Hot Stock Pharmaniaga gains 42 sen on bonus, JV

Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Tuesday, 21 May 2013 11:11
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KUALA LUMPUR (May 21): PHARMANIAGA BHD [] became the top
gainer in morning trades as it jumped as much as 42 sen or 4.6%
before slipping to the second spot.
The rise came on the back of several corporate announcements made
by this government-linked pharmaceutical company yesterday.
The company announced a share split, a bonus issue and a new joint
venture (JV) in Saudi Arabia.
At 10:38 am today, Pharmaniaga shares were traded 41 sen higher at
RM9.52 after rising from a low of RM9.21. A total of 69,300 shares
changed hands.
The company announced yesterday that it will undergo a share split
exercise on the basis of one existing share being divided into two units.
Pharmaniaga will also reward a bonus issue to its shareholders,
whereby the latter will receive one bonus share for every 10 of the
newly subdivided shares.
These corporate exercises are slated to go ex-date on May 31 of this
year.
Pharmaniaga is also set to distribute its first interim dividend of 7.5 sen
a share, which will go ex-date on May 30.
According to Hong Leong Investment Bank Research today, Pharmaniaga’s shares will come at an ex-price of RM4.14. The
target ex-price meanwhile has been set at RM4.96 a share.
The research house has retained its “buy” rating on the company with an unchanged target price of RM10.92.
HLIB’s note detailed Pharmaniaga’s new proposal to expand its pharmaceutical manufacturing arm to Kingdom of Saudi
Arabia through a joint venture with Modern Healthcare Solutions Co Ltd.
The latter is exclusively owned by HRH Prince Turki bin Abdulrahman bin Abdulaziz and Engr. Abdulaziz F AlHamwah.
“Each (Pharmaniaga and Modern Healthcare) will have an equal equity interest in share capital of the Riyadh-based JV entity,
namely Modern-Pharma Co Ltd with initial duration of 15 years effective from the date of its corporate registration,” explained
HLIB analyst Low Yee Huap in the note.
“While anticipating the conclusion of Indonesian acquisition (announced in April this year), we welcome this development
positively with little surprise as it managed to materialise the memorandum of collaboration which dated since October 2011.”
Low added that the Middle Eastern and African healthcare markets are poised for a bullish growth along with their
economies.
“For example, Frost & Sullivan estimated Saudi Arabia’s healthcare expenditure to reach US$36.9 billion (RM111.16 billion) in
2015 on the back of compound annual growth rate (CAGR) of 8.1% while UAE’s to reach US$21.3 billion in 2016 at a CAGR
of 15.2% between 2011 and 2016,” said Low.