Tuesday, 14 October 2014

Mieco - Riding on Typhoon

The latest world calamities definitely had Typhoon Phanfone and Typhoon VongFong on the headlines, especially when Typhoon VongFong had been categorized as a super typhoon, reaching a breaking speed that is greater than 257 kph (160mph), putting it as the greatest and strongest typhoon on earth for 2014's record.

Japan had been a country that is plagued with typhoons, however, typhoon that is of this quarter of the year had been seemingly more destructive and more dangerous than the previous typhoons that Japan had encountered this year. With Typhoon Phanfone just sweep through Japan, Typhoon VongFong had made is debut in Okinawa, and will be looking to visit Tokyo in Tuesday.


While the gloves sector had been seeing as a beneficial sector due to the ebola widespread, with Japan stricken with a couple of destructive typhoons, it will never be too late to look into the timber chipboard that will be an imminent ingredient in the reconstruction of the typhoon stricken area.

Topping the chipboard manufacturer will be Mieco Chipboard Berhad (Mieco - 5001)
Mieco had been trading at the range of RM 0.45 before seeing a strong breakout, leading the stock to hit a high of RM 0.60 in the middle of September 2014. Mieco had been seen as well supported with convincing volume being transacted at the range of RM 0.45 to RM 0.60 with the outlined vertical lines in red. While the recent correction had send Mieco lower towards the range of RM 0.45, Mieco should be able to see a strong rebound in the coming days at the back of an increasing order and turnaround year which is backed by the rebuilding and reconstruction of Japan.


Mieco - Roaring with Typhoon

Mieco, incorporated 41 years back then, had been envisioned to see it as a world leader in the manufacturing of particleboards with a special emphasis in high quality and value added wood based products. Till date, Mieco had one of the single largest particleboards line in the Asia Pacific region, located at Kechau Tul which had started operations in 2005. The plant had attained the MS ISO 9001:2008 Quality Management System and had it's product marketed to more than 20 different countries around the world.

On 2009, Mieco put another breakthrough after it's product had been certified the Japanese Industrial Standards, JIS 5908 on April 2009, putting a strong confidence on the quality and reliability of products. Then Mieco went further to be certified with California Air Resource Board (CARB) Phase II in January 2011, demonstrating the compliance of Mieco's composite wood products with California Code of Regulations for the US Market.


As of the 2Q of 2014, Mieco's revenue shot up to RM 88million, which is a RM12 million increase from the previous corresponding quarter. Mieco had netted an EPS of 1.44 cents, and will be looking to return into the black for FYE 2014 soon. With Mieco trading at a 62% discount from it's NTA of RM 1.21, Mieco definitely had a great prospects for a row of capital growth.


Mieco's fortune came when weather forecast analysis had predicted on a destructive typhoon that could be visiting Japan after a deadly Typhoon Haiyan that had stormed parts of Philippines into a wreck. The forecast had sparked the higher orders of chipboard that will be needed in the wake of the reconstruction after the aftermath.

While Typhoon Phanfone had done it's damage, another follow up by Typhoon VongFong had definitely added salt into the wounds as more than 200,000 citizen staying at Okinawa island had been ordered to evacuate their houses as the huge storm rip the roofs and walls of the houses. Although the storm had seen a reduce in speed, it is still destructive enough to uproot trees and put more than 60,000 homes without power supply.




A space view on the Typhoon VongFong heading towards Tokyo which will be landing on Tuesday.



I believe that Mieco will be an interesting counter to be look at currently before the mass media starts to unveil the damage that had brought to Japan from Typhoon Phanfone and Typhoon VongFong. Japan is prepared and ready to rebuild their cities after the aftermath from the typhoons.

Mieco will be of a good outlook with the following pointers
- Strong beneficiaries of the reconstruction of typhoon stricken cities and town.
- Certified industrial products by Japanese Industrial Standard - JIS 5908.
- Stronger revenue on 2Q 2014 with higher book orders, Mieco looking to turn into the black for FYE 2014.
- Trading at 62% discount from NTA of RM 1.21.

Mieco will be looking to see a quick challenge at RM 0.50, and a short term price will see Mieco looking at RM 0.55 to RM 0.60. Should Mieco being able to maintain and continue to grow it's sales, Mieco will be looking to settle at the range of RM 0.80 in a longer term outlook.

Join the typhoon? You decide.
Bone's short term TP: RM 0.55

Cheers and have a nice day

Regards,
Bone

Tuesday, 7 October 2014

Euro - Time's Up

The latest development that had been happening in Euro Holdings Berhad should by now resembled a known and informed issue by a group of traders and investor in the KLSE market.

Let's have a quick outlook at the latest price chart of Euro.
Euro had been consolidating in a healthy manner after the spike up in the middle of July 2014. While the highest transacted price is RM 0.70, Euro's consolidation for the past 3 months had been in a convincing manner after seeing a lower volume consolidation, signalling a sign of saturation. Euro will be looking to challenge further above RM 0.70 with a series of corporate exercise that will be coming in with possibilities of private placement, bonus issues and asset injection that is worth more than RM 1billion in the coming days.


Euro - Playing On Tight Cards

The latest corporate event is on the RM 0.44 take over offer that is offered by the consortium of Dato Sri Choong Yuen Keong @ Tong Yuen Keong, Dato Tong Yun Mong and new emerging shareholder Tee Wee Sien. Let's look at a few important highlights that the public should be aware of in the take over offer circular.

Little known Tee Wee Sien had been involving in property development in 2009 after joining up with his best friend and partner, Mr Eric Low See Ching (current deputy CEO of Oxley) to team up with Mr Ching Chiat Kwong in Oxley. Mr Tee Wee Sien had been snapping up Oxley shares in the SGX market lately, upping his stake to 12.05%, a 0.02% up from his previous substantial stake of 12.03% as recorded in Oxley's 2013 Annual Report

With this in line, what could be possibly brewing in Euro in the coming days?

An extract from the circular had highlighted the future plans and direction of Euro, which is to focus on growing its property development business. This will ultimately place Euro as an upcoming property developer from it's current position as a furniture maker.

While Euro is on the verge of becoming a property player, the consortium of Dato Sri Choong Yuen Keong, Dato Tong Yun Mong and Tee Wee Sien may rationalize and/or restructure Euro towards the readiness of becoming a property player.

Currently Euro with only 81million shares and at the price of RM 0.66, Euro total market capitalization is just a mere RM 52.65 million, which will be paving way for a series of corporate exercise which will be seeing a high possibilities of Capital Reduction, Private Placement and Bonus Issue to enhance the liquidity of the share.

To recap back, Beverly Heights Properties Sdn Bhd had acquired 30 acres of freehold land in the northeast side of the Penang Island, which includes 19 acres of the Pepper Estate land. The current land value at Tanjung Bungah and Tanjung Tokong had been earmarked at a range of RM 500 to RM 1000 per square feet after the reclamation work that is done in the STP 1 which had shot up the land prices at that area. Based on the strategic location of the 30 acres of freehold land in a prime area of Penang Island, a skeptical estimation of RM 800 per square feet will be reflecting a booming value of more than RM 1billion in asset.


With all the solid happening in Euro, from shareholder buying huge stakes, and an official circular, notifying the new direction of Euro in the property market, and the emergence of Oxley substantial stakeholder Mr Tee Wee Sien as the director of Euro had everything to point at Euro to see the prized asset injection into it's portfolio.

To add on to it, Euro had been really lacking in showing it's true value on it's already owned assets and properties spanning a list of Freehold land in some strategic areas of which some had not been revalued since 1997.

Independent advice circular from DWA Advisory Sdn Bhd had also outlined the undervaluation of Euro existing assets and properties in reflection of the take over of RM 0.44 cash offer from the consortium, and had then advice the general public to reject the offer of RM 0.44 that had been made.

According to DWA Advisory Sdn Bhd, the RNAV of Euro is RM 1.03 per share. Source - Bursa Malaysia


Conclusion

To conclude, shareholder should not only reject the offer, however, at the current price which is below RM 0.70, Euro will be good for existing shareholders to increase their holdings, and also to public to lock a position in Euro as Euro will be the next prominent property player in the Penang Island after E&O, with more than RM 10 billion worth of GDV to be launched in the prime area. To put it right, Euro will be a possible replicate of Ecoworld in the coming days. With Euro currently below RM 0.70, it had nothing much to lose based on it's existing business, assets and properties, however, everything to win because of the future exploding potential in the upcoming development.



In short, Euro will be looking to trend higher in the coming day as time is running out. A short term outlook will place Euro trading above RM 0.70, while a longer term outlook will see Euro trading above RM 1.00.

Reference
Euro - On a Dragon Roar
Euro - Unleash the Dragon


Bone's short term TP : RM 0.88 (Maintain)

Cheers and have a nice day

Regards,
Bone

Friday, 3 October 2014

Supermax - On Hot Shots

The global equity market had been shedding off trillion in value after seeing a strong note of profit taking and selling down which had took the market into a correction. Many are still puzzle on whether this is a correction on the existing bull run, or the start of the economy slow down effect in the equity market. To put more confusion into the decision making of the investor and trader, ECB had announced it's decision to keep the interest rate at 0.05% and outlined an asset buying program that is to be started this month. While Ukraine and Russia had negotiated a truce, the latest shelling near the Donetsk's Airport had put the truce on the thin line again. And October will be a month where the US bond buying program will see a stop, raising speculation of a earlier than expected interest rate hikes which had sparked a strong buy back on the USD as US Funds are selling their foreign holdings and cling on to the USD.

While all these had been happening, the seemingly yet to be controlled Ebola Virus had reportedly spread it's wing into the US after Texas confirmed on it's first case of Ebola Virus infection on Thomas Eric Duncan. Currently, more than 80 people that had been in contact with the patient is under monitoring from the state. The deadly virus had infected more than 7,200 people in Africa and had then taken more than 3,300 lives.


With all this global event (Stronger USD and Ebola Virus Pandemic) that is happening, Supermax would somehow looking to call the shots as both event had inevitably benefit the glove sector.

Let's have a quick look at Supermax latest price chart.


Supermax had reached quite a bottoming level after sliding down from a peak of RM 3.00. However, Supermax will be looking to challenge higher after consolidating at the range of RM 2.25 for 2 months with double fuel boost from stronger USD and Ebola Virus Pandemic to charge Supermax into higher ground in the coming days.


Supermax - All The Reason For An Uppercut

Supermax had a very funny character with the KLCI - Inverse Relationship. Let's have a quick look on Supermax and the performance of KLCI from December 2013 to the current level.

From the past, Supermax had successfully displayed a relatively strong inverse relation towards the movement of the KLCI. With the current global market development, the KLCI will be looking to inch lower, possibly towards the support range of 1800 in the coming days due to :

1.) Stronger USD against the MYR.
2.) Ongoing Ebola Virus infection with no proven and guaranteed vaccination at the moment.


The USD will be looking to get stronger in the coming days due to the anticipation of a earlier than estimated interest rate revision from the Feds after the last tranche of bond buying program ends in October this month. The steep and strong pick up of the USD against the MYR will be looking to hit MYR 3.40 against USD 1 in the coming days.

Supermax which trades gloves in USD will see a boost on top of another boost after expecting a rising demand in gloves from the US and European Country amidst the Ebola Virus infection while riding on a stronger USD with will translate to a greater gain in forex.


Supermax will be even more interesting after being looked as the only laggard in the gloves industry that had saw it's competitor charging up.

1. Hartalega Holdings Berhad - 5168

2. Kossan Rubber Industries Berhad - 7153

3. Top Glove Corporation Berhad

4. Careplus Group Berhad


In a conclusion, Supermax is just another big bomb that will explode upwards in the market of red sea. Supermax will be a good counter to be traded / invested based on :
- Stronger USD outlook against the MYR, with a projection of reaching RM 3.40 for USD 1.
- BNM had just recently announced the unchanged OPR at 3.25%, pegging the nation interest rate for at least another quarter to half year period, hence putting away speculation of a sudden increase in OPR to counter the currency outflow.
- Rising global concern on Ebola Virus infection, with 1st US patient confirmed in Texas.
- Supermax being a laggard compared to all it's peers which had responded towards both the events
- Supermax to see factory expansion producing more output in FYE 2014.


A quick outlook will see Supermax challenging RM 2.50 based on approximately 10% capital appreciation from the current level of RM 2.24. Supermax will definitely be the next big thing in KLSE with all the factors lining up for a great run upwards.

Punching in? You decide.
Bone's short term TP: RM 2.50

Cheers and have a nice day

Regards,
Bone

Thursday, 2 October 2014

October Highlight - Bornoil - Gold Blast

Borneo Oil Berhad (Bornoil - 7036) was used to be known as Sugar Bun Corporation Berhad back then before 2007. However, due to the company new direction in it's involvement in the downstream oil and gas, renewable energy and mining, Sugar Bun Corporation Berhad had since then changed to Borneo Oil Berhad to reflect the diversified business in the group. Currently under Bornoil's active business portfolio includes
- Gold Mining Division
- Fast Food Franchise Division (Sugar Bun)
- Oil and Gas Division
- Property & Management Division


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

BornOil had been consolidating at the range of RM 0.65 for a period of 9 months. The consolidation had saw a series of saturation and will be looking to see a new burst of volume visiting Bornoil after a corporate exercise which had saw a PAR value reduction of RM 0.90 from RM 1.00 which is effective on 25th September 2014. Bornoil will be looking to trend higher in the coming days ahead, and will be on a positive mark in breaking RM 0.70 convincingly.


While the mother share had been looking promising, BornOil-WB will be an even attractive target after being traded with a 6.8% discount from the mother share, as exercise price is being revised to RM 0.10, putting BornOil-WB into a huge discount. At the current closing price of BornOil at RM 0.66 as of 1st October 2014, BornOil-WB should be trading at RM 0.56 after exercise price had been revised to RM 0.10. To put it more interesting, the expiry of the warrant is slated at 28th February 2018, putting it more attractive to be trading at a premium instead of a discount.


BornOil - Gold Rush

BornOil had finally found it's way to a golden land after securing a gold mining contract from Champmark Sdn Bhd for gold prospecting and mining on a 400 acre area for 5 years and renewable option of another 5 years in Merapoh, Mukim Batu Yon in Lipis, Pahang. To recap back, MMC Corp Berhad had leased the mining land from Perbadanan Kemajuan Negeri Pahang which in turn contracted it to Champmark Sdn Bhd for mineral prospecting and mining.

In June 2014, BornOil had successfully recovered 43.5 kg of gold (current market worth RM 5.655 million) after processing 187,255 tons of alluvial which contain gold dust and fragments. Back then at 2012, Minarco Mine Consult had a site study and estimated around 4.02 tons of gold in the alluvial. However, a further study conducted by Professor Li Sezhuan of Champmark Sdn Bhd had indicated that the site might contain an estimated 30 tons of both indicated and inferred gold reserve (Worth RM 3.9 billion at RM 130,000 per kg) - Source (The Star - BornOil look for Gold in Pahang)

Currently, BornOil is operating in area 4-1, whilst another 6 more gold mining sites will be operation in the coming days once the green light is given by the authorities.

Whilst the Gold Rush had been the most interesting and exciting development in BornOil, it's longest operation asset - Sugar Bun, will be looking for a greater expansion in the Johor, Sabah and Indonesia. BornOil appointed franchisor SB Franchise Management Sdn Bhd had awarded an exclusivity to Indonesian firm PT Mitra Adidaya Perkasa to operate Sugar Bun restaurant in Jakarta, Medan and West Kalimantan which will see 20 new outlets to be set up by 2018. The first outlet will be phased in Ayani Megamall, the biggest shopping mall in Pontianak, West Kalimantan.


To further spice up the whole prospect in BornOil, the involvement in downstream Oil and Gas which focuses in bio diesel storage tank facilities had also kick out with a contract secured from Shell Timur Sdn Bhd for the engineering, procurement, construction and commissioning of 2 palm oil methyl ethylene bio diesel storage tank facilities in Kuala Baram, Miri and Labuan. With the government initiative to support a bio diesel roll out plan in the whole Malaysia in 2015, BornOil will be seeing more contracts in this division in the coming days ahead.


Current Catalyst

To fully kick start all the planning and to put them into work, BornOil estimated a need to raise a total of RM 35.5 million through a 20% private placement earlier in July 2014. The RM 35.5 million raised will see an allocation of RM 10million for new mining plant and equipment, RM 5million for gold exploration activities, RM 5million for new fast food central processing plant, RM 4.63million being PAR value of RM 0.10 for 46,248,000 new shares from private placement, while the rest will be used for repayment of hire purchase and expenses related to corporate exercise.

To raise RM 35.5 million from a 20% private placement, or 46,248,000 shares, the price for the private placement must be above RM 0.7675 in order to reflect the proceed.

Calculation
RM 35,500,000 / 46,248,920 shares = RM 0.7675 / share

However, while the private placement had been fixed at RM 0.56 per share in 25th September 2014, raising approximately RM  26 million, BornOil current ongoing gold recovery in Merapoh will had saw a further convincing result that will be looking to spiral the company further.

BornOil will be looking to recover at least 250 kg of gold in the end of 2014 in the current operation. which will be worth RM 32.5 million.



I believe BornOil will be an interesting counter to be looked upon in the coming days. With the huge potential into tapping a huge reserve of gold amounting to 30 tons which is worth RM 3.9 billion, a skeptical 50% slash cut will still put the figure at RM 1.95 billion worth of gold to be recovered. Currently trading at a 30% discount from it's NTA at RM 0.95, BornOil will be a shining leopard in the coming days.

In summary, Bornoil will be good for a long term outlook based on
- Potential tapping into 30 ton of gold reserve worth RM 3.9 billion
- Fast food arm - Sugar Bun, expansion into higher populated area such as Indonesia
- Involved in the downstream sector of the Oil and Gas, focusing in Bio Diesel tank storage which will see great prospect in 2015 once government open up whole Malaysia for Bio Diesel program
- Already secured several contracts from Shell for the engineering, procurement, operation and commissioning of the Bio Diesel storage tank in Kuala Baram, Miri and Labuan.
- Trading at 30% discount from NTA of RM 0.95


Place in your cards? You decide.
Bone's short term TP : RM 0.75

Reference
- The Star
- The Borneo Post
- The Edge Malaysia

Cheers and have a nice day

Regards,
Bone

Tuesday, 30 September 2014

Gpacket - A New Chapter with TM

The Green Packet saga that had been a hot hit last year with a stint on a the verge of being sold to Digi had abruptly ended with a pact with the local fixed line internet provide - TM. Speculation had been hot and furious back then with the heavily indebted Green Packet clinging with a small glimpse of hope in their money burning core asset - P1. Back then, Green Packet had invested more than RM 1 billion in P1 infrastructure and site, however, the investment had not been able to see a strong flow of income with tons of infrastructural upgrades which had continue to burn a deeper hole into Green Packet pocket.

With the latest strategic partner TM on board, what could be the next course of direction for Green Packet?

Let's have a quick look at Green Packet latest chart outlook
Green Packet had been trading at the range of RM 0.35 for the past 5 months. Green Packet dipped further after an outlook of a possible entry of PN17 status, however to see a strong rebound which had been supported by shareholder buy back from Tan Sri Ong Leong Huat vehicle OSKVI and Tan Sri Dato Kok Onn open market purchases. Green Packet is looking to see a good reversal in the coming days, which will be suggestion a stronger pick up in the participation of volume as Gpacket looks to challenge a quick resistant line at RM 0.50



Green Packet - Riding on TM

Recently, it had been the government effort to see a higher penetration rate of high speed internet coverage in the whole Malaysia. The MCMC had set a 75% of penetration rate in the internet coverage by 2015, which is still seeing a gap to be closed up after 1st quarter 2014 reported a penetration rate of 67.3%. The Budget 2014 had also highlighted the launch of HSBB phase 2, a total capex of RM 3.4 billion which will be broken down into RM 1.8 billion for the expansion of HSBB coverage in major town and cities and RM 1.6 billion for the suburb area. (The Star - Budget 2014, HSBB Phase 2 to take off)


With TM holding the sole concessionary towards the development of HSBB in Malaysia, the acquirement of stake in P1 under the arm of TM will be a good a strong indicator for Green Packet to see a life in the coming days ahead.

Based on the research did, penetrating into the rural areas with through land line cable might be difficult and also not cost friendly. The investment might not be able to see a visible return in should TM be laying ground lines to penetrate into rural areas. However, turning around the table towards and shifting into wireless HSBB coverage might be a good solution now.

While TM had been lacking of higher frequency spectrum that can carries more data, TM definitely need to get hold of a higher frequency spectrum in order to see the services being labeled as HSBB. With this in line, Green Packet's P1, carrying 30 MHz of 2300 spectrum and 20 MHz of 2600 spectrum, had come as a good solution for TM as the duo joint together to compliment each other.


Based on the outlook, the framework to penetrate into the rural areas will be seeing TM expanding fiber optic coverage and building more than 1,000 telecommunication transmission tower for wireless transmission, and P1 to disseminate the data using the 4G LTE data spectrum. (Sinchew). ZTE and OCK will be the prime consultant and contractor for the building and construction of the telecommunication tower.



With this in line, this will bring TM back into the wireless game to compete against Telco which had been providing services in this lucrative market. With the world moving around, wireless market will be the next "huge data consuming market" in the coming days. TM will be hitting the road soon with the recent completion of acquirement in P1 and Green Packet restructuring deal which is to be finalized this week (3rd Quarter of 2014). TM will leverage on the all ready sites from Green Packet to roll out TMgo (Broadband-to-go). According to sources, the sites that had previously installed by Green Packet under P1 can be switched into 4G ready in a couple of hours, putting TM on a strong front for an official launch of TMgo to hit the major towns and cities in Klang Valley. (Source - The Malay Mail)


Gpacket will be an interesting stock to be look out in the coming days. While the financial data of the company had been weak, the entrance of strategic partner - TM, will be going to do huge magic for Gpacket in the coming days ahead. Gpacket will be an interesting stock to be traded / invested based on:
- The finalization of deal and work out structure with strategic partner - TM
- Exposure in the HSBB Phase 2 which is worth RM 3.4 billion
- Convincing buy backs from substantial shareholder - OSKVI and Tan Sri Dato Kok Onn
- TM soft launch wireless service - TMgo in rural area


I believe Gpacket will be able to challenge higher in the coming days, with a short term outlook at RM 0.50. Should the joint roll out effort of TM-P1 to be strong, Gpacket will be definitely going to see a better change in the future.

Begin a new chapter with Gpacket? You decide.
Bone's short term TP : RM 0.50

Cheers and have a nice day

Regards,
Bone

Monday, 29 September 2014

ANCOM - Red Hot Berry

The US equity market had saw a good rebound last Friday after DJIA regained pace, putting up at 17113.15 (+167.35) with Nike leading the charge forward after seeing Apple sliding off more than 3% in the previous day after the viral bend test on the latest iPhone 6 and 6 Plus went cracking in social media.

Media, be it from social media, news media or any kind of media is very influential in the current internet era. News can be spread around the world in just seconds from a click - and that is the power of the internet media.

While the international media is always hot with news from all over the nations, our local media had been in a hot scene as of lately. Little known Ancom Berhad had been actually the holding company for Redberry Sdn Bhd, which had been involved in online and offline news and media.

Ancom Berhad is a diversified company that had been involved in
- Agricultural and Industrial Chemical manufacturing and sales
- Polymer manufacturing and marketing
- Logistic solution for chemical transportation, container, bulk cargo handling and warehousing
- Media marketing and advertising

Let's have a quick look at Ancom latest price chart
Ancom Berhad had been trading at the range of RM 0.55 to RM 0.70 for the past 6 months. Ancom had been seeing open market purchases from Managing Director Dato Dr Siew Ka Wei and stakeholder Chan Thye Seng under his listed vehicle P&O Berhad. At the current level, Ancom will deemed to have been well consolidated and a fresh surge of volume will be bringing Ancom higher in the coming days.


ANCOM - The Next Big Media House

The media and advertising industry is a multi billion ringgit industry in Malaysia. The industry will only continue to grow bigger to reach out to more people with the leverage of internet and social media. With this huge prospect, ANCOM had got to it's feet for a piece from the big pie.

ANCOM had been operating their media unit under Redberry. The list of services that is offered under Redberry includes:
- Bernama TV - A 24 hours local and international news in four languages covering current issues and trends
- The Malay Mail - The oldest English paper since 1896
- The Malaysian Reserve - Addressing 10,000 business decision everyday, covering business news, corporate news, stock news, current issues and policy decisions that will impact business directions
- Redberry Airport - Exclusive media concessionaire at the KLIA, KLIA 2 and Senai International Airport
- Redberry Ambient - Captivating audience through digital screens
- Redberry Contact Center - Third party outsource call center
- Redberry Digital - Online & Mobile marketing
- Redberry Event - Event organizer for international and local motor sports event
- Redberry Outdoor - Outdoor advertising in highways (DUKE, SILK, BesRaya, NPE, Smart) and Rapid KL Bus fleet
- Redberry Retail - Through MagiqADS, providing retail media solutions like billboards, banners, floor media, trolley, shelf ads and sponsorship to giant like AEON, AEON Big, Tesco

It had never been easy for ANCOM, especially with the high operation expenses in the media house.
ANCOM had been seeing a challenging year for FYE 2014, with the implementation of minimum wage, higher electricity tariffs and stiffer challenging environment. While ANCOM had recorded a lower revenue for FYE 2014, it had drastically reduce the operation cost which had turn the company into profit with an EPS of 4.3 cents. The current share price is trading at 55.8% discount based on NTA of RM 1.29.


Latest Event
ANCOM had restructured the Redberry with 2 significant changes revolving around The Malay Mail and The Malaysian Reserved.

To recap back, local billionaire Tan Sri Syed Mokthar had been vying for a media publishing unit for quite sometime, however, been rejected by the Home Minister. This had came in a good timing for ANCOM's cash bleeding "The Malaysian Reserve" which focuses in daily financial news. Tan Sri Syed Mokthar is believe to had lock in a deal for "The Malaysian Reserve", with a possible absolute buy over of "The Malaysian Reserve", or through buying a stake in Ancom Berhad.

While doing so, Redberry will put in full focus in "The Malay Mail". The latest corporate hiring which includes Datuk Wong Sai Wan, managing director of The Star, resigned and join Redberry as Director of Special Projects. His moves had came along with the joining of Leslie Lau and Joan Lau, both senior editor in The Malaysian Insiders along with a team of 30 people. Another senior newsman, Datuk Syed Nadzri Syed Harun had also joined Redberry from The News Straits Times Press.

Earlier this year, The Malay Mail had went ahead to launch a package deal with Huawei and Samsung with other 3 papers, forming a Media Alliance and bringing out the digital revolution in the newspaper industry. (Source - The Malay Mail)

While speculation had been very hot on what could be the deal like for Tan Sri Syed Mokthar with Ancom, it had been closely speculated that ANCOMLB (Ancom Logistic Berhad - 0048) might be one of the vehicle that is used for the entry of Tan Sri Syed Mokthar via a private placement that is going to come soon after a a series of assets sales, capital reduction and capital repayment exercise that had went through in Ancomlb. Rumor had it said that Redberry might be injected into Ancomlb with huge bankrolling from billionaire Syed Mokthar to power the media house and unseat The Star in the coming days.

The Malay Mail is going in the right direction by bringing the newspaper into hand held gadgets. Ancom will be going to see it's fruits of investment in bringing in and assembling a team of high powered and experience group.

Meanwhile, Tan Sri Clement Hii had also been joining in the media run with his latest HCK Media which publishes The Ant Daily. Rising up also had The Sun which is under BJMedia will also be on it's way to capture a bigger pie. By looking at the charts, It can be viewed as small-medium size media firm are ready to unseat The Star.


1. Ancom - Redberry

2. HCK Capital - The Ant Daily

3. BJMedia - The Sun

4. Star - The Star




I believe Ancom will be a good company to be invested into based on :
- Restructuring Redberry with new experience management and strong team with prime focus in The Malay Mail, focusing on e-paper subscription.
- Trading at 55.8% discount from NTA of RM 1.29.
- Investment stakes in Ancomlb (47.07%) and Nylex (45.61%) is worth a combined RM 85.68 million (If calculate Nylex based on NTA of RM 1.50 which is worth RM 132.95 million, translating to a combined value of RM 161.91 million). Ancom Berhad current market capitalization is RM 122.615 million.
- Sale of The Malaysian Reserve to billionaire Tan Sri Syed Mokthar at undisclosed price, rumored to be hitting more than RM 50million, which includes licensing.

Ancom will be looking to trend higher in the coming days. A break above RM 0.60 will put Ancom into challenging psychological mark of RM 0.70. Long term outlook will put Ancom trading at RM 0.80 to RM 1.00.


Bone's short term TP : RM 0.70


Reference:
Kinibiz - Syed Mokthar buys Malaysian Reserve
The Edge Malaysia


Cheers and have a nice day

Regards,
Bone