Why Maxis PE As High As 17 Times?

- Brand
Brand will play a significant role in push up Maxis share price up to as high as 17 times PE. But, is it worth that much? In personally, I think this kind of intangible asset shall be worth 3-4 times PE only.

- Stability (Leading position in market share)
The stability of Maxis in earning revenue, without doubt, is performing well for many financial years, and the performance result to their leading position in the industry’s market share. Thus, it is definitely a factor to mark-up their share price much higher than the EPS or Book Value.

- Fair Market
To be fair, Maxis have to fix the share price on the average level of the industry, thus, this formed the basic price level of Maxis share on 17 times PE.

- Expectation
Well, the above reasons is not the ultimate power to push the share price till so high, the most solid reason, in my personal view, must be the share buyer. Why I said like that? Think, if buyer not willing to acquire Maxis share at such price and require the price at a lower level, and insist on that, do you think Maxis still able to fix and sell their share on that price level? Second, because the buyers scramble for the shares, in consequences, this will raise the share demand, and of course, the price level too.

So, why buyers have so high demand on that? The above three reasons should be a few significant of the reasonable answers. Back to the point, do you really think that the above 3 reasons should have the Maxis share mark-up at a 17 times PE? What your say?