SHARE prices of the YTL group of companies spiked yesterday following the announcement of a proposed share split which would make these shares more affordable.
YTL e-Solutions Bhd was the star performer among the five YTL group counters.
The stock hit limit-up in the morning session, surging to a day's high of RM1.90. It finished the day at RM1.76 – a record high close – up 41 sen or 30%.
YTL e-Solutions is seen as a laggard among its Mesdaq peers in terms of share price performance.
“It is one of the better Mesdaq counters. It has good management. And its valuation is relatively lower than other Mesdaq stocks,'' said an analyst with financial portal Surf88.com.
She noted that the price/earnings ratio (P/E) of YTL e-Solutions was about 20 times, while some Mesdaq stocks were already at more than 50 times.
YTL e-Solutions posted a higher net profit of RM4.09mil for the six months to Dec 31, 2003, compared with RM3.6mil a year ago.
The company attributed the rise to higher demand for its Internet-related solutions, and upward revisions to rates charged by subsidiary Extiva Communications Sdn Bhd for Alternative Voice Service Provider services.
YTL group's property arm, YTL Land and Development Bhd, also gained substantially yesterday, rising 29 sen or 12% to RM2.70 – its highest level since April 2002.
Analysts said the stock offered a cheaper entry for investors intending to ride on the expected property boom.
YTL Cement Bhd shot to a six-year high of RM5.30 yesterday, up 30 sen or 6%.
The parent company, YTL Corp Bhd, which did not propose a share split, rose to a 19-month high of RM4.80, up 10 sen or 2%.
YTL Corp's share price had been on a steady climb since mid-February. Analysts said the group's share buyback scheme had lent some strength to the stock.
Utility stock YTL Power International Bhd finished at RM3.48, up 12 sen or nearly 4%.
“The relatively high dividend yield is the appealing factor of the defensive stock (YTL Power) against the backdrop of accelerating economic growth,'' an analyst said.
Analysts said the share split plans would not change the fundamentals of the companies. However, the exercise would make their shares more affordable, particularly to retail investors.
YTL Power International, YTL Cement and YTL Land proposed to sub-divide each RM1 share into two 50 sen shares. YTL e-Solutions proposed to sub-divide each RM1 share into 10 shares of 10 sen each.
YTL Land proposed to split its Class A and Class B RM1 irredeemable convertible preference shares (ICPS) into two ICPS of 50 sen each.
“YTL e-Solutions shares will cost less than 20 sen each after the split. This will make the shares more marketable,'' said the head of research at a local stockbroking firm.
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