ONE wonders if the management of Mega First Corp Bhd (MFCB) purposely waited for the auspicious Chap Goh Mei day (the last day of the 15-day Chinese New Year celebration) to break the news that the company’s loyal investors have long waited for.
Having posted for a record net profit on both its quarterly and yearly basis for FY2020, MFCB has proposed a one-for-two share split exercise, purportedly to enhance the marketability and trading liquidity of its stock.
“In addition, the adjustment to the market price of MFCB Shares pursuant to the proposed share split is expected to result in the MFCB Shares being more affordable, thus potentially appealing to a wider group of public investors,” the hydropower plant operator noted in a Bursa Malaysia filing.
“The exercise will also enable the entitled shareholders to hold a larger number of MFCB shares at no cost while maintaining their percentage of equity interest in the company.”
As of Feb 22, being the latest practicable date (LPD) prior its announcement, MFCB’s issued share capital stood at RM743.12 mil comprising 494.17 million shares (including 20.5 million treasury shares).
Upon completion of the share split exercise, the resultant issued share capital of the company will be RM743.12 mil comprising 988.35 million of subdivided shares.
Given that the closing price of MFCB shares at the LPD was RM7.80, the theoretical adjusted reference price of MFCB shares is RM3.90.
Apart from the share split exercise, MFCB also posted a record one-fold jump in net profit to RM321.29 mil (FY2019: RM153.67) for its FY2020 on the back of a 9.3% rise in revenue to RM767.13 mil (FY2019: RM701.93 mil).
For the quarter under review, MFCB’s net profit added 12% year-on-year (yoy) to RM93.05 mil (4Q FY2019: RM83.18 mil) and 4% on a quarter-on-quarter (qoq) basis (3Q FY2020: RM89.5 mil).
The company’s board is declaring a second and final dividend of 6.5 sen/share for its financial year ended Dec 31, 2020 – which together with an earlier first single-tier dividend of 6 sen/share paid on Dec 2 last year – would total 12.5 sen/share (2019: 6 sen/share).
Pending the announcement of the share split exercise, MFCB was suspended during today’s morning session with trading to resume during the afternoon session.
MFCB was last traded at RM8 yesterday. – Feb 26, 2021
