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Author: kltrader   |   Latest post: Fri, 15 Nov 2019, 2:23 PM

 

Yong Tai - Another Major Equity Exercise

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Maintain HOLD with a lower TP (-11%)

After raising MYR18.9m from placing 48.6m new ordinary shares in Apr 2019, YTB now proposes ≤MYR144m involving ≤400m new ordinary shares. We opine this proposal will proceed as there is firm commitment to take up 300m of the new ordinary shares. There would be major dilution with the new shares to make up 75% of the existing base. We cut end-FY6/20 FD NTA/shr est. by 11% to MYR0.47. Our new TP is MYR0.33 (-11%).

Proposes to issue ≤400m new shares

This represents 75% of YTB’s outstanding shares. 300m new ordinary shares will be placed out equally to Full Intelligent International Ltd (100%-owned by Asia Television Holdings Ltd), Domain Capital Sdn Bhd (30%-owned by Datuk Wira Boo Kuang Loon, 49%-owned by Thong Teong Bun and 21%-owned by Ho Sue Bia) and Datin Seri Faridatulfirdaus binti Ariff at MYR0.36/shr. 100m new ordinary shares will be placed out to third party investors at an issue price that has yet to be determined.

May raise ≤MYR144m to complete developments

The 300m new ordinary shares will likely be placed out to the aforesaid placees in 3QCY19 (1QFY20). The remaining 100m new ordinary shares may be placed out throughout 2HCY19 (1HFY20). If the latter is also placed out at MYR0.36/shr, YTB will raise a total MYR144m; the proceeds to:- (i) partly finance the development of Terra Square mall (MYR80m), Impression City (MYR20m), Impression U-Thant condominium (MYR19m), (ii) for working capital (MYR22.5m); and (iii) other expenses (MYR2.5m).

End-FY20E FD NTA/shr cut by 11%

We leave our absolute earnings estimates unchanged. That said, recall that YTB placed out 48.6m new ordinary shares at MYR0.36/shr on 26 Apr 2019 (link). Coupled with the aforesaid proposal, we cut our end-FY20E FD NTA/shr to MYR0.47 from MYR0.53, FY20E FD EPS to 0.3sen from 0.5sen and end-FY20E net debt position by 74% to MYR55.9m to reflect the additional ordinary shares. Rolling forward our valuation base year to end-FY20 from end-FY19 and ascribing an unchanged 30% discount to FY20E NTA/shr, our revised TP is MYR0.33 from MYR0.37 (Fig 1).

Source: Maybank Research - 21 May 2019

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Labels: YONGTAI

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