RS feels its share price is too low, planning to spend 470 million baht on treasury stock
Ladprao - Darm Nana, Chief Financial Officer of RS Public Company Limited, revealed that the stock price of RS from mid-2015 to today is lower than it should be. The company has strong financial status with good liquidity and retained earnings are high enough for the company to repurchase shares. So the resolution of the board of directors regarding proposed share repurchase programs is approved to increase share price, share liquidity, earnings per share (EPS) and return on equity (ROE) to benefit both the investors and the company.
The company budgets 470 million baht to repurchase 50.70 million shares from the Stock Exchange of Thailand, or 5.02% of its paid-up share capital. The repurchase period is six months, from February 25 to August 24, 2016. According to analyst researches in the market, the highest target share price is expected to be 17.20 baht, or 81% higher than the current share price (compare to the closing price as of February 1, 2016). It is estimated that the share repurchase program will increase the company’s earnings per share (EPS) and return on equity (ROE).
“We think that RS share price is too low compared to the company’s fundamentals, and we are assured that the company has a lot of potential in the future, with its business plans and strategies which will make it the leader of Thailand’s media industry. Share repurchase program is a good option with limited risks, and therefore we have decided to repurchase our shares from the market. I believe that this decision will boost our investors’ confidence. Although the economy has not fully revived, they can be assured of our strategies and future. It also proves that RS is financially strong and has enough liquidity so we decide to go ahead with the repurchase program,” said Darm.