THE BUZZ
After making a
capital repayment of RM0.02/share and
the company’s capital restructuring,
Time dotCom’s (TDC) shares will trade ex tomorrow.
OUR TAKE
Adjusting share price
and FV. In its just completed capital restructuring, TDC sought to: (i)
wipe out its entire retained losses, and (ii) conduct a 5-into-1 share
consolidation. In the exercise, the company reduced its share capital by
RM2.3bn (a capital reduction of 2,530.8m shares from RM1.00 to RM0.10 per
share), and subsequently cancelled a portion of its share premium to eliminate
its accumulated losses. The company’s number of shares shrank in by 5x to
506.2m shares after the 5-into-1 share consolidation plan. This means that the share price should
adjust to RM3.23 versus RM0.665 currently,whereas our fair value (FV)
will be revised to RM4.25 (Table 1) from RM0.87 previously.
Maintain BUY,
with FV RM4.25, post capital
repayment and share consolidation. On the conclusion of these exercises, TDC
would be able to proceed to its next phase of growth and transform itself into
a regional wholesale service provider via the acquisition of Global Transit
entities and AIMS Group, slated to be completed by 2HFY12. As for its 1QFY12
results tentatively due for release next
week, we expect TDC’s financial performance to be largely in line with
our estimates. We continue to like the stock’s cheap valuation and are reiterating our BUY recommendation, with
a post-capital repayment and share consolidation FV of RM4.25, based on a
sum-of-the-parts (SOP) valuation. We see the recent share price decline as a good opportunity to accumulate TDC
shares.
Source: OSK188
No comments:
Post a Comment