this stock is not fantastic...not liquid enough....big holders holder majority of shares....hope the bonus issue will help to increase the liquidity....
The recent corporate exercises of bonus issue and share split by Century Logistic is to enhance trading liquidity and the marketability of its shares.
The paid-up share capital consist of 122,064,297 shares. And after the bonus issue the share will be increase to 183,096,445. With the share split into 50sen the total amount of subdivided share will be increase to 366,192,890.
So what does that mean? When the company announce for bonus issue one of the reason is to reward the shareholder. After the share split it could further improve the liquidity of its share. This, of course the share price before bonus and share split it will go up further so that after the split the value of the company can be increase.
Let calculate from the closing price of RM2.52 the value of the company in total will be RM 307million. If the share had been split at RM2.52 the price will be adjusted to RM 0.84 and multiply with the new number of share 366,192,890 it give you back the same value of RM 307 million. Let assume the price of the Century Logistic share after bonus and split turn out to be RM 1.17 per share this will give the total value of the company increase to RM 428 million (RM1.17 x 366,192,890) from RM 307 million.
In order to achieve RM 1.17 per share after bonus and split, the share price of Century Logistic have to go up to RM3.50 per share from the closing price RM2.52
And after the split, the share of the company will “look cheaper” and the trading volume could be further enhanced because the number of shares had been increased. Thus the value of the company will be increase in the same time.
Why need to increase the value of the company?
FGV has a RM4.4 billion war chest comprising funds raised from its initial public offering in 2012. And recently, FGV is scouting for logistic company to acquire, mainly is to exploring more options to unlock value of its transport and logistics division.
And early this year, FGV have the intention to acquire a significant stake in Century Logistics for the reason FGV wanted to inject its own transport and logistics division into a listed entity to create more efficiencies and scale.
FGV have set it target by year 2020 it wanted to achieve a yearly revenue of RM100billion. Recently it had lost the bid of NBPOL to Sime Darby, therefore FGV could have focus on other area in order to achieve it vision. One of the way is through Merger and Acquisition in other division such as their Logistic arm.
Now we all eye on the Century Logistic, will Century Logistic accepting any proposal from FGV to further enhance the value chain into FGV businesses?
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
optimuss
1,321 posts
Posted by optimuss > 2014-07-01 23:36 | Report Abuse
oh boy....1.50 is awaiting u...