KimLun is proposing to raise additional equity capital via a private placement of 22.9m new shares (10% of its existing share capital) at an indicative issue price of RM1.22 each, which will raise an estimated RM27.9m. The company proposes to utilize the proceeds as follows.
FV to be diluted to RM1.95. Our existing FV of RM2.15 is based on 10x FY12 earnings.
The proposed placement will enlarge KimLun’s share capital from 229m to 251.9m. With no changes in our valuation parameter, our FV would accordingly be reduced to RM1.95 in line with the EPS dilution. Since there is still some 26% price upside post placement, we maintain our BUY rating.
FV to be diluted to RM1.95. Our existing FV of RM2.15 is based on 10x FY12 earnings.
The proposed placement will enlarge KimLun’s share capital from 229m to 251.9m. With no changes in our valuation parameter, our FV would accordingly be reduced to RM1.95 in line with the EPS dilution. Since there is still some 26% price upside post placement, we maintain our BUY rating.
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