Stock With Momentum: GSB Group

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This article first appeared in The Edge Financial Daily, on December 17, 2015.


GSB Group Bhd (-ve)

SHARES of GSB (Fundamental: 0.45/3, Valuation: 0.9/3) rose 4.8% in active trade to close at 11 sen. Volume was 13 times the 200-day average.

Two weeks ago, GSB fixed the issue price of its proposed private placement shares at 10 sen. The exercise, which requires shareholder approval, will see the company issuing up to 96.8 million shares. This represents up to 20% of the company’s existing issued and paid-up share capital. 

The proceeds from the placement will be used to fund an existing property project in Klang, which has an estimated gross development value of RM58 million.

Interestingly, this is the second time in less than two years that GSB is undertaking a private placement. Previously, the placement shares were also issued at 10 sen.

GSB is involved in property development and the replication of optical discs. The former contributed 60.7% of FYMar2015 revenues with the latter contributing the balance.