Wednesday, 17 August 2016

Euro - Assembling Up

Euro Holdings Berhad (Euro - 7208) which had caught investor alert during 2014 could be looking into some action soon after it remained on a low profile for more than 10 months after it's bonus issue.

To recap, Euro was primarily dealing with the manufacturing and marketing of furniture and office fittings. However, due to the emergence of new shareholder and director, Dato Sri Choong Yuen Keong, he had bring together with him more than 20 years of property development and construction experience, which is readily to put Euro in becoming a property developer.

While it had been known that Beverly Heights Properties Sdn Bhd is held by Dato Sri Choong Yuen Keong and his brother, Dato Tong Yun Mong, there had been much speculation on the development of the land which will be closely linked with Euro in the future.

With 30 acres of freehold land at the north east side of Penang which include 19 acres from the Pepper Estate, the prime land is overseeing a beautiful sea view from from a high altitude.

Since the prime land is held under Beverly Heights Properties Sdn Bhd, which is not a subsidiary of Euro, we will be looking at what are the possible option of this potential mind blowing project with huge GDV going to benefit Euro in a whole? To give a background, Beverly Heights Properties Sdn Bhd had in 2013 signed a JV with Oxley Holdings Limited (Singapore Developer). The JV will see Oxley holding absolute and exclusive power and right in the development of the land owned by Beverly Heights Properties Sdn Bhd. Oxley will be entitled to 70% while Euro 30%.

According to an experienced analyst who is familiar with such scenario, the highest possible chance for Euro in order to monetize from the development is to see Euro forming a JV with Oxley Star to the development. This will then replicate the form of joint venture structure liken between Ewein, Zenith and BUCG. The trio consist of mixed development project and infrastructural development from underwater sea tunnel to City of Dreams in Penang with different joint venture structure in between the entity. For Euro to be able to ride along the tide of Oxley will be a great opportunity.

However, due to the JV agreement is still being conditional, there are still chances of the agreement being terminated. If this happen, chances of the land being injected into Euro will be very high as Euro can easily raise fund from the public to make acquirement. Should that happen, Euro can either develop it on their own, or JV with local player such as Ecoworld, E&O or SPSetia for the 30 acre of land.

Currently, Euro will focus on it's first maiden foray, a low density development project at Damai Perdana, Cheras. The project named Vista Damai will see 322 units of freehold condominium at 4 acres of land.

Albeit the current weaker sentiment in the property arena, Euro had been lingering at a lowly region of 24 cents for the past 10 months. However, the interesting part of Euro will be it's foreseeable future corporate exercise and potential development.

After reducing it's par value to RM 0.10, it is foreseeable that Euro will be looking to see 1 round of fund raising, either through SIS (share issuance scheme to director) or Private Placement. Take private placement for an example, for a share base of 243 million shares, raising approximately RM 10 million through 10% placement (24.3 million shares) will also interpret to a pricing of RM 0.40 for private placement.

At the current pricing, Euro can be considered attractive. We expect Euro to do a revaluation of it's land and asset in the coming days in order to reflect the true value. Euro would have the potential to revisit back to RM 0.30, considering a considerable accumulation made back in November 2015.

Bone TP : RM 0.30

Tuesday, 9 August 2016

AISB - The Last Of The Mohican

Amalgamated Industrial Steel Berhad (AISB - 2682) is a very low profile steel maker that is based in Shah Alam. Due to the challenging business environment surrounding the steel industry from tight competition to high raw material, AISB had taken several restructuring in manufacturing processes as well as diversification into property development.

Despite being listed for more than 10 years in the KLSE, AISB is not so well known to the world of trader and investor. This is very much due to the inconsistent earning in the steel industry, as well as a tight liquidity of share that is circulating in the market.

However, with most of the steel company starting to make a turnaround from losses to profit, what will this meant for the Shah Alam based AISB ?

AISB to turnaround in 2016

Headed by executive director Mr Ronnie Lim Yew Boon, steps that are taken by AISB is to streamline the steel production from 2 plant into 1 plant. This will enable the group to see a better cost control and overall management of the steel production.

And most importantly, the exercise is to unlock a value of it's 11.5 acre land in Section 15, Shah Alam. The said piece of land is worth RM 61 million just on vacant land alone.

The land is looking to build 12 Semi-D factory and 2 custom made Bungalow Factory. With AISB being one of the arm of Malaysian conglomerate LGB group, their track record, experiences and connection could only boost the confidence in delivering this project. Just recently, Avant Industrial Park had obtain the green light to develop the piece of land.

The other services under the LGB Group is listed entity Taliworks Corporation Berhad. It provides water management, solid and water waste management, highway operation, property development, IT and construction engineering.

Can AISB a repeat of Taliwork ?

Given both of them are under the care of LGB group, what is the potential of AISB in the coming future?
Let's have a look at Taliwork as a reference case.

Given a track of power what LGB can do to Taliworks, AISB could be a good target now

With more than 3 year of inactivity in AISB, the share had finally saw some good participation of volume finally.

Familiar sources are expecting more happening in AISB. After a private placement last year that had completed in May 2015, AISB could be looking to see a potential bonus free warrant in 2017. AISB will also be looking to see better result from their steel operation. After all, most of the company in the steel industry had turned into profit already.

AISB underlying fundamental might not be so attractive at the moment, however, with new focus in unlocking the value of underlying asset could be looking to see more new venture coming in for AISB in the future.

Bone's TP : RM 0.70

Monday, 8 August 2016

How to monetize the boom of Pokemon Go ? Here are 2 opinions from Bonescythe

Pokemon Go had taken the world abuzz with a new gaming style and experience by incorporating the augmented reality into the game play. This game is addictive, and nostalgic for many of the young adult in their late 20s even to early 30s. Well, I had to inform that I am once an avid Pokemon fans too during my childhood.
While the scale of the influence in this game on spurring the economy is still unknown, it forces people to literally get out of their home in order to advance in the game. Player need to head to PokeStop to reload items, walk around to catch wild Pokemon and hatch eggs, go to Pokemon Gym to battle against player. With this being said, it had open up vast opportunity in new business idea that can cater some niche services to this market.

So what are some of the cool business that we might be able to do to monetize this booming moment?

1.) Bicycle Rental Services
If you are doing this business in some recreational area, that will make good sense. If you are doing this in scorching hot city, that will be a joke. However, since there are a huge market of player playing this game, that could put this idea to run again

Walking from Pokestop to Pokestop will definitely be tiring and slow. However, taking a bicycle and ride along will definitely give the game playing feel much more better. After all, Ash Ketchum in the Pokemon series do get his bicycle after some time in the game too.
Some of the cool spot that had a big number of Pokestop will be able to see good demand in bicycle rental service. Places such as KLCC park, Zoo Negara are definitely going to be superb location. To make this user friendly and pick up the demand, bicycle is advisable to be installed with phone and power bank holder. For safety purposes, operator also can provide rental of safety gears for hot places such as SS15 in Subang.

2.) Manufacturing cafe table with USB Charging ports
If you dislike a small scale business like bicycle rental, then this would probably come to your liking to make it a big business. I had to admit that I had this idea for quite sometime in my mind, and had been thinking to pattern and trademark this idea. However, with a pair of hands and legs and limited knowledge in design, I am now sharing this idea out and leave it out to whomever that can see the potential demand of this product and interested in developing it further.

This idea caught me when I frequented cafe and eateries that do provide electric charging port mounted on wall. I believe, many of the port are either too high, or too low, or too far, or spoil. It is basically not practical at all. Imagine most of the USB cable is approx 50 cm long, that will sound quite inconvenient to the user. A table with USB port will make definitely give an good lasting impression to customer, making them likely to come again for whatsoever reason to charge their dying phone. For those cafe that are near to Pokestop, that will be brilliant for customer to sit around, put in a "Lure Module" and activate "Incense", enjoying sip of coffee and catching some Pokemon with friends with their phone powered on the table with ease. Don't you think this is amazing?

Since there is no such product in the whole global market (as of my own current knowledge now), the potential is definitely very huge. If a local furniture listed manufacturer is willing to take up this idea, you can thank me by telling me to invest in your company. Well, on the other hand, if want more creative idea, I do still have some more, and don't mind working it out with serious manufacturer.

Well, above are just my opinion that I think is practical. For a normal layman, bicycle rental services is quite easy to manage. But for big businessman with manufacturing capabilities, why not try something new to test the market out? After all, I am quite convinced that cafes are willing to buy this table and try.

Cheers and have a nice week ahead.