STOCK FOCUS OF THE DAY
MRCB : Proposed rights issue to raise up to
RM2.86bil
BUY
We maintain our BUY call on MRCB with an unchanged fair
value of RM1.89, based on a 10% discount to its RNAV. We make no changes to our
earnings forecasts. MRCB has proposed to undertake a renounceable rights issue
of up to 2.86bil new ordinary shares in MRCB together with up to 571.3mil free
detachable warrants on the basis of one rights share for every one (1 for 1)
existing MRCB share held and one free rights warrant for every five rights
shares subscribed for (1 for 5), on an entitlement date to be determined later.
The issue price for the rights issue and the exercise price
for the warrants will be determined at a later date based on a discount of not
less than 20% and a premium of not less than 20% to the theoretical ex-rights
price respectively. Under the minimum scenario, the enlarged total issued share
capital of MRCB will increase to 4.35bil shares, while under the maximum
scenario, the enlarged share capital will increase to 5.71bil shares, after the
full exercise of ESOS and warrants. Using an indicative rights issue price of
RM1.00 and exercise price of RM1.60 for the warrants, this exercise will raise
RM2.17bil (minimum scenario) or up to RM2.86bil (maximum scenario). We are
surprised by the proposal. On the positive side, the proposal will have an
immediate impact in reducing the gearing of MRCB, which will translate into
lower interest costs for the group, and better earnings trajectory. However, we
believe the substantially enlarged share base of MRCB may have a dilutive
impact on the earnings per share of the group moving forward, which will be
negative for the shareholders.
Others :
Cahya Mata Sarawak : Bullish on FY17
prospects
BUY
Carlsberg Brewery : Valuations fairly reflective of
outlook
HOLD
Inari Amertron : Iris scanning chip production up and
running
HOLD
Mah Sing Group : Titiwangsa land acquisition is earnings,
cash flow positive HOLD
UEM Sunrise : Positive start to the year Hold
STOCKS ON RADAR
Malayan Flour Mills,Mitrajaya Holdings,BP Plastics
Holding,Lii Hen Industries
ECONOMIC HIGHLIGHTS
Malaysia : 4th month of negative returns
NEWS HIGHLIGHTS
Plantation Sector : Malaysian palm oil price registers
sharpest daily gain in a week
Priceworth International : Priceworth gets green light to
log at Sabah forest reserve
Anzo Holdings : Anzo swings back to the black in Q4
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.