Hartalega has proposed a bonus issue up to 820.4m shares, on the basis of one new bonus share for every one existing share. The bonus issue will be fully capitalised from its retained earnings and share premium account. (Source: Bursa Malaysia).

Comments:  Comment: We are positive on this exercise as it would boost trading  sentiment  by  increasing  the  stock’s  liquidity  while  rewarding  its existing  shareholders.  Based  on  its  last  closing  price  of  RM8.67,  the theoretical share price will be adjusted to RM4.33 while our ex-bonus TP would  reduce  to  RM4.36.  We  maintain  our  HOLD  recommendation  with unchanged  TP  of  RM  8.72  (based  on  22x  CY16E  P/E).

Source: Affin Hwang Capital Research - 8 Jul 2015