KUALA LUMPUR (Feb 28): JAKS Resources Bhd dropped as much as 22 sen or 18% after the builder and water-pipe manufacturer reported a fourth quarter (4QFY16) net loss at RM24.03 million, against a net profit of RM29.22 million a year earlier. 

JAKS' proposed private placement of up to 43.84 million new shares or about 10% of its existing issued share base could have also led to the stock's decline. This is in anticipation of earnings per share (EPS) dilution due to a larger share base. 

JAKS shares fell to their lowest so far today at RM1.01. At 11:06am, the stock cut losses at RM1.06, with some 26 million shares traded. 

The fourth most active stock on Bursa Malaysia was also the 10th-largest decliner.

Affin Hwang Investment Bank Bhd wrote in a note today that the research firm maintained its "buy" call for JAKS shares, but with a lower target price (TP) at RM1.70 versus RM2 previously.

"We are still maintaining our BUY call on the stock, with a lowered TP of RM1.70, despite lowering our EPS by 22% and 8% for FY17 and 18E, to account for the changes recognition of EPC (engineering, procurement and construction) contract and also the dilution on the impending 10% new share placement," Affin Hwang said.