This article first appeared in The Edge Financial Daily on September 18, 2019

Serba Dinamik Holdings Bhd (+ve)

SHARES in Serba Dinamik Holdings Bhd (fundamental: 1.8/3, valuation: 1.7/3) triggered our momentum algorithm yesterday for the second time this year. The counter closed three sen or 0.69% lower at RM4.34 yesterday, with a volume of 7.02 million shares, higher than its 200-day average volume of 2.41 million shares.

Serba Dinamik recently proposed three corporate exercises comprising a two-for-three share split, two-for-five bonus issue and two-for-five free warrants.

The bonus issue would entail the issuance of 881.1 million new shares, while the free warrants total 881 million. Assuming the exercise price of the warrants is at RM2.56, and that all warrant holders exercise their warrants, the maximum proceeds to be received by Serba will amount to RM2.26 billion.

The proceeds raised will be utilised for capital expenditure and for working capital, said Serba. At the current share price, Serba Dinamik is trading at 2.82 times its book value.