Reiterate NEUTRAL Maintain Target Price (TP): RM1.88 (ex- RM1.25)
• UEM Land Bhd (ULHB) has proposed a 1-for-2 rights issue priced at RM0.80 per share to raise RM971.3m. A total of 1214.1m shares will be offered to existing shareholders. 77.14% will be subscribed by the UEM Group.
• The issue price of RM0.80 per rights share is a 44.1% discount to the counter’s 5-day moving average (RM1.43) and -34.4% to the derived theoretical ex-rights price of RM1.24.
• Maintain NEUTRAL with revised Target Price of RM1.25 ex-rights, derived from a 25% discount to RNAV. We advise existing shareholders to subscribe to the rights share to further increase their investment and equity participation. Despite our ex-price TP providing a mere +2.4% upside to the counter, the subscription of the rights is a viable option for investor to average down cost.
Note the ULHB traded at its highest at RM2.01 per share on 15th June 09.
Below: UEMLAND of right issue (clcik to enlarge)
