This article first appeared in The Edge Financial Daily on June 21, 2017

Xian Leng Holdings Bhd (+ve)

SHARES in Xian Leng Holdings Bhd (fundamental: 2.25/3, valuation: 0.9/3) triggered our algorithm yesterday for the first time this year. The stock closed up 7.5 sen or 14.42% at 59.5 sen with 2.75 million shares traded, exceeding its 200-day average volume of 103,379 shares.

Xian Leng plans up to 10% private placement or 7.23 million shares to independent third parties to be identified later that could raise up to RM3.33 million gross proceeds for the use of staff salaries and future business projects.

For illustrative purposes, the proceeds are on the assumption that the placement shares are issued at an indicative issue price of 46 sen based on about 9% discount to the volume-weighted average market price of Xian Leng shares for the five market days up to June 13 of 50.55 sen per placement share.

At its current share price, the stock is trading at 0.99 times its book value.