KUALA LUMPUR (Sept 3): Oceancash Pacific Bhd shares settled down three sen or 3.61% at 80 sen during Bursa Malaysia's afternoon break today on profit taking after rising past analysts' target prices (TPs) for the stock.
Non-woven fabric manufacturer Oceancash's share price settled lower at 12:30pm after rising to its highest so far today at 85.5 sen. At lunch break, the stock saw 1.44 million shares transacted.
At 80 sen, Oceancash has a market capitalisation of RM198.69 million.
Affin Hwang Investment Bank Bhd analyst Brian Yeoh wrote in a note today that the research firm raised its Oceancash TP to 83 sen from 61 sen and upgraded the stock to "hold" from "sell".
Yeoh said Affin Hwang raised its Oceancash earnings forecasts by 16% and 21% respectively for the financial year ending Dec 31, 2021 (FY21) and FY22.
"Oceancash has proposed to undertake placement of up to 24.5 million new shares, representing up to 10% of its issued shares. For illustrative purposes, assuming the maximum number of placement shares are issued at an issue price of RM0.866/share (10% discount to the five-day volume weighted average market price), Oceancash may raise gross proceeds of RM21 million, to be partially used to finance its expansion.
"Oceancash has earmarked capex (capital expenditure) of RM40 million for the expansion of its hygiene non-woven products, where circa RM18 million is meant for the purchase of one spunmelt non-woven machine, and the balance will be used for the acquisition of land and working capital purposes; the shortfall is expected to be funded through internal funds and bank borrowings.
"We learnt during the analyst briefing that the new machine is much larger, more efficient and versatile compared to its existing machines, with the capability to produce finer non-woven materials, which are largely used in the production of premium-range hygiene products (ie, diapers, sanitary napkins, wet wipes) and personal protective equipment," Yeoh said.
Oceancash had today provided an update to its proposed share placement, which was initially announced on Tuesday (Sept 1).
The company said in a bourse filing today that the listing application in relation to the proposed placement has been submitted to Bursa yesterday.
Edited by Chong Jin Hun