MRCB is an integrated transport hub
developer. Since the successful completion of its KL Sentral CBD development,
it has expanded its projects to include PJ Sentral, Kwasa Damansara &
Penang Sentral. For more on its projects, go to here.
To finance its mega projects,
MRCB has proposed a 1-for-1 Rights Issue at 79 sen which comes with 1 free
warrant for every 5 shares subscribed for. The exercise price for each warrant
is fixed at RM1.25. For details of the fixing of the Rights Issue & warrant
exercise price, go here. The
Rights issue has prompted a sharp drop in MRCB share price from RM1.75 in May
to as little as RM1.01 on Sep 26 & 27.
Kenanga has maintained a fairly
positive view on MRCB, valuing MRCB at RM1.14 after the Rights issue. Assuming
that MRCB closed at RM1.03 today (the last cum date), the theoretical ex-Rights
price is about RM0.97. This gives MRCB an upside of about 17%. I feel that
Kenanga's fair value is too conservative, probably due to market reality.
Based on the sharp drop in
share price over the past 4 months, I believe MRCB is a good stock for
long-term investment. You can either buy MRCB today and then go through with the
Rights issue or buy it after the Rights issue when further "massaging" may throw out
even lower prices. Good luck!
Chart 1: MRCB's daily chart as at Sep 28, 2017 (Source: Shareinvestor.com)
Chart 2: MRCB's monthly chart as at Sep 28, 2017 (Source: Shareinvestor.com)
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.
http://nexttrade.blogspot.my/2017/09/mrcb-cheap-enough.html
