• 1 for 10 bonus issue

• Positive on the news

• Targeting higher sales in FY18

• Ceasing coverage

1 for 10 bonus issue. Glomac Berhad (GLOMAC) has announced a 1- for-10 bonus issue (equivalent to 74.8m shares). The objective is to improve the liquidity and marketability of Glomac shares.

Positive on the news. We believe that the higher number of shares (post the bonus issue) should improve the liquidity of the stock.

Targeting higher sales in FY18. Fundamentally, the Company is planning property launches of RM1.02b for FY18 and this should improve its sales against last year. Recall that GLOMAC achieved RM420m of sales in FY17. As of end-FY17, GLOMAC has unbilled sales of RM556m representing less than one year earnings visibility.

Ceasing coverage. The company’s fundamentals remain intact underpinned by its decent balance sheet and RM1.02b of launches this year. However, we are ceasing coverage on the stock due to internal resources allocation. Our last recommendation for the stock was NEUTRAL with a TP of RM0.69.

Source: MIDF Research - 3 Aug 2017