Monday, 22 September 2014

September Special - BJCorp - The Rise Of The Empire

Berjaya Corporation Berhad is a no stranger to most of the Malaysian investor and trader. The Berjaya Corporation group of companies started back then at 1984 when founder, Tan Sri Vincent Tan acquire a controlling stake in Berjaya Industrial Berhad from Broken Hill Proprietary Limited (Australia) and National Iron & Steel Mills Limited (Singapore). Under the guidance and leadership of Tan Sri Vincent Tan, he had managed to turn the diversified conglomerate which is now under the helm of Berjaya Corporation Berhad (BJCorp - 3395)


Berjaya Corporation Berhad, with a total employee strength of more than 16,000 had been engaged in a diversified business portfolio ranging from
- Consumer Marketing, Direct Selling & Retail
- Financial Services
- Hotels, Resorts, Vacation Timeshare & Recreation Development
- Property Investment and Development
- Gaming and Lottery Management
- Environmental Services and Clean Technology Investment
- Motor Trading and Distribution
- Food & Beverages
- Investment Holding and others




While Berjaya Corporation Berhad had a wide span of subsidiary that cover a lot of business, let's have a quick look at some of the listed business entity that is currently held direct and indirectly by Berjaya Corporation Berhad.

1. Berjaya Sports Toto Berhad (BJToto - 1562)
Market Cap - RM 5.039 billion
BJCorp direct and indirect interest of 48.64% in BJTOTO is equivalent to RM 2.45 billion

2. Berjaya Media Berhad (BJMedia - 6025)

Market Cap - RM 125.77 million
BJCorp direct and indirect interest of 13.39% in BJMedia is equivalent to RM 16.84 million

3. Berjaya Food Berhad (BJFood - 5196)

Market Cap - RM 894.13 million
BJCorp direct and indirect interest of 51% in BJFood is equivalent to RM 456 million

4. Berjaya Asset Berhad (BJAsset - 3239)

Market Cap - RM 1.075 billion
BJCorp direct and indirect interest of 16.38% in BJAsset is equivalent to RM 176.08 million

5. Berjaya Land Berhad (BJLand - 4219)

Market Cap - RM 4.2 billion
BJCorp direct and indirect interest of 62.5% in BJLand is equivalent to RM 2.625 billion

6. Berjaya Auto Berhad (BJAuto - 5248)

Market Cap - RM 2.618 billion
BJCorp direct and indirect interest of 50.48% in BJAuto is equivalent to RM 1.321 billion

7. Atlan Holdings Berhad (Atlan - 7048)

Market Cap - RM 1.179 billion
BJCorp direct and indirect interest of 26.3% in Atlan is equivalent to RM 310.07 million

8. Stemlife Berhad (Stemlfe - 0137)
Market Cap - RM 115 million
BJCorp direct interest of 10% is Stemlife is equivalent to RM 11.5 million

9. Magni-Tech Industries Berhad (Magni - 7087)
Market Cap - RM 346 million
BJCorp direct interest of 23.2% in Magni is equivalent to RM 80.27 million

10. Berjaya Philippines Inc (BCor.PS)
Market Cap - RM 1.665 billion
BJCorp direct interest of 88.26% in Berjaya Philippines Inc is equivalent to RM 1.469 billion


Taking the 10 listed subsidiary that is under Berjaya Corporation Berhad, that is already commanding a whooping RM 8.915 billion. This had yet to take into consideration of the unlisted entity which comprises of Cosway, Berjaya University College of Hospitality and some others companies.


While digging deeper into it's tangible asset and properties held under BJCorp, it had been a interesting find that most of the lands and properties held under it had been mostly dated back then until 1990 which had not gone through an updated valuation on the current market prices of the assets.




BJCorp own several notable prime pieces of land which is at Jalan Ampang, Mukim Petaling, and also a hot rising spot in Taman Tun Abdul Razak. Most of the land held are freehold lands. Assume the land value increase by a skeptical 50%, the land revaluation reserves is sitting at more than RM 500 million.

At the current market capitalization of RM 2.107 billion for BJCorp, this is definitely a grossly undervalued, underestimated and underrated share which had been bolstering it's presence in the South East Asia, China, Hong Kong, Korea and London. While it is hard to determined the true value in Berjaya Corporation Berhad, the tangible and intangible assets and the on going business and prospectus will definitely see Berjaya Corp being a conglomerate of more than RM 10 billion in market value.


BJCorp - Hot Brewing Prospectus Ahead

The coming years for Berjaya Group will be definitely be very interesting and powerful which a number of huge mega projects that will be taking place, as well as penetration into the new market. On the list will be

1.) Berjaya Land mixed development project valued at RM 6.3 billion on the 244.79 acres in Selangor Turf Club land at Sungai Besi. This development which had been a costly wait for BJLand had finally saw a green light after the relocation of STC to the new 750 acres of land in Bukit Tagar. Recent development had saw BJCorp disposed 15 parcels of land totaling 10,726 acres together with palm oil mill in Selangor to Tagar Properties Sdn Bhd for RM 743m, putting a net gain of RM 147 million.

The green light is further confirmed when BJCorp had increased it's stake in BJLand using wholly owned subsidiary Bizurai Bijak Sdn Bhd to acquire 4.22% in BJLand, raising it's total stake to 62.5%.


2.) Berjaya Waterfront mixed commercial and high end residential development in Johor will be another big hit in the Berjaya Group. Back then in December 2013, Berjaya Times Square Sdn Bhd had sold 20% stake to Sultan Ibrahim Ismail Sultan Iskandar of Johor. According to sources, Berjaya Waterfront will be replicating another mini Bukit Tinggi in JB which will comes with the spices of slot machine in the prime land spreading over 17 acres. Atlan, another subsidiary of Berjaya Corp will be also in the highlight of the Berjaya Waterfront development.

The latest source will see the possible entry of Singaporean Tycoon - Peter Lim Eng Hock into the Berjaya Waterfront development as well through the newly acquire vehicle - TMCLIFE
Peter Lim had an extensive wide range of interest, including healthcare, real estate, automotive, fashion, food and beverages as well as education.

3.) BJCorp winning the tender to operate Vietnam's computerized lottery system, which will involved in the investment, procurement, installation and operation of the system. The project will be undertaken by Berjaya Gia Thinh Investment Technology Co Ltd (Berjaya GTI), which is 51% owned by Berjaya Lottery Vietnam Ltd, which in turn is 80% owned by BJCorp and 20% by BJToto. As of 2014, the total population of Vietnam stands at 92.5 million people, which is 3 times the population of Malaysia. As being the sole operator for a 92.5 million population of people in Vietnam, and the strong urge of Vietnamese to gamble, the legal lottery system will be looking to take a skeptical 10% of population, which will be translating to 9.25 million of participants.



All this hot brewing development will be very powerful and enormous when launched. While doing so, insiders had been seen accumulating the shares of BJCorp in a gradual manner at the range of RM 0.50. Executive Director Dato Zurainah Binti Musa had been accumulating BJCORP-LC at the price range of RM 0.28, translating to paying RM 0.56 for a mothershare in BJCorp, which represent a 12% premium over the mother share which is priced at RM 0.50.



I believe BJCorp is definitely a good and prospective investment at the range of RM 0.50 based on
- Berjaya Land RM 6.3 billion GDV at Sungai Besi
- Berjaya Waterfront with a possible more than RM 10 billion worth of GDV, with a potential entry from Singaporean developer - Peter Lim Eng Hock.
- Vietnam number forecast operation license. Vietnam population is 92.5 million, 3 times of Malaysia population.
- Insider buying at RM 0.50. 
- Deeply undervalued at the current market cap of RM 2.1 billion while investment and asset value more than RM 10 billion.
- Disposal of land and investment asset in paring down debts and churning more cash for the coming mega development.


BJCorp at the range of RM 0.50 to RM 0.55 will be a good price to lock into position. A quick outlook will put BJCorp in testing RM 0.60, while a long term outlook will put BJCorp back to action above RM 1.00.


Lock in or out? You decide
Bone's short term TP : RM 0.60

Cheers and have a nice day

Regards
Bone

Friday, 19 September 2014

Nicorp - Raging Oils

The global market had been in an upbeat mode after the Fed had continued to maintain the near zero interest rate as they plans to end it's third bond buying program in October. Meanwhile, in the European region, ECB, under Mario Draghi, is on it's way to put up with the $ 3 trillion euro (USD 3.9 trillion) stimulus program that is aimed to boost up the European economy. On the local outlook, Bank Negara Malaysia had taken the choice to maintain the OPR at 3.25%, hence shedding out the rumored higher interest rate that will dampen the local economy. With all this in line, the bulls are definitely in the advantage position now.

As we entered into the end of 3rd quarter of 2014, the 4th quarter of 2014 will definitely not miss out the Oil and Gas theme, in which Petronas will be panning out projects from the upstream and downstream activities. To back this up, Prime Minister Datuk Sri Najib had on 25th March 2014 forecast Malaysia's oil and gas sector's upstream to a near USD 60 billion (Approx RM 198 billion) over the next 5 years - source TheMalayMailOnline

While the pie definitely looks good and handsome, quite a number of companies had started to place their position to benefit direct or indirectly from the capex and also from the bullish state in the oil and gas industry. Now, will Nicorp ever comes into the oil and gas picture?

Let's have a quick look at Nicorp.


Nicorp had been consolidating at the range of RM 0.125 for more than 6 months. A quick resistant level will be placed at RM 0.145. With most of the huge volume buying are done above RM 0.125, Nicorp will be looking good to penetrate above RM 0.15 in the coming days after seeing a Private Placement being placed at RM 0.12. The consolidation in Nicorp shares should had reach a level of saturation and will be ready for a good run up in the coming days.


A quick look at some of the trends that had been happening in the KLSE market with company entering into Oil and Gas through acquisition or RTO.

1. Symphony, to be RTO by Ranhill Group.

2. PDZ steered by Pelaburan Mara Berhad (PMB) to turn PDZ into a Oil and Gas player

3. GBH to be RTO by Dynac Sdn Bhd

4. DNEX acquire OGPC and moving to oil and gas

5. PWorth JV with Semaring Enterprise Sdn Bhd

6. APFT venturing to oil and gas to 51% in PT Technic (M) Sdn Bhd


As of lately, Nicorp had underwent a 10% private placement that will be used to put a facelift on their existing Seremban Center Point Mall. The mall will be closed for a refurbishment and will then reopen with a TGV Cinema that will be attracting more crowd. Nicorp had also relocated their office to Bangsar, and had indicated that they will be looking to acquire more business as the logging business in Kelantan had been inconsistent due to landscaping of the forest.

Nicorp had earlier went into a joint venture with Keloil Sdn Bhd to venture into the production and distribution of household and industrial gas cylinders and bottling of LPG. The joint venture is between Keloil PTT LPG Sdn Bhd and Erawan LMW Industries Sdn Bhd, with 2 bottling facilities situated at Bukit Kayu Hitam and Bachok with a capacity to bottle up 6,000 tonnes a month.

With the current board reorganization and the dismissal of Dato Raymond Chan from his position of being the CEO of Nicorp, Nicorp will definitely be ready for a new face to steer the troubled and underperformed company in the coming days. According to sources, Nicorp will be seeing a new CEO that will be coming with a few business injection/acquisition, with a high stake being placed in the upstream oil and gas activities.

While everything is still speculative in nature, Nicorp had underwent some board level reshuffle, and will be looking to see a possible huge turnaround in the coming days. At the level of RM 0.125, with a private placement being priced at RM 0.12 and fully subscribed, the risk and reward in taking position at Nicorp is seemingly cushioned on the stronger opportunities in the coming days ahead. A break above RM 0.15 will be looking to see a better run up in Nicorp.

Nicorp can be a good try based on
- Private placement priced at RM 0.12 fully subscribed
- A board level change, with Dato Raymond Chan relinquish of his post of being the CEO of Nicorp
- Potential for more oil and gas exposure, looking at the current trend
- Acceptable risk with a higher chance of reward at the current level


Bone's short term TP: RM 0.15

Cheers and have a nice day

Regards,
Bone

Thursday, 18 September 2014

GUNUNG - Buses of Hydro Mills

The local market had saw a hot focus from most of the sector with properties, plantation, oil and gas and furniture being the focused theme in the beginning of the year. Following up in the middle of the year, we saw the semi conductor theme play, as well as Sarawak themed following the bullishness of SCORE project. Then came Selangor's water concession theme play which had been in a tough unresolved saga for quite a period of time. In the middle, there are some businessman theme based speculation ranging from Tan Sri Quek Leng Chan, Tan Sri Robert Tan, Tan Sri Vincent Tan. Then came the aluminium theme play, and the latest theme in the market is being the GST that will be implemented next year.

While theme play is important, what could be the next coming up theme in focus?



The latest theme that had been strongly in the play is surprisingly - Buses.

While both KTB and KBES had been rolling higher, one of the better managed chartered bus company that had solid financial fundamentals and comes with solid government contract is Gunung Capital Berhad (GUNUNG - 7676)

Let's have a quick look on Gunung latest price chart.


Gunung had been seen consolidating at the loose range of RM 0.85 to RM 0.90 for a period of 9 months. The 9 months long consolidation had definitely see a level of saturation which will be going to see a fresh set of volume kicking into play. A quick outlook will definitely peg Gunung to a potential run up reaching RM 1.00 in the short term. While RM 1.00 is the main psychological barrier, a convincing break above RM 1.00 coupled with stronger volumes will definitely put Gunung into a good position for a stronger soar.


Gunung - Cashing The Water

GUNUNG CAPITAL BERHAD is primarily involved in land based passenger transportation and specialty vehicle. Gunung Capital had secured long term contracts with the government in providing bus services from the National Services and IIUM as well as some other smaller scale chartering services under their wholly owned subsidiary of Gunung Resources Sdn Bhd and GPB Corporation Sdn Bhd.

The 2Q FYE 2014 had saw Gunung maintaining it's revenue range, however, earning drop slightly which is affected by a higher operating cost. However, moving forward, Gunung is expected to see an overall stronger earnings after securing another 2 new contract from IIUM in 15th May 2014 to provide shuttle bus servicing operating within the Kuantan and Gombak campus which is worth a total RM 4.2 million. Source - Bursa Malaysia

While Gunung's earning is looking to be on a steady outlook with the already ongoing contracts, the new contracts inched will certainly be adding some boost towards it's earnings. A quick estimation will see Gunung being able to deliver an EPS of 13 cents for FYE 2014, which will be translating to a value of RM 1.30 based on a skeptical PER x10 on it's earning.

On it's financial and balance sheet statement, Gunung had been seeing an increase in cash and a gradual decrease in it's debt notes. Currently, Gunung is sitting on RM 24 million cash and in a RM 12 million net cash position, a position that is far better than the other listed bus operator KTB and KBES.


Upcoming Catalyst

Gunung had recently announced it's interest to diversify into a steadier income through by expanding into the renewable energy sector. With this, Gunung had purchased a 85% stake in Pusaka Hijau Sdn Bhd, where Pusaka Hijau Sdn Bhd controls 60% of the stake in PHREC (Perak Hydro Renewable Energy Corporation), while Perak MB's control the other 40%. This will automatically translate to a 51% controlling interest in PHREC, which had the concession license to develop, operate and own small hydroelectric plant in the state of Perak. It is envisage that PHREC will be contributing a total of 292 MW from 31 sites in Perak, in which 6 of them is carrying 116 MW is extended into the list of pre-identified sites in 29th April 2013. Based on a rough estimation of RM 10 million capex for 10 MW, the 292 MW from 31 sites will be looking at a RM 2.92 billion worth of construction project.


The Perak hydro renewable electric project had been in a hot stint lately with more JV in the pipeline for the hot projects. Amongst them had saw Tan Sri Abu Sahid's Maju Holdings already in the game for a RM 600m JV with PHREC to develop a 60 MW  hydroelectric plant. Source - Maju Holdings JV RM600m with PHREC

Then, Globaltec (Glotec - 5220) had also entered into a SSA (Share Sale Agreement) to acquire 49% of interest in Empangan Sejati Sdn Bhd (ESSB), which will comes with a concession for Glotec to build and operate a 15 MW hydroelectric plant in Sungai Perak, Lenggong.


And to put it more spicy, Gunung Capital direct 70% owned subsidiary, Gunung Hydropower Sdn Bhd had also took up 2 sites which comprises of 20 MW with 10 MW in Pulau Tengah, Chenderoh, Sungai Perak and another 10 MW at Pulau Temelong, Sungai Perak. Both of the sites had received duly executed REPPA (Renewable Energy Power Purchase Agreement) from Tenaga Nasional Berhad at 24 cents / kwh.

While the waters are hot, Gunung will further strengthen their financial position with the disposal of EV Bus Sdn Bhd to Best Venture Capital Sdn Bhd for a consideration of RM 9.05 million, further paring down RM 7.89 million of debt and increase their cash by RM 1.16 million.



Gunung Capital will definitely be a good and solid long term investment, and will be a upcoming shining star in year 2015 with their 51% stake in PHREC, literally putting Gunung in control for all the 292 MW hydro electric plant  in Perak, which will be worth billions in value. Gunung will definitely be a superb investment vehicle in the long run based on :
- Solid financial background and fundamental with a net cash position as a chartered bus operator
- Steady revenue stream with an estimation of total earning for FYE 2014 at 13 cents, reflecting a valuation of RM 1.30 based on PER x10.
- Diversification into the Renewable Energy Sector to create steady recurring income from REPPA (Renewable Energy Power Purchase Agreement) from TNB
- Significant 85% stake in Pusaka Hijau Sdn Bhd, which in turn own 60% of PHREC, reflecting GUNUNG Capital Berhad 51% indirect stake in PHREC, which had the 21 years concession for a total of 31 sites comprises of 292 MW, to build, operate and own them.
- Gunung Capital direct 70% and indirect 15.3% (Total 85.3%) owned subsidiary of Gunung Hydropower Sdn Bhd receiving duly executed REPPA of 20 MW from TNB.
- Disposal of EV Bus Sdn Bhd for RM 9.05 million.
- Strong and favorable political ties.
- KLSE current "Bus" Themed play

Gunung Capital will be looking to challenge into a higher ground based on a solid fundamental run up which will be a core factor for a re-rating catalyst. At the current price of RM 0.86, Gunung will be a fresh and interesting target from Private and Institution Funds to lock in to their position. A long term outlook will put Gunung trading at the range of RM 1.50 to RM 2.00

Ready to ride with the hydro plants? You decide.

Bone's short term TP : RM 1.00

Cheers and have a nice day

Regards,
Bone

Monday, 15 September 2014

OPCOM - Cable of Cash

OPCOM Holdings Berhad (OPCOM 0035) had recently underwent an EGM to approve the following
i) The acquisition of 40% equity interest in Unigel (UK) Limited by Opcom Niaga Sdn Bhd.
ii) Bonus issue of 32,250,000 new ordinary shares of RM 0.20 on the basis of 1 bonus share for every 4 existing Opcom shares held.

Opcom had been a pioneer player in the cabling industry since 1994. Till date, Opcom had covered more than 1.6million kilometer of fiber optic throughout Malaysia, spanning from West Malaysia to East Malaysia.

Malaysia is still a country with ample of opportunity in the multimedia and communication sector. With more cheaper and affordable hardware that is high in data consumption, the demand for data had continued to surge exponentially, clogging up the already clogged up data cables.

With this bright prospectus in line, as well as the Prime Minister Datuk Seri Najib Tun Razak reiterating the government's commitment to increase HSBB (High Speed BroadBand) internet coverage to the masses, the HSBB Phase 2 which feature a better and wider internet coverage as well as increasing speeds in major town and cities as well as rural areas is definitely something that will benefit OPCOM well in the coming days.

Let's have a quick outlook in OPCOM shares as of lately.

OPCOM had been seeing some interest in the end of July after seeing more than 1.5millions of share exchange hand. While the share consolidate in the range of RM 0.80, OPCOM had underwent an EGM and approved the 40% equity acquisition from Unigel (UK) Ltd and a bonus issue. Unigel (UK) Ltd is a company that specialized in manufacturing a core component of the fiber optics cable's filling compound - Thixotropic Gel.

OPCOM had been flattish for FYE 2013. However, OPCOM had been seeing a positive growth in the 1Q FYE 2014 which a supply contract secured with TM that is worth RM 20.3 million. While this is just the start, OPCOM will definitely benefit more from the launch of the HSBB Phase 2 later in the 2H of 2014.

OPCOM is a debt free company, and currently sitting in a cash pile of RM 44million, translating to RM 0.3475 cash worth per share (Based on 129 million outstanding shares). Under their belt is a RM 20m worth of office building/warehouse/manufacturing block situated at Shah Alam.


Upcoming Catalyst

According to Malaysian Communication and Multimedia Commission (MCMC), the 1st quarter 2014 broadband penetration rate was 67.3%, which is still below the 75% target set by the MCMC to be attained by year 2015. As such, Budget 2014 allocates an investment of some RM 1.8 billion to expand the HSBB coverage in major towns and another RM 1.6 billion is to be invested to expand suburban area. To further add on, there will be more than 1000 telecommunications towers that is to be built over the next 3 years and RM 850million to be allocated for underwater cabling project to increase the coverage of Sabah and Sarawak.

All these expansion in coverage will be looking no lesser than another 10000 kilometer of Fiber Optics to be manufactured and installed into the ground or going underwater. At the current market ongoing rate for supply and installation of 1 meter of of fiber optics, it will be putting up to a cost at around RM 120 to RM 150. A very skeptical calculation of 10000 kilometer at RM 120,000 per km will be putting up a project value worth RM 1.2 billion.

While the project is a big chunk of pie, Opcom will be facing competitor from Leader Optic Fibre Cable Sdn Bhd, Fujikura Federal Cables Sdn Bhd, Gunung Fiber Optik Sdn Bhd, Photon Technologies (M) Sdn Bhd and Optical Communication Engineering Sdn Bhd. However, Opcom will still be in the advantage position due to their past record and also strong political ties.


I believe Opcom will be a great and interesting company to be invested into based on
- Strong financial background with no debt
- Good cash position amounting to RM 0.3475 cash worth per share
- Good record in the past for delivering projects
- Huge beneficiary from the HSBB Phase 2 worth more than RM 3.4 billion
- Strong and favorable political ties
- Strong business relationship with TM Berhad
- Good dividend paying company
- Bonus issue of 1 bonus share for every 4 shares held

OPCOM will be looking to trend higher in the coming days. A quick outlook will see Opcom putting up a quick challenge towards RM 0.90, while a longer term outlook will see Opcom trading above RM 1.00.

Bone's short term TP: RM 0.90

Cheers and have a nice day.

Regards,
Bone

Wednesday, 10 September 2014

FACBIND - Cash Brew


Global equity market outlook will be likely to see another bullish run after the ECB initiative to cut down interest rate and pump in more liquidity into the market to encourage more business activities as Europe continue their journey of recovery. The European QE will be expecting to benefit the Asian market. Industrial and manufacturing market that caters for export markets will be looking good to see a growing demand.

While the KLSE market had been juggling between 1860, the trend is still focused in small cap, particularly those with solid fundamentals, good financial position and potential growth. One of the selection that might interest you is FACB Industries Incorporated (FACBIND - 2984).

FACBIND had underwent a business restructuring exercise in in 2012, disposing off it's stainless steel pipe division along with the land and buildings for a total cash consideration of RM 131.5 million after the division recorded losses, pulling down the group's net profits. Currently, the group had focus back in 2 division
- Manufacturing and distribution of Mattress and Bedding equipment.
- Stainless steel butt-weld fittings under KT Fittings Sdn Bhd

Let's have a quick look at the recent price chart of FACBIND


FACBIND had been consolidating at the range of RM 1.40 after peaking up at RM 1.65 during the month of May this year. The consolidation is seems to be saturated, hence a fresh set of volume is looking to visit the counter in the coming days as FACBIND looks set to trade into the higher grounds. A quick outlook will put psychological barrier at RM 1.50, and following will be RM 1.65. A break above RM 1.65 will signal FACBIND trading into the uncharted territory, possibly hitting RM 1.80


FACBIND - Going For a New Pie?

After the disposal of the loss making stainless steel pipe division, FACBIND is back to their focus in the manufacturing of mattress and bedding. FACBIND also focused in their highly reputable stainless steel butt-weld fittings as they relocated their operation ground to Port Klang in April 2013 as their supplies are 90% exported to international market. Although FACBIND is recording a lower revenue after the disposal, the group is on their way to mark a turnaround after plagued with a series of red stains previously.


FACBIND had seen an increased of revenue in FYE 2014 compared to FYE 2013 after seeing a stronger sales in their mattress and bedding division. The stainless steel butt-weld fittings is also seeing gradual growth in the international market.

FACBIND is currently sitting in a large pile of cash, totaling more than RM 150 million after the disposal. While NTA stood at RM 2.52 per share, the cash value of 1 share comprises of a stunning RM 1.78 per share with an almost negligible debts in the company. Currently, the share is being traded at the range of RM 1.40, which is a 44% discount from it's NTA and 21% discount from it's RM 1.78 cash worth per share (based on 85,162,500 outstanding shares)


FACBIND is being controlled by a low profile tycoon, Tan Sri Dr Chen Lip Keong. Tan Sri Dr Chen Lip Keong had been the controlling shareholder for Karambunai and Petaling Tin as well. While in the international market, he is well known for it's Nagacorp which is listed in the HKSE, operating a casino resort in Cambodia. Tan Sri Dr Chen Lip Keong started out with property development during the mid-1970s

Back then before FACBIND ventured into the steel manufacturing sector, FACBIND had been involved in the property development. Now that FACBIND had disposed off a large portion of it's steel division, the group is now in a strong financial position to put some new business into the show again, which huge interest showing towards property development - the business where Tan Sri Dr Chen Lip Keong started out with a loud boom.

Speculations had it that Tan Sri Dr Chen Lip Keong will be focusing on the property development in Sabah after seeing the state is good for plantation and tourism activities. Sabah's property might give you an impression of being a lackluster, the latter had not been the same as Sabah's property had been on a hot rise since earlier this year. Currently, Sabah's had the demand for high end property, just that there isn't enough supplies to cater for the demand at the moment.


I believe FACBIND will be a good counter to be invested for in a long run based on
- AT RM 1.40, FACBIND is trading at 44% discount from it's NTA of RM 2.52 per share.
- Strong cash position at RM 1.78 worth per share, 21% discount at RM 1.40.
- Debt free company.
- Streamlined business activities to only positive cash flow business.
- Potential Special Dividend from asset disposal in November 2014.
- FACBIND is ready for new investment with hot rolling wheel showing signs for Properties Development.


Bone's short term TP : RM 1.60

Cheers and have a nice day
Regards,
Bone

Monday, 8 September 2014

EURO - Unleash the Dragon

The global economy is poised to be bullish again after war sentiment had cooled off in the Gaza Strip, as well as the Ukraine Russia agreement into the ceasefire. The economy is further given a boost after ECB had announced a interest rate cut and putting a stimulus package to combat the low inflation in Europe. The news had definitely put the bulls in control again as a new surge of capital is expected to visit the equities market in the coming days after rubbing away negativity around the market.

While the international stage had been very happening as of late, the local market still had it's own excitement to tell. In the 2H of 2014, one of the feature "take over" that is to be focused upon will not be shy of EURO Holdings Berhad.

I had highlighted EURO previously in EURO - On a Dragon Roar. To recap back on Euro, Oxley Star Sdn Bhd, a fully owned subsidiary of Oxley Holdings Limited from Singapore had entered into a JV with Beverly Heights Properties Sdn Bhd, a company which is jointly owned by Dato Sri Choong Yuen Keong @ Tong Yuen Keong and Dato Tong Yuen Mong, to develop 30 acre of freehold land in North East side of Penang which covers 19 acre of Pepper Estate. The development will be a mega multi-billion worth of project that is coveted by foreigners.

Let's have the recent share price outlook for EURO.
Euro had been traded higher for the past month, peaking at 70 cents in the middle of August. However, the share had been consolidating at the range of RM 0.60 as the global equity outlook took a weaker outlook due to the geo-political tension. Euro will be looking set to see another new set of volume in the coming days after the consolidation, and will be testing RM 0.70 for the 2nd time with a larger force this time around. A successful penetration above RM 0.70 will place EURO trading in the uncharted territory, with a tendency to hit RM 1.00 in the coming days.


EURO - On a Take Over Saga ?

EURO had recently announced their 2nd Quarter FYE 2014 result which had saw a good turnaround as furniture company had benefited from the stronger export to the West and a stronger forex gain after US traded stronger against the MYR 6 months back.
Euro 1H FYE 2014 had displayed a stronger quarter with a cumulative of 3.03 cents EPS compared to the previous year, which is running at a loss of 0.81 cents. Their revenue increase by RM 10 million as NTA grow stronger at RM 0.85 a share.


However, things had turned interesting when a take over offer was launched by Dato Sri Choong Yuen Keong @ Tong Yuen Keong and Dato Tong Yuen Mong with a cash offer of RM 0.44 for each shares of EURO.
While offering RM 0.44 when the share is being traded at RM 0.60 cents might be leaving some investor scratching their head and putting a confusion and fear in the public, this offer is definitely a "ridiculous offer" from the duos. With the company's NTA being at RM 0.85, RM 0.44 had been a wicked slash offer from the duos.


Interestingly, let's have a look at the past "take-over" events that is launched by major shareholder that had happened in KLSE.

1.) SunSuria (Previously known as Maica)
Back then, Maica is being offered RM 0.85 a share from the shareholder to take over the company shares that is not owned by him. Subsequently, the share hit a peak of more than RM 1.70, which is more than 100% from the offered price of RM 0.85. Maica was RTO by SunSuria, which is a property developer.



2.) SYF
SYF was offered by Ng Ah Chai to take over the company via offering a cash offer of RM 0.65 per share for shares that is not owned by him. The company shares went on to hit a rampage and shot over RM 1.30 in the next 2 months, which is more than 100% from the cash offer of RM 0.65. SYF then announces it's plan to venture into property development, which is a JV with Luxmark View Sdn Bhd and Sheeco Properties Sdn Bhd to develop 8.1 acre of land in Sungai Long.
 


Euro had continued to saw the the consortium of Dato Sri Choong Yuen Keong @ Tong Yuen Keong and Dato Tong Yuen Mong increasing their stakes via direct business transfer, which had a collective 35.32% under their control now. According to sources, Euro will definitely sees an asset injection, of which the parcel of 30 acre land is the main held by Beverly Heights Properties Sdn Bhd being the prime asset.


I believe Euro will definitely be an interesting company to be looked out for in the 2H of 2014. Based on the past event that occur in Sunsuria (then Maica) and SYF, EURO is on a high chance to repeat what had happened, and probably outshine the 2 of them in terms of percentage of appreciation.

Euro continued to be a good company to be vested into after positive figures from the current business operation, good balance sheet data, NTA of RM 0.85 and RNAV of more than RM 1.00. Based on 100% appreciation from the offered price of RM 0.44, EURO is high on stake to follow the steps, hence will be translating to hitting RM 0.88 in the coming days.

Ready to unleash the dragon? You decide.

Bone's TP: RM 0.88 (Upgraded)


Cheers and have a nice day.

Regards,
Bone