Following the announcement by Prince-affiliated Kingboard Holdings that it would reduce its shareholding, market observers expect the share price trend after the earnings announcement to require continued monitoring.
Kingboard Holdings is reducing its shareholding, which could affect the valuation of Kingboard Laminates. Some analysts believe the company has entered a phase in which its equity capital strategy will prompt a reassessment of its current valuation.
The market has suggested that as capital management provides less support for the valuation, the earnings power of the underlying businesses will become the share price's primary driver over the long term.
While holding companies generally trade at a discount and are considered likely to have their price-to-book ratio (PBR) constrained at 1x or below over the long term, some also believe that a recovery from current levels will still take time.