PETALING JAYA: Investors have reacted positively to PIE Industrial Bhd’s proposed share split, pushing the counter to a record high.
Shares of the Penang-based electronics manufacturing services (EMS) provider ended yesterday at RM13.60, which represented a gain of 46 sen, and off an intra-day high of RM14.10. There were 41,000 shares transacted.
Concurrently, Kenanga Research had initiated coverage on PIE, with an “outperform” recommendation, and a target price of RM14.55.
The brokerage explained in its report that its target price for PIE was based on a 15 times projected earnings for financial year ending Dec 31, 2017.
The valuation represented a steep 25% premium to PIE’s industry peers, which Kenanga Research said was justified by the company’s superior margins, advanced manufacturing capabilities and strong parentage support from Taiwan-based Foxconn Technology Group.
PIE on Tuesday announced its proposal for a one-into-five share split, aimed at improving the liquidity of its shares by increasing the number of shares in issue.
Subject to regulatory and shareholders’ approval, PIE’s proposed share-split exercise would likely be completed by the third quarter of 2016.
As at April 4, PIE’s paid-up was RM76.81mil comprising 76.81 million shares. Upon completion of the share split, the number of shares would be expanded to 384.04 million.