Proposed bonus issue not expected to have any fundamental impact towards GDEX
KUCHING: GD Express Carrier Bhd’s (GDEX) proposed bonus issue is not expected by analysts to have any fundamental impact towards the group.
In a filing on Bursa Malaysia, Maybank Investment Bank Bhd ( Maybank IB) had on behal f of GDEX’s board of directors, announced that the company proposed to undertake a bonus issue of up to 4.71 billion new ordinary shares in the companyon the basis of three bonus shares for every one existing GDEX share.
GDEX noted that assuming all of the outstanding WarrantsB as at the latest practicable date ( LPD) of March 15, 2017 are exercised on or prior to the entitlement date, 4.71 billion bonus shares will be issued pursuant to the proposed bonus issue and hence, the share capital of GDEX will increase by up to RM235.65 million comprising up to 6.28 billion GDEX shares.
According to the research arm of Kenanga Investment Bank Bhd ( Kenanga Research), the proposed bonus issue is not expected to have any fundamental impact towards GDEX, apart from the increase in share base.
“No shareholdings dilution will occur, with no cash to be raised from the issue,” Kenanga Research said. “The bonus issue is with the intention of rewarding shareholders with improved trading liquidity and market participation.”
Kenanga Research believed that GDEX is still an immediate beneficiary and earnings-proxy of the growing ecommerce in the country.
The research arm expected GDEX to continue the company’s expansion efforts to further increase sorting capacity to accommodate higher volume growth.
“Furthermore, its investment in PT SAP Express (five-year convertible bond for 40 per cent equity stake) is expected to be positive for the longer- term,” Kenanga Research said.
With most of GDEX’s cash ra i sed from the pr ivate placement to Yamato last year still intact, the research arm did not discount the possibility of future inorganic growth as the company works towards being a regional player.