WANGUO GOLD GP (03939) announced that its board has proposed a share split, under which each existing issued and unissued share with a par value of HK$0.10 will be subdivided into four shares with a par value of HK$0.025 each.
Upon the share split taking effect, the company's authorized share capital will be HK$1 billion, divided into 40 billion subdivided shares, of which 4.425 billion subdivided shares will be issued and fully paid or credited as fully paid (assuming no further share issuance or repurchase occurs between the announcement date and the share split effective date).
As of the announcement date, the shares are currently traded on the Stock Exchange in board lots of 2,000 shares each. The board further proposed that, after the share split takes effect, the board lot size for trading subdivided shares on the Stock Exchange will be adjusted to 500 subdivided shares per board lot.
The proposed share split will reduce the par value and trading price per share while increasing the total number of issued shares. Based on the closing price of HK$30.74 per share on the announcement date, the market value of one board lot (2,000 shares) was HK$61,500. The estimated market value of one board lot (500 subdivided shares) is theoretically expected to decrease to HK$3,842.50 immediately after the share split takes effect.
The board believes the share split will lower the investment threshold, improve the liquidity of the company's share trading, and attract more investors, thereby broadening the shareholder base. In reaching this decision, the board also considered general feedback from shareholders, including suggestions that a share split could potentially enhance market participation and improve trading liquidity.
Consequently, the share split is expected to result in a reduction in both the trading price per share and the market value per board lot. Given current market conditions, higher liquidity would provide investors with greater flexibility in trading the company's shares, thereby facilitating future growth and development.