Friday, 27 February 2015

Symphony - Simply Symphonic

Symphony House Berhad is known for its business outsourcing process, share registration solutions and corporate secretarial solutions.

Back then, Symphony shares that is listed in the KLSE had not seen any interest from the public due to it's normal usual day to day business operation which will be unlikely to see any surprise that would be rewarding for the shareholder. In fact, Symphony had been running between the red and black line. However, everything in Symphony took a huge change when CIMB arranged Ranhill Energy and Resources Berhad to be listed in the KLSE through a RTO process.

Let's have a look at the latest price chart of Symphony.

Symphony House Berhad (Symphny -0016) had been trading at the range of 12 to 13 cents before the news of RTO came into picture. Prior to that, Symphony saw it's saw leaped to a high of RM 0.315 in April 2014, where a few occasion had saw more than 150 million of shares change hand. However, the share price had took a consolidation effect which had saw a good consolidation price at the range of RM 0.22.

Symphony got shake up and broke down lower when the global equity market took a plunge over the worries of a sharp plunge in the oil price from October to December 2014, putting Symphony trading at an incredible attractive level at the range of RM 0.15 now.

As time draw closer towards the completion of the RTO process, we will expect to see a build up in the volume, and Symphony will be easily challenging back into the previous support line at RM 0.22, while a higher resistant might be seen at RM 0.30.

Symphony - Transforming to Ranhill

Symphony had been disposing off it's business assets prior to the arrangement for the Ranhill Energy and Resources Berhad RTO process. To date, Symphony had sold Symphony BPO Solutions Sdn Bhd, Xen Solutions Sdn Bhd, Symphony Xen Solutions Pte Ltd and BCS Information System Pte Ltd. Symphony. Currently, Symphony is sitting on a cash pile of RM 40 million, with zero debts on it's belt, translated to a net cash of RM 40million. Symphony last business asset - Symphony HRS, which is looking to be sold for around RM 25 million will possibly put Symphony with a total cash pile of RM 65 million, which could be easily be translated into a cash of 9.8 cents per share

Ranhill Energy and Resources Berhad (RERB) which will be looking to inject approximately RM 800 million worth of water and power asset into Symphony under the exercise will provide the current minority shareholder with an opportunity to benefit from businesses with a more robust prospect. Currently, RERB asset will see it's valuable water concession in Johor and 2 power plant - Powertron which is operating in a full operating capacity. RERB also had exposure in Thailand and China in it's water processing arm. Currently, it's China water processing asset is delivering 270 million liters a day (MLD), and will be looking to boost it's figure to 1000 MLD in the end of 2015.

Under the transformation process, Symphony shares of par value RM 0.10 will be merge in 10 to 1 share, hence par value will become RM 1.00, however, outstanding shares will be shrink into 66 million shares. We believe that there will be more corporate exercise that will increase the liquidity of the shares in order to prepare for a RM 800 million asset injection.

The new RERB could be potentially seeing approximately 533.4 million shares at RM 1.50 to reflect a market capitalization of RM 800 million for the value of it's assets injection.

With this inline, there is a possibility of a special dividend from the cash pile of RM 65million in order to avoid the cash dilution to the new shareholder upon their placement. Currently, the cash in hand is translating towards 6 cents a share. (approx RM 40m / 660m shares), which is 40% of the current share price of RM 0.15. Should Symphony HRS be sold, the cash might rise to RM 65 million, which will translate to 65% of the share price at RM 0.15 is net cash in hand.

Symphony will be a very interesting share to be monitor in the coming days due to
- RTO process to Ranhill Energy & Resources Berhad
- Net cash position of RM 40m, and a possibly RM 65million after the sale of Symphony HRS
- Possible special dividend payout to shareholder
- Current cash value being 40% of the share price at RM 0.15
- Huge accumulation at the range of RM 0.20 and above

Transform along? You decide

Bone's short term TP: RM 0.22

Cheers and have a nice day


Wednesday, 25 February 2015

February Focus - Dataprep - The Wild Card

Dataprep Holdings Berhad is a Malaysian based ICT company that had been involving in the trading of IT related products, payment solutions, Enterprise Content Management System and also consultation and deployment on data warehouse and cloud computing infrastructure and services.

Back then, Dataprep had limbed into financial difficulties, however, the company was being rescued when Encik Ahmad Rizan took over the helm on 2011 and padded the company with more than RM 100 million in orderbook from government linked entities such as EPF, Tenaga Nasional, Telekom Malaysia and Celcom Axiata Berhad.

While those contracts are just good enough to keep Dataprep alive, major shareholder, Datuk Lim Chee Wah, which is the youngest son of the late Lim Goh Tong definitely have a high fuel package instill for Dataprep.

Let's have a quick glance at Dataprep recent share price performance.

Dataprep Holdings Berhad (Dataprp - 8338) had been consolidating at the support price of the previous trading range of RM 0.245 to RM 0.30 before the equity shake up that is caused by the oil markets. On the 21st August 2014, Dataprep had saw more than 30 million of shares traded, with an almost full solid white candle to support the fact on the heavy accumulation behind the scene.

Recent filings had also shown that Director Muhammad Fauzi Bin Abd Ghani had previously accumulated on Dataprep at the range of RM 0.245 to RM 0.255.

With the current price at RM 0.215, Dataprep will be looking to inch back to it's previous consolidation region at RM 0.245, while a greater volume will be able to charge Dataprep forward towards testing RM 0.30.

Dataprep - Double Wild Card

Dataprep had been appointed as the main ICT and project delivery partner for the mega USD 6 billion (RM 21.7 billion) major international tourism destination in China - Secret Garden Resort which is in the city of Chong Li, Province of Hubei, China. The project is also the brainchild of major shareholder Datuk Lim Chee Wah, who is the principal shareholder for Dataprep and project owner, VXL group.

Dataprep, which will be monitoring all ICT related project, which include hardware to software will be seeing more than 20 projects in phases to be implemented from stage to stage for a period of 10 to 12 years. With the huge project across the line, Dataprep will be appointing vendors to implement the work, and will be taking 6% from the total project value. IT had been estimated that the total value allocated for the ICT related works will be looking to worth around RM 800 million to RM 900 million, putting a good 54 million net income in the pipeline.

The Genting based Secret Garden Resort had already started its operation with 5 star Genting Grand Hotel. With the cutting edge facilities and breathtaking scenery, Secret Garden Resort will be targeting to host the Winter Olympic in 2022.

Dataprep, being one of the project delivery partner in the building and creation of Secret Garden Resort will be looking to see steady flow of recurring income from all the ICT related matters in the resort.

While good thing never comes alone, the second wild card that is in Dataprep hand will be the reformation in card payment system in Malaysia.

With Malaysia heading towards a cashless society, Bank Negara undertook significant reformation in the card payment industry which will remodel the way Malaysian make payments. Amongst the framework including
- Increasing card terminal to 800,000 by 2020 from the current 200,000, in which a portion of them to be wireless and contactless.
- Contactless terminal consist of 30% of all terminals.
- All debit card to be recarded with contactless enabled.
- All card transaction to be using PIN based by 2017.

Bank Negara will be targeting to see an increase of 96,000 terminals a year and will also foresee to see the debit card usage to increase by 10 fold by year 2020.

Based on the target of 800,000 terminal, at the average terminal rental of RM 100 per month will be equivalent to a big sum of RM 80 million of terminal rental's revenue in the industry. While GHLSYS had been the primarily known company in providing terminal, the overlooked Dataprep will not be shy of putting a fierce front in competing with the others competitor for this big chunk of cake that is prepared for them.

While the downstream payment system will see an increase in Terminal, close sources had tipped off the involvement of Dataprep in the upstream system upgrade in banks and financial institution to improvise the system to replace the current signature based to the PIN based verification during the transaction.

Dataprep will be a possible dark horse in 2015, and could be a raging bull in 2016 to 2017. At the current price of RM 0.215, Dataprep will be interesting to be vested in based on:
- Involvement as Core ICT and Project Delivery Partner for Secret Garden Resort in China
- Project implementation cost looking to be value at approx RM 800 - 900 million, in which Dataprep will be netting 6% from the total cost.
- Steady income flow from Secret Garden Resort from maintenance and upgrading contract related to ICT.
- Bank Negara reformation in Payment System, encouraging more terminal usage.
- Terminal rental business revenue worth RM 80 million a month by 2020.
- Dataprep involvement in the security upgrade of the payment system through 55% owned Solsis (M) Sdn Bhd, a MOF registered Bumiputera IT Service provider, partnering NSFOCUS from China.

On a long term outlook, Dataprep could be easily looking to trade towards RM 0.50 once all the puzzle pieces assemble together.

Throw in the wild card? You decide

Bone's short term TP: RM 0.30

Cheers and have a nice day


Tuesday, 24 February 2015

Ancom - Brewing Out RedBerry

Ancom Berhad is the holding company that had a diversified business ranging from petrochemical products, logistics and media & advertisement sector. It's listed subsidiaries includes Ancom Logistic Berhad and Nylex (Malaysia) Berhad.

Ancom Berhad had been embroiled with in the hot screen back then at the end of 2013 and beginning of 2014, which had news circulating that the company had sold it's "The Malaysian Reserve" financial daily to billionaire Syed Mokhtar after the division had been chalking up huge cost into the company financial.

However, the sale of "The Malaysian Reserve" had yet to come to public even though close sources confirmed on the deal, putting a big question mark on the next possible corporate moves in the coming days.

Let's have a quick look at the chart of Ancom

Ancom Berhad had been trading at the range of RM 0.55 to RM 0.70 before the weakened global outlook due to weaker oil prices sent almost all equity down the drain. While a number of companies had saw their prices bounce back into the previous trading zone, Ancom had yet to see such an action for the time being.

Ancom had been heavily accumulated during the period of May to July 2014. Solid accumulation are sighted with insider buying averaging at the range of RM 0.55, of which most of it being open market purchases from Dato Siew Ka Wei, the Managing Director of the company.

A quick resistant outlook will see Ancom testing RM 0.55, while breaking above that will put Ancom back into the previous trading range between RM 0.55 to RM 0.70.

Ancom - Brewing out the Berry

The recent financial result had saw Ancom inching back to the black. Although the group had recorded a lower revenue, the profit margin had increase due to lower operating expenses, which could be highly due to the disposal of "The Malaysian Reserve" division to be bankrolled by Syed Mokhtar. The latest FYE 2014 for Ancom's media division saw a segmental profit of RM 1.3 million compared to a segmental loss of RM 25.4m in FYE 2013.

It had been a known move that Dato Siew had roped in Datuk Wong Sai Wan to be in charge of Redberry Director of Special Projects, which will be spearheading their new online news portal - The Malay Mail.

While The Malay Mail is not directly linked with Ancom, it's connection to the group is through the common shareholder of Dato Siew Ka Wei and non independent director Tan Sri Al Amin Abdul Majid, both having indirect stakes of 46.79% in the Malay Mail. Currently, The Malay Mail is running on a deficit with net weighing around RM 10million, however, will be looking to turn into the black during FYE 2015.

According to insider sources which are familiar with all the events and happening brewing in Ancom, Ancom had been looking to list their media arm Redberry Sdn Bhd into the market, and inject The Malay Mail into RedBerry as well. However, Redberry Sdn Bhd most prized asset is from the 75% owned Meru Utama Sdn Bhd, which had concession rights to advertising mediums in the KLIA and KLIA , in which the latest registered profit propping up to RM 5.68 million.

Insider prediction is that Ancom will probably privatized Meru Utama away from Redberry Sdn Bhd and inject The Malay Mail so to prepare their media arm for a public listing. Meru Utama, a solid cash cow for Ancom, could be looking to worth more than RM 120million due to it's exclusive rights in the KLIA and KLIA2 airports.

Ancom is currently running in tight timeline, and the urgency to list their media arm into the public to leverage on the public for the business is a vital move for Dato Siew Ka Wei and Ancom.

Ancom will be an interesting outlook due to
- Huge corporate action in the coming days
- Trading at support level of RM 0.45 range, with insider buying range at RM 0.55 and above
- Trading at 35% of the NTA of RM 1.30
- Possible sale of Meru Utama Sdn Bhd which is worth more than RM 120 million
- Unpublicized sale of the Malaysian Reserve financial daily
- 47% shareholding in Ancom Logistic Berhad, which is sitting on net cash of RM 29 million.
- Possible listing of Media Arm - Redberry Sdn Bhd

Boil the Redberry Soup? You decide

Bone's short term TP : RM 0.60

Cheers and have a nice day