KUALA LUMPUR (June 18): Euro Holdings Bhd’s share price gapped down at the opening bell. The counter opened at a sharply lower price of 85 sen, plunging 29.75% or 36 sen from yesterday’s closing at RM1.21.
Soon, the stock managed to pare losses and crawl back to the positive zone within the first trading hour.
Still, sellers continued to emerge. As at 10.30am, the counter was trading at RM1.11, down 10 sen. A total of 188.57 million shares changed hands in less than two hours into trading, making it the second most traded stock.
While the investing fraternity was wondering why the big drop in Euro Holdings’ share price, which hit limit down for two consecutive days, caught many by surprise, it announced the termination of its proposed four-for-one bonus issue, an announcement that is not expected to lend support to its share price.
Yesterday, the property developer cited volatility in its share price as the reason to cancel the bonus issue.
“The board may consider other corporate exercises to enhance stakeholders’ value and will make the necessary announcement(s) in due course,” it said.
The group’s shares hit limit down on Tuesday and Wednesday. It sank 29.65% or 51 sen to RM1.21 on Wednesday after plunging 29.8% or 73 sen to RM1.72 on Tuesday.
Following the heavy selldown, Bursa Malaysia froze the lower-limit share price of the group at RM1.21.
When contacted, the management told The Edge that it was not aware of any reason or development that could have caused the sharp fall in its share price.
To recap, Euro Holdings in March proposed a bonus issue of up to 3.21 billion shares on the basis of four bonus shares for every one share held. This was the second bonus issue in less than six months. It had a two-for-one bonus issue, involving the issuance of up to 534.6 million bonus shares, in October last year. The company’s share capital ballooned to 801 million shares after the bonus issue.
Compared to its record high of RM5.62 on Jan 15, the office furniture maker’s share price had plummeted almost 80%. However, it was a penny stock traded at seven sen in March last year before the rally.
Euro Holdings’ latest annual report shows that the company registered a net profit of RM1.45 million for the financial year ended Dec 31, 2020 (FY20) against a net loss of RM10.51 million a year earlier.
Revenue, however, fell to RM64.31 million from RM66.41 million.
For the first quarter ended March 31, 2021 (1QFY21), the group achieved a net profit of RM490,000, compared to a net loss of RM3.06 million a year earlier, while revenue rose to RM16.26 million from RM9.93 million.