manufacture industrial adhesives when required, providing greater operational flexibility to address urgent manufacturing needs," it added.