This article first appeared in The Edge Financial Daily on February 22, 2018

KUALA LUMPUR: Gopeng Bhd, which announced a 62.6% leap in its quarterly net profit, has proposed a one-for-two bonus issue to reward shareholders.

The bonus issue will also help increase its capital base to reflect its current scale of operations and assets employed.

According to its filing with Bursa Malaysia, the proposed bonus issue entails the issuance of up to 89.66 million new shares to be credited as fully paid up on an entitlement date to be determined later.

Gopeng said based on the existing issued share capital of the company of RM89.66 million comprising 179.32 million shares as at Feb 12, a total of 89.66 million bonus shares may be issued pursuant to the proposed bonus issue.

Advised by UOB Kay Hian Securities (M) Sdn Bhd, Gopeng expects to complete the transaction by the second quarter of this year.

In a separate filing, the oil palm plantation firm announced that its net profit jumped 62.6% to RM1.23 million for the fourth quarter of the financial year ended Dec 31, 2017 (4QFY17), from RM759,000 a year ago, on lower cost of sales arising from the adjustment of allocation of provision for manuring cost.

Quarterly revenue grew 11.22% to RM3.91 million from RM3.51 million due to higher fresh fruit bunch production, said Gopeng.

For the full FY17, Gopeng’s net profit expanded by 24.83% to RM5.54 million, compared with RM4.44 million in FY16. Revenue clocked in 36.39% higher at RM15.51 million versus RM11.37 million

Going forward, Gopeng, which is also involved in property development, said the group’s performance is dependent on palm oil prices and production.

Hardly traded Gopeng shares were last changed hands at RM1.30, giving it a market capitalisation of RM233.13 million.

Over the past 12 months, the counter has gained about nearly 10%.