SIIC

SIIC: SIIC proposed to place 1,000m shares at $0.158/share with joint placement agents- Jefferies Singapore and Credit Suisse (Singapore), to raise $154.8m net proceeds to fund expansion, general working capital and repay existing debt. The fund raising will raise share capital by 11.6% to 9,589.3m shares, while net gearing ratio will improve from 49.3% to 25.8%. Maybank-KE reckons that the 7.6% discount placement price is reasonable and SIIC could be building up its war chest for future acquisitions to boost its water treatment capacity. House maintains Buy rating on the counter, but lowers TP to $0.20. We hypothesize that share price of SIIC may ease towards the placement price, given the dilution impact on earnings. At $0.164, SIIC trades at 27.3X forward P/E and 2.5x P/B.