The Capital Group of Companies, a leading asset manager, now has a higher deemed stake in newly-listed Nanofilm Technologies International. This follows the purchase of 171,100 Nanofilm shares at $4.38 on Dec 30, 2020 by Capital Research and Management Company, the investment management firm and one of the cornerstone investors of Nanofilm’s recent IPO.
According to Nanofilm’s prospectus, Capital Group invested in the company via two funds: SMALLCAP World Fund and American Funds Insurance Series — Global Small Capitalization Fund. Besides Capital Group, other cornerstone investors which bought a total of nearly 104.3 million shares included several subsidiaries of Temasek Holdings.
Following the Dec 30 acquisition of additional Nanofilm shares from the open market, Capital Group now has a deemed stake of 39.5 million shares, equivalent to 6%, up from 39.3 million shares, or 5.98%.
Nanofilm, which provides coating services, was one of the hottest IPOs last year. Via its heavily-subscribed offering, the company raised $470.1 million by selling IPO shares at $2.59 each. Immediately before its trading debut, Nanofilm already had a market value of more than a billion dollars, making it the first so-called “unicorn” listing on the local bourse.
Since then, following a couple of very bullish analysts’ calls, Nanofilm’s share price surged 83% to close at $4.74 on Jan 4. UOB KayHian on Dec 10 raised its target price to $4.52 from the $4.07 target made on Nov 26. CGS-CIMB was even more bullish, giving a price target of $5.52 based on Nanofilm’s planned capacity increase.
In 1HFY2020 ended June 30, 2020, Nanofilm’s earnings rose 62.3% y-o-y to $18.5 million while revenue rose 40.9% y-o-y to $77.8 million.
On Dec 9, 2020, Nanofilm announced that with effect from Dec 21, 2020, it would be included in three indices: the FTSE ST Small Cap Index, FTSE ST China Index and FTSE ST Singapore Shariah Index.
“This inclusion looks to increase the overall awareness and exposure of the group to index funds and bring about higher trading liquidity to investors globally,” says executive chairman Shi Xu. “It is also in line with our group’s continuing outreach to a high quality and diversified institutional investor base as we continue to grow and fortify our market position,” he adds.
Myanmar woes
Meanwhile, Aberdeen Asset Management on Dec 30 sold just over a million shares of Yoma Strategic Holdings at an average price of 29.5 cents. The UK-based fund manager is now left with just below 135 million shares, equivalent to 5.988%, down from 6.033% previously.
On Nov 28, Yoma, known for its multitude of businesses ranging from property to financial services in Myanmar, recorded a net loss of US$44.6 million ($59 million) for the six months ended Sept 30, 2020. This compared to losses of US$57.5 million a year ago. Revenue recorded was US$51.2 million, a slight improvement of 25.3% y-o-y from US$40.8 million a year earlier.
Yoma attributed its losses to the Covid-19 pandemic that hurt its higher-margin consumer business. In addition, it booked fair value losses for its property business too.
For the full year ended Sept 30, 2020, Yoma reported losses widened to US$60.5 million from US$36.9 million in the preceding year. Full-year revenue rose 13.6% to US$103.4 million from a year ago.
Despite two straight years of losses, Yoma is “cautiously optimistic” on the outlook of Myanmar’s economy, not just the anticipated recovery from Covid-19, but also a re-elected government which is seen to focus more on growth and attract more foreign investment in its current five-year term.
