Posted by
Daniel Wong |
10:19 PM
|
Hai-O
|
Fair Value: RM 2.76
Current Price: RM 4.68
Recommendation: SELL / HOLD
The Fair Value is adjusted to reflect the Bonus Issue of 1:5 and Share Split of 1 to 2 being exercised today.
Refer to previous write-up here for more info about this company.
Disclaimer
This is a personal weblog, reflecting the author's personal views. All information provided here, including recommendations (if any), should be treated for informational purposes only. The author should not be held liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein.
Does it still not too late to buy? Since its 60% down.
Hi Leif,
Haio's share price didn't go down. It just got adjusted. Let's say if you bought 500 units at RM10.40 before 16th of March (Ex-date), then on the 16th of March the share price adjusted to RM4.33. You will have 1200 units in your CDS account on the 18th of March (Lodgement Date) because of the Bonus Issue of 1:5 and Share Split of 2:1
Before Ex-date, your investment value is RM5200 (RM10.40 x 500 units). On Ex-Date your investment value is still RM5200 (RM4.33 x 1200 units), if the share price still stays at RM 4.33 ;)
In other words, Bonus Issue and Share Split do not fundamentally change the fair value of its stock. They just made the stock more liquid, that's all.
The uninformed public are 'fooled' into thinking that the stock is now 'cheaper'.
Ah I see. Ok noted. Thanks for the reply.