PublicInvest sets 22 sen fair value on Yes Group, sees 17pct profit growth

KUALA LUMPUR: Public Investment Bank Bhd (PublicInvest) has assigned a fair value of 22 sen to newly listed Yes Group Management Bhd.

The valuation reflects the company's expansion into Europe, talent development initiatives and growing Malaysia My Second Home (MM2H) business, which are expected to drive earnings growth.

Analyst Lee Siao Ping said the company's expansion plans, including the establishment of Yes Academy and the growth of its MM2H business, were expected to support a three-year net profit compound annual growth rate (CAGR) of about 17 per cent.

"We forecast Yes Group's net profit to reach RM12 million by financial year 2029 (FY29), supported by its European expansion, talent development initiatives and growth in the MM2H segment," he said in a note.

PublicInvest derived the fair value based on an about 12 times price-to-earnings ratio (PER) applied to calendar year 2027 forecast earnings per share, representing a 10 per cent discount to its local listed peer's around 13.5 times PER.

Lee said the discount reflected Yes Group's relatively smaller market capitalisation and business scale.

The company's European expansion involves establishing a regional office near London Heathrow Airport and progressively acquiring vehicles to support incentive travel engagements and ad hoc ground transportation services.

"The UK ground transportation industry caters to business and premium leisure travellers through chauffeur-driven services, with demand supported by growing overseas business visits and airport passenger traffic, particularly for airport transfer," he said.

Lee said the establishment of Yes Academy would help develop industry talent, strengthen manpower capacity and support the scalability of the company's meetings, incentives, conferences and exhibitions (MICE) operations.

The company also plans to expand its MM2H segment by leveraging its existing MICE expertise and operational capabilities to grow its customer base.

"Long-term growth is further supported by sustained demand for customised incentive travel and MICE solutions, underpinned by Yes' established track record, diversified clientele and resilient competitive positioning," he said.

Yes Group completed 403 incentive travel engagements between FY23 and FY26, with repeat private sector corporate customers accounting for 40.4 per cent of its clientele.

As of Oct 9, the company had an unbilled order book of RM34.6 million, comprising entirely customised incentive travel engagements.

Of the total, RM34.4 million involved overseas destinations, particularly Europe at RM16.1 million and Asia at RM15.6 million.

PublicInvest said RM34 million of the unbilled order book was expected to be recognised in FY27, with the remaining RM600,000 in FY28.

Malaysia's MICE industry is supported by economic growth, rising corporate expenditure and increasing demand for incentive travel to motivate and retain employees.

Government support through tax incentives and business events initiatives, including MyTripleE 3.0, is also expected to strengthen Malaysia's position as a regional business events destination.

On its financial position, PublicInvest said Yes Group's gross gearing ratio was expected to improve to 0.01 times post-listing, from 0.02 times, following an increase in total equity.

Its gearing ratio had declined from 0.90 times in FY24 to 0.02 times in FY26, supported by higher retained earnings from consistent profitability and lower borrowings following the full settlement of several term loans and a hire purchase facility.