KUALA LUMPUR: Apex Healthcare Bhd's recent proposed bonus issue will enhance the marketability and liquidity of its shares, thereby making it more appealing to a wider base of shareholders, said Public Investment Bank Bhd (PublicInvest).
Apex Healthcare's share capital of RM130.06 million consists of 477.7 million shares.
With the assumption of a total of 3.2 million outstanding employees share option scheme being exercised, the bonus issue will bring the share base to 721.3 million.
PublicInvest said the bonus issue would be issued as fully paid shares at zero consideration and without capitalisation of Apex Healthacre's reserves.
The proposed bonus shares will not be entitled to the final single-tier and special dividend of 3.5 sen and 2.0 sen respectively which was proposed along with the company's fourth quarter 2022 results announcement.
"This is because the entitlement date for the proposed bonus issue will be fixed after the entitlement date for the proposed dividends. We are positive as we think that the bonus issue will enhance the marketability and liquidity of its shares, thereby making it more appealing to a wider base of shareholders," PublicInvest said.
While the corporate exercise is unlikely to have any impact on Apex Healthcare's fundamentals, the bank is positive on the enhanced liquidity and marketability of the shares in the long run.
On a per share basis, PublicInvest said Apex Healthcare's financial year 2023 (FY23) earning per share (EPS) would be diluted from 19.6 sen to 12.9 sen based on the enlarged share base of 721.3 million shares.
"Should the proposed bonus issue go through, our target price will be adjusted subsequently to RM2.60. We remain on our Neutral call on Apex Healthcare, with an unchanged target price of RM3.83," it added.
The proposed bonus issue is expected to be completed by the second quarter of 2023.
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