OUR TAKE
Liquidity boost. The proposed bonus issue will raise QL’s share capital from 330m shares to 396m shares. We believe the bonus issue will boost QL’s share liquidity with an increased float size of 48%. This would enhance the marketability of the shares. Maintain BUY. With the enlarged share base of 396m shares, we adjust our FY10 and FY11 EPS downward by 16.7% to 24.6sen and 28.7sen respectively on an ex-basis. Hence, our exbonus target price would be RM3.69 (cum price: RM4.43) based on 15x FY10 EPS. As the share price closed at RM3.72 yesterday, QL’s theoretical ex-bonus price would translate into RM3.10. Our target price shows a 19% upside from current levels.
Liquidity boost. The proposed bonus issue will raise QL’s share capital from 330m shares to 396m shares. We believe the bonus issue will boost QL’s share liquidity with an increased float size of 48%. This would enhance the marketability of the shares. Maintain BUY. With the enlarged share base of 396m shares, we adjust our FY10 and FY11 EPS downward by 16.7% to 24.6sen and 28.7sen respectively on an ex-basis. Hence, our exbonus target price would be RM3.69 (cum price: RM4.43) based on 15x FY10 EPS. As the share price closed at RM3.72 yesterday, QL’s theoretical ex-bonus price would translate into RM3.10. Our target price shows a 19% upside from current levels.
