Stock Name: UEMLAND
Company Name: UEM LAND HOLDINGS BHD
Research House: MIDF
KUALA LUMPUR: MIDF Equity Research is maintaining a Neutral call on UEM Land Bhd with a revised target price of RM1.25 ex-rights, derived from a 25% discount to RNAV. UEM Land proposed a one-for-two rights issue at 80 sen per share to raise RM971.3 million. A total of 1.21 billion shares will be offered to existing shareholders. It said 77.14% will be subscribed by the UEM Group. The issue price of 80 sen per rights share is a 44.1% discount to the counter's five-day moving average (RM1.43) and -34.4% to the derived theoretical ex-rights price of RM1.24. "We advise existing shareholders to subscribe to the rights share to further increase their investment and equity participation," it said in a research note on Tuesday, March 23. "Despite our ex-price TP providing a mere +2.4% upside to the counter, the subscription of the rights is a viable option for investor to average down cost. Note the shares traded at its highest at RM2.01 per share on June 15, 2009," it said. MIDF Research said the proposed rights issue was vital for UEM Land to stay afloat. A major portion of the proposed proceeds (65%) will be used to pare down debts. Hence, it expects balance sheet to be strengthened post-rights and provide room for gearing in future, as UEM Land accelerates further developments in Nusajaya. \"Assuming the rights are fully-subscribed, gearing levels are expected to reduce to 0.05x (previously 0.48x)," it said.
Company Name: UEM LAND HOLDINGS BHD
Research House: MIDF
KUALA LUMPUR: MIDF Equity Research is maintaining a Neutral call on UEM Land Bhd with a revised target price of RM1.25 ex-rights, derived from a 25% discount to RNAV. UEM Land proposed a one-for-two rights issue at 80 sen per share to raise RM971.3 million. A total of 1.21 billion shares will be offered to existing shareholders. It said 77.14% will be subscribed by the UEM Group. The issue price of 80 sen per rights share is a 44.1% discount to the counter's five-day moving average (RM1.43) and -34.4% to the derived theoretical ex-rights price of RM1.24. "We advise existing shareholders to subscribe to the rights share to further increase their investment and equity participation," it said in a research note on Tuesday, March 23. "Despite our ex-price TP providing a mere +2.4% upside to the counter, the subscription of the rights is a viable option for investor to average down cost. Note the shares traded at its highest at RM2.01 per share on June 15, 2009," it said. MIDF Research said the proposed rights issue was vital for UEM Land to stay afloat. A major portion of the proposed proceeds (65%) will be used to pare down debts. Hence, it expects balance sheet to be strengthened post-rights and provide room for gearing in future, as UEM Land accelerates further developments in Nusajaya. \"Assuming the rights are fully-subscribed, gearing levels are expected to reduce to 0.05x (previously 0.48x)," it said.
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