On Friday, Centum Investment Company's share price plummeted to a new average low of Sh10.05, marking a significant decline in the firm's valuation in the stock market.
According to market data, the company's market value now stands at Sh6.6 billion, a mere 16.18 percent of its net assets per share of Sh62.09 reported in the half-year ended September.
Centum's net assets stood at Sh41.3 billion, highlighting a substantial undervaluation of the company's shares.
As the bear market continues to affect listed firms, Centum's share price has dropped by a large margin, setting a new 52-week low of Sh9.6 in Friday's trading session.
Over the past 12 months, the stock has declined by 36.2 percent, according to market data.
Despite narrowing its net loss to Sh662.1 million in the half-year ended September, Centum's undervaluation remains a concern.
The company has considered buying back some of its shares to address the undervaluation, but has not yet taken steps to implement such transactions.
Share buybacks could potentially boost the market valuation and increase the stakes of continuing shareholders.
Centum has also announced plans to raise dividend payouts and improve earnings by cutting costs and selling subsidiaries with weak cash-generation potential.
However, the company's weak share price is also attributed to investors' perception of risk and a lack of understanding of its business model.
Centum believes that by reducing debt and increasing investments in liquid and defensive assets, it has addressed the risk perceptions and is working to improve its operations.
