KUALA LUMPUR: Greatech Technology Bhd's proposal of a one-for-one bonus issue involving the issuance of 1.25 billion new bonus shares is timely given the positive outlook on the technology sector.
Public Investment Bank Bhd (PublicInvest Research) noted that the new bonus shares raised the group's share base to 2.5 billion shares.
"This would reduce the unit price of its shares, making it more appealing to investors while further enhancing liquidity of the stock. It is also timely, in our view, considering the positive outlook in the technology sector," it said.
This would be the company's second bonus issue since 2021.
"The bonus issue has a muted impact on our earnings projection. The total number of enlarged share base will double to 2.5bn. The theoretical ex-bonus share price shall range between RM2.21 to RM2.70, based on daily VWAP of its shares during the three-month period," it said.
"Subject to shareholders' approval, Greatech expects the bonus issue to be completed by the third quarter of 2024," PublicInvest Research added.
As of May 20, 2024, the company's orderbook stood at RM1.01 billion.
Of the total, 60 per cent comes from solar, followed by the e-mobility segment, 2.5 per cent and lice science segment of 12.1 per cent.
For 2024, Greatech has set an orderbook target of RM1.1 billion with RM177 million already in the bag. PublicInvest Research maintained 'outperform' on the stock with a target price of RM5.91.