Hot Stock Yinson falls 2.8% after rights issue announcement, profit-taking

by **Cals** Sat 15 Mar 2014, 00:56

Hot Stock Yinson falls 2.8% after rights issue announcement, profit-taking

Business & Markets 2014

Written by Jeffrey Tan of theedgemalaysia.com

Friday, 14 March 2014 16:03

KUALA LUMPUR (Mar 14): Yinson Holdings Bhd fell as much as 2.8% to RM8.90 on profit taking after the share had risen by about 20% in recent weeks.

Investors could also be selling due to expected earnings dilution resulting from a proposed rights issue announced yesterday.

Yesterday, the firm proposed to raise gross proceeds of up to RM600 million, from an earlier proposed renounceable rights issue of RM500 million.

At 3.34 pm today, Yinson fell 26 sen or 2.8% to RM8.90. The fifth top loser saw trades of 543,700 shares.

Remisiers’ Association of Malaysia’s president Sam Ng told theedgemalaysia.com: “The stock declined today due to profit-taking as the share price has escalated tremendously over a span of a year.”

“Also, the sentiment among investors is uncomfortable. This could be due to earnings dilution from the proposed rights issue,” added the InterPacific Securities remisier over the telephone.

On January 24, Yinson proposed a rights issue that also included an increase in the authorised share capital to RM1 billion from RM0.5 billion and a share split of one existing Yinson share into two subdivided shares.

Analyst Alex Goh of AmResearch noted that the group will be using 83% of the entire rights proceeds for debt repayment and working capital purposes.

He said the expectations of two significant projects in the second half of this year should drive Yinson’s re-rating prospects further.

He has maintained his ‘buy’ call for the stock at RM9.16, with fair value of RM10.30.

However, Kenanga Research said the expected earnings per share (EPS) dilution of circa 73.7% would remain unchanged given the renewed number of shares and proposed allocation to pare down borrowings remained largely unchanged.

Kenanga said Yinson would see immediate technical support and resistance levels at RM9.03 and RM9.20 respectively.