Guan Chong rebounds after management's assurance, bonus issue

  • Business
  • Thursday, 23 Aug 2012

KUALA LUMPUR: Guan Chong Bhd's share price staged a mild rebound on Thursday, climbing to a high of RM3.04 after the management gave an assurance it was still keeping its options open while the bonus issue plan was still going ahead.

At 10.45am, it was up nine sen to RM3.04 with 209,100 shares done. Its warrants, GCB-WA added three sen to RM1.05.

The FBM KLCI was up 1.76 points to 1,654.01. Turnover was 360.92 million shares valued at RM265.90mil. There were 194 gainers, 234 losers and 286 counters unchanged.

Guan Chong managing director and CEO Brandon Tay said that the possibility of a secondary listing in the republic had not been closed.

He also said the company had received proposals from strategic investors that want to come in with a significant stake in Guan Chong but they would have to be a "right fit to our growth plans".

Hwang DBS Vickers Resarch (HDBSVR), in a research note on Thursday, maintained its HOLD rating and target price of RM3, pegged to 7.5 times FY13 forward fully diluted EPS of 40 sen.

"The stock - which hit a low of RM2.86 (-5.0%) before closing at RM2.95 (-2.0%) yesterday after it scrapped dual-listing plans in Singapore - may find downside limited by 4.8% FY13F net dividend yield and low 7.1 times fully-diluted P/E," it said.

In the second quarter to June 30, Guan Chong's net profit rose 2.41% to RM35.3mil on the back of a 6.51% decrease in revenue to RM312.84mil. For the first half, net profit was up 3.21% to RM66.61mil on the back of a 6.81% increase in revenue to RM667.18mil.

It also declared a third interim tax-exempt dividend of 2.5 sen for the period. Guan Chong's bonus issue was also on track and it would entail an issuance of up to 159.9 million new shares of 25 sen each. The entitlement date is on Sept 11.

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