RHB has maintained its but call on KPower with a higher target price of RM8.92 from RM6.46, pegged to a higher multiple of 20x FY22F P/E, as it sees higher general earnings growth potential in the longer term from the healthcare segment.
Another alternative for renewable energy play could be KPower Bhd, which is one of the top picks of RHB IB and AmInvestment Bank Bhd.
RHB IB said KPower is firmly on its growth trajectory and is expected to double its order book size by end-FY21. "The stock, in our view, could undergo a further rerating, if KPower can penetrate the solar industry, which generally fetches premium valuations," said the research firm.
Outlook. UWC remains optimistic of its business prospects. Besides existing clients, it has also been receiving enquiries from potential local and global customers on a regular basis. This will broaden its customer base, diversify its segmental exposures, and increase order book in the process. UWC foresees a stronger demand for chip testers ahead in tandem with the with the projected semiconductor equipment market growth. It is working closely with customers in new product development as well project transfer, at the same time targeting potential high-end customers. It has undertaken the manufacturing of frontend semiconductor and 5G equipment. It is constructing a class 10k cleanroom, which is expected to be completed by early 20 21, to cater for frontend semiconductor equipment assembly. Also, UWC is expanding its assembly bay capacity. The autonomous vehicle chip tester is expected to commence mass production by end of 1HFY21. As for life-science and medical segment, the group expects sustainable substantial growth ahead against the backdrop of Covid-19 and increased health awareness and living quality.
Source: Hong Leong Investment Bank Research - 2 Dec 2020
UWC: 1Q profit nearly doubles on-year, lifted by strong demand from semiconductor. UWC reported a near doubling in its 1Q net profit from a year ago, boosted by stronger demand in both its semiconductor and life science businesses. It is also involved in the Covid-19 test equipment supply chain. Its net profit for the 3 months came in at RM21.71m. (The Edge)
UWC Bhd is proposing to undertake a one-for-one bonus issue on an entitlement date to be determined. The exercise will involve the issuance of up to 550.2m new shares, which will enlarge UWC's share capital to 1.10bn shares. (The Edge)
UWC: Proposes 1-for-1 bonus issue. UWC is proposing to undertake a bonus share issuance on the basis of one bonus share for every one existing UWC share held (1-for-1), on an entitlement date to be determined. The exercise will involve the issuance of up to 550.2m new shares, which will enlarge UWC's share capital to 1.1bn shares. The proposed bonus issue is to reward UWC shareholders and allow them to have greater participation in UWC, while retaining their respective stake. (The Edge)
KPower has proposed a 4-for-1 share split and a 1-for-3 (after the share split entitlement date) free warrant issue with an indicative exercise price of RM2.50 per warrant. For illustration purposes, an investor who owns 3,000 KPower shares prior to the ex-date shall end up with 12,000 KPower shares plus 4,000 free warrants after the ex-date. Ex-all, our fair value for KPower shall adjust down to RM1.10. This is assuming full conversion of warrants and the interest income (at 2% p.a.) earned from the proceeds .AMINVEST RESEACH
SCIB proposed bonus issue of 3 bonus shares for 1 existing share, with 1 free warrants for every 2 shares held after the bonus issue. So that means if you have 1 SCIB share now, after the exercise you will have 4 SCIB shares and 2 SCIB warrants.
When Datuk Abdul Karim mentioned that SCIB planned to achieve market cap of RM1 billion in 2 years time, its share price must reach above RM8.
With outstanding shares of 490mil after this bonus issue, its share price only need to reach RM2.04 to achieve RM1 billion market cap.