FW: AmBank Research - Econpile Holdings : Proposes 1-for-1 split, 1-for-4 bonus and warrant issues Hold, 7 Sep 2017

 

STOCK FOCUS OF THE DAY

Econpile Holdings : Proposes 1-for-1 split, 1-for-4 bonus and warrant issues      Hold

 

We maintain our HOLD call, forecasts and FV of RM2.22. Our FV is based on 13x CY18F EPS of 17.1 sen, at a slight premium to our 1-year forward target PE of 10-12x for small-cap construction stocks, to reflect a relatively less competitive piling segment vis-à-vis general contracting. Econpile has proposed a 1-for-1 share split, and post- share split, a 1-for-4 bonus and warrant issues. The share split will double its share base from 535mil shares to 1,070mil shares, and the bonus issue will boost it further by 25% to 1,337.5mil shares.

 

We are neutral on the exercise. We do not believe an apple will become bigger by virtue of it being cut into more pieces. Also, while the warrants will command a market value upon listing, we believe this value will effectively be “carved” out from the market value of the mother shares, a mechanism also known as “dilution”. 

 

Others :

Technology Sector : Robust memory and analog sales ahead       Neutral

Telecommunication Sector : Steady revenue and margin amid subscriber loss

                Neutral

 

QUICK TAKE

CIMB Group :  Acquiring 100% stake in Jupiter Securities                Hold

 

STOCK ON RADAR

Prestar Resources, Rohas Tecnic, ViTrox Corporation, Kimlun Corporation

 

ECONOMIC HIGHLIGHT

Malaysia : Trade to power economic growth

 

NEWS HIGHLIGHTS

Berjaya Assets : Proposes 1-to-2 share split

Goh Ban Huat : Eyes sanitaryware expansion in Vietnam

Vizione : Mulls paying dividends

See Hup : To expand business to Klang Valley and JB