A PEGGY Method of Stock Market Share Fair Value Target Price IPO Dividend: Gefung stock

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Thursday, January 26, 2012

Gefung stock - a new Sunrise Bhd Stock?

Is there a value in Gefung share? Or will there be a selling down in Gefung shares due to listing of the rights issue.

Gefung rights issue:
The listing date of the rights issue shares is 27 January 2011.
Renounceable rights issue of up to 193,500,002 new ordinary shares of Gefung shares together with up to 38,700,000 free detachable new Gefung warrants on the basis of five (5) Rights Shares together with one (1) Warrant for every four (4) ordinary shares of Gefung held as at 5.00 p.m. on 27 December 2011.

Gefung Rights issue price is RM0.15
After the ex date 22 December 2011, Gefung share price was about RM0.15.
Right issue price and the share price is about the same and with just free one warrant for every four Gefung shares that your subscribe, not many people want to subscribe.

Only 53.40% subscribed / acceptance, and 2.98% applied for excess.Total is only 56.38%

My question is, who want the Gefung shares at RM0.15? Why the company didn’t set the Rights issue price lower?
Do the directors or major shareholders see value is Gefung stock that we are unable to see?

Based on Gefung Annual report 2010, the managing director is Dato’Allan Lim Kim. He was the major shareholder of Sunrise Bhd (7.24%, Sunrise annual report2010). Now Sunrise stock has been delisted (due to takeover by UEMLand stock). Can Dato' Lim turn Gefung into another Sunrise Bhd?

Look at Innoprise Plantation Bhd. INNOPRISE PLANTATIONS BERHAD rights issue in April 2010. Price was about RM1.00 and the rights issue price was RM1.00.
The acceptance was only 68.73%.
But what is Innoprise Planation stock share price now? Inno share price now is RM1.44 and some brokers recommended to buy with much higher fair value.

Information:
What is Gefung Warrant exercise price?
Gefung warrants total issue Size in Unit: 21,819,950
Gefung warrant Maturity Date is 19 January 2017 and the Gefung warrant fair value target price is determined by Gefung shares price, Gefunng Exercise price or conversion price of RM0.150.

Can Gefung Holdings Berhad be another Innoprise or Sunrise stock? Or will it trade lower than RM0.15?

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