Liquidity quadrupled! Bonia’s one-for-one bonus issue and two-for-one share split have gone ex today. We are highly positive on this corporate exercise, as we believe that it will improve the stock’s trading liquidity and generate larger interest among investors. We adjust our FY15-16 EPS for this. We have made an adjustment to our valuation method. We now apply a 15% premium over the retail sector’s average P/E of 16.8x to incorporate Bonia’s stronger growth outlook, resulting in a target P/E of 19.3x of its CY15 EPS (previously 19.3x) which we believe is a more accurate method to value the company. Accordingly, we adjust our target price to RM2.03. We reiterate our Add rating, expecting this corporate exercise to provide a re-rating catalyst. What Happened Bonia’s proposed one-for-one bonus issue and two-for-one share split have gone ex today. Its bonus issue involves the issue of 201,571,850 bonus shares, doubling its outstanding number of shares to 403,143,700 shares. Its share split involves the subdivision of every Bonia share into two shares, again increasing the number of its ordinary shares to 806,287,400. What We Think We are highly positive on this corporate exercise. Although it does not alter the company’s fundamentals, we expect a significant boost to the stock’s trading liquidity and marketability. Its bonus issue and share split have quadrupled its number of ordinary shares, while its ex-rights price is only 25% of its cum-rights price. We believe that its higher number of shares and much more affordable share price will generate larger interest among investors. This should improve the stock’s trading volume, which we expect to lead to higher valuations. What You Should Do Accumulate the stock. Even though Bonia has rallied strongly of late, increasing 20% for the past three months, it is still trading at a discount to its intrinsic value, in our estimation, with upside still substantial due to the company’s strong growth outlook. Its bonus issue and share split should provide further re-rating catalysts
Very strong support..Retailers all grabbing the stocks being sold. Surprised that many people are still accumulating Bonia shares. Looks like I did my job, gonna liquidate my balance shares here by this week and move to other counters like Protasco, Kawan Foods and Prolexus (all which I believe will huat a lot more than this Bonia very soon)
Bonia products may be available at all Parkson outlets in China.
KUALA LUMPUR: Parkson Holdings Bhd, which has acquired stakes in three companies for RM59 million, hopes to grow its in-house brands by generating 20% to 30% sales from this segment over the next three to five years.
Its chairman-cum-managing director Tan Sri William Cheng said the acquisition plans would be able to help the firm to grab better profit margin, especially in the online sales division.
"Right now we need a change, we used to carry consignment not belonging to Parkson, but without our brands, it's difficult to do online sales…this is the trend in China," he told a press conference here yesterday in conjunction with the signing ceremony with joint venture partners.
The group has set a target to further increase its in-house brands' contribution to 50% of total sales in the long term.
Parkson is buying a 60% stake each in AUM Hospitality Sdn Bhd and Giftmate Sdn Bhd for RM48 million and RM8 million, while a 50% stake in Valino International Apparel Sdn Bhd worth RM3 million.
AUM Hospitality has 12 brands under its portfolio in the food, beverage and entertainment area; Giftmate is involved in the premium gift segment; and Valino specialises in menswear and owns the "Kent" brand from Indonesia.
Cheng said Parkson is looking to acquire another six in-house brands by year-end, with three brands each in the Malaysia and China markets. He said Parkson would also be looking to bring the "Bonia" brand, which is currently looking to re-enter the China market, with it.
"Brands are the most important thing for retail market…it helps us to improve net profit," he added.
but most of buyer cant sell as will only credited on 27th right? may be more sell down once the units credited.. hope price is down and can buy more :)
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....
johnny
202 posts
Posted by johnny > 2014-07-18 15:00 | Report Abuse
wow, after split got a target price 1.55. hope bonia will have a good momentum after this split.