Pekat’s private placement to pare its borrowings

PETALING JAYA: Electrical engineering and solar energy company Pekat Group Bhd’s plan for a private placement is expected to dilute its 2025 to 2027 earnings per share (EPS) by about 9% to 10%, analysts say.

Phillip Research downgraded the stock to a “hold” from a “buy” rating on valuation grounds with the stock currently trading at 21-times forward price-earnings ratio.

The research house said it is neutral about the corporate exercise pending the finalisation of the issue price to be determined at a later date.

The research house retained a target price RM1.57 sen a share for the stock and its EPS forecast pending the completion of the corporate exercise in the third quarter of this year.

Pekat has proposed a private placement of up to 66 million new shares, or 10% of its enlarged share capital, increasing its total share base to 727 million under a maximum scenario.