KUALA LUMPUR (July 22): Heveaboard  Bhd rose to 11 sen or 10.48% to RM1.16, after the chipboard maker’s share price went ex of a 4-for-1 share split yesterday.

As at 10.44am, Heveaboard (fundamental: 2.1; valuation: 1.4 )’s share pared gains and settled at RM1.12, with some 10 million shares having changed hands.

Meanwhile, Heveaboard's warrant also rose 7.28% or 5.5 sen to 81 sen, with 1.10 million units done.

The chipboard maker’s share price went ex of a 4-for-1 share split yesterday (July 21), which saw its share base enlarged by fourfold to about 400 million shares. The par value of the ordinary shares was also reduced to RM0.25, from RM1.00 each.

Heveaboard’s warrants will also be entitled to a 4-for-1 split and the exercise price will be adjusted down accordingly to RM0.25, from RM1.00.

The entitlement date for the share split is July 23.

In a note today, CIMB viewed the exercise positively, as it will improve Heveaboard’s trading liquidity substantially by lowering the absolute entry price for the stock.

“Our earnings per share (EPS) and price-earnings ratio (PER) estimates are adjusted proportionately. With the strong US dollar, we are very confident about FY15’s earnings visibility. Our target price is increased, as we roll over our SOP-based valuation using FY16’s EPS,” CIMB said.

The research firm maintained an “add” call for the stock, “with potential catalysts being the share split and strong second quarter (2Q) results next month.”

With the continued weakness of the ringgit, CIMB is confident Heveaboard will be able to achieve and possibly exceed its FY15 EPS forecast, which is based on RM3.60/1 US dollar vs. 3.80 now.

“Investors should continue accumulating the stock. We believe that investors will continue to reward US dollar plays in 2015-16. We expect Hevea to turn net cash by end-15, putting it in a strong position to increase its dividends substantially,” it added.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)