JF Technology proposes issuing up to 388 million free warrants to shareholders

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JF Technology Proposes Issuing Free Warrants

Highlights

JF Technology proposes issuing up to 388 million free warrants at a ratio of two warrants for every five existing shares, subject to Bursa and EGM approval.
Each warrant entitles its holder to buy one new share at an exercise price to be set later (with a maximum premium/discount of 20%), with completion targeted for the first half of 2027.
JF Technology aims to capitalise on semiconductor demand and strengthen its capital without incurring interest costs, while its shares are up 61.96% YTD at 74.5 sen (market cap RM722.7 million).

This article was translated from the original. Read the original version by our correspondent here.

Proposal details and implementation timeline

The Edge Malaysia reported that JF Technology will implement the proposed bonus issue at a ratio of two free warrants for every five shares held, according to a company statement on Thursday.

This means that holders of 1,000 JF Technology shares will receive 400 warrants at no cost. Each warrant entitles its holder to buy one new share at an exercise price to be set within five years.

Although the warrants will be distributed free of charge, shareholders will have to pay the exercise price if they choose to convert them into ordinary shares. JF Technology said the final exercise price will be determined later, at a discount or premium not exceeding 20% to the company's five-day volume-weighted average share price before the pricing date.

The proposal remains subject to approval by Bursa Malaysia Securities Bhd and shareholders at an extraordinary general meeting. The company expects the exercise to be completed in the first half of 2027.

Funding implications and semiconductor outlook

Group managing director Datuk Foong Wei Kuong said the proposal aims to reward shareholders while encouraging broader investor participation and improving trading liquidity. He said the exercise of the warrants could also strengthen the capital base and shareholders' funds, while providing additional working capital when the warrants are converted, without incurring interest costs as with bank loans.

Chief executive officer Andy Goh Joo Hwa said the group aims to capitalise on growing demand for semiconductor test solutions, particularly in artificial intelligence, high-performance computing, automotive and robotics. He said the group currently serves around 280 customers and still has room to expand production at its Test Contacting Centre of Excellence in Kota Damansara.

This is not the first time JF Technology has issued bonus warrants. In 2021, the group issued about 462 million free warrants alongside a bonus issue of three new shares for every one existing share, and the warrants expired in January 2026.

JF Technology shares closed down 1.5 sen, or 1.97%, at 74.5 sen on Thursday, giving the group a market capitalisation of RM722.7 million. The shares have risen 61.96% year to date.

In our earlier coverage of the 2027 Budget allocation for high-value semiconductors, we explained how government and related-agency funding is intended to help local companies move up the value chain, including into integrated circuit design and stronger R&D and innovation. The article also highlighted the importance of bringing investment projects to fruition, deepening domestic supply chains and ensuring productivity gains translate into broader economic benefits, including higher wages.

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