SAHCO IPO: Analysts predict share price rise

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Analysts at Vetiva Capital Management Plc have said the share price of Skyway Aviation Handling Company Plc has significant upside potential and can deliver double-digit gain in the months ahead following the firm’s Initial Public Offering.

The analyst said, “We initiate coverage on SAHCO, with a target price of N5.03. We derived our target price using a discounted cash flow model based on earnings from its ground handling and cargo businesses over a 2018-2022 forecast period (at current capacity).

“We are positive about the long-term growth capacity of the company, given the expected growth in its cargo business, increase in its client base and improvements in the broader sector.”

They said they also expected SAHCO’s ground handling top line to grow by 11 per cent this year to N5.4bn and then a further eight per cent annually to N7.3bn in 2022.

The PUNCH reported on December 18, 2018 that the Securities and Exchange Commission approved an extension of the offer period of the firm’s sale of 406,074,000 ordinary shares at N4.65 per share from December 19, 2018 to January 9, 2019.

The firm, in a statement, said, “Application list for the N1.89bn IPO closes tomorrow (Wednesday). Investors will formally have up till the close of business to submit their remaining applications.

“Stockbroking firms and other receiving agents, however, have a two-week window to submit their final collations to the issuing houses and provide discerning investors with additional opportunity to use the filing period to submit additional applications.”

SAHCO offered its shares at a minimum subscription of 500 shares and thereafter, in multiples of 100 shares.

Analysts at Cordros Securities Limited said, “This implies that any Nigerian with N2,325 will be able to be a part of the owners of the company, thus realising one of the objectives of privatisation, which is creating and distributing wealth to Nigerians.”

SAHCO said its shares were expected to be listed on the Nigerian Stock Exchange this quarter to provide investors with dual opportunities of dividend and capital gain.

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