Highlights
KLSE: WCEHB (3565)       WCE HOLDINGS BHD MAIN : Construction
Last Price Today's Change   Day's Range   Trading Volume
1.01   +0.01 (1.00%)  1.00 - 1.02  73,600
Analyze this stock with MQ Trader system

Overview

Market Cap: 1,013 Million
NOSH: 1,003 Million
Avg Volume (4 weeks):625,010
4 Weeks Range:0.88 - 1.13
4 Weeks Price Volatility (%):
52.00%
52 Weeks Range:0.88 - 1.68
52 Weeks Price Volatility (%):
16.25%
Average Price Target: 1.16
Price Target Upside/Downside: +0.15
Stamp duty exempted for year 2018

Financial Highlight

Latest Quarter | Ann. Date 31-Dec-2017 [#3]  |  22-Feb-2018
Next QR | Est. Ann. Date: 31-Mar-2018  |  23-May-2018
T4Q P/E | EY: 26.62  |  3.76%
T4Q DY | Payout %: 0.00%  |  - %
T4Q NAPS | P/NAPS: 0.7096  |  1.42
T4Q NP Margin | ROE: 4.56%  |  5.35%

Headlines

Date Subject
29-Mar-2018 下跌股:WCE控股80仙支撑
27-Mar-2018 PublicInvest Research Headlines - 27 Mar 2018
11-Mar-2018 (CHOIVO CAPITAL) A brief analysis and valuation of WCE Holdings Berhad (WCEHB).
12-Jan-2018 Technical Buy: WCEHB (3565)
28-Dec-2017 Daily Market Update - 28 Dec 2017 (EFFICIEN, WCEHB)
31-Jul-2017 WCE's new equity raising - felicity
24-Jul-2017 Daily Market Update - 24 Jul 2017 (KSL, WCEHB)
24-Jul-2017 M+ Online Technical Focus - 24 Jul 2017
09-Jun-2017 Traders' Corner - WCE Holdings (WCE MK)
27-May-2017 (WCE Holdings) Should Be In Our 2018 Portfolio
20-Apr-2017 DO NOT SELL WCE, Airasia and Ekovest - felicity

Business Background

WCE Holdings Bhd along with its subsidiaries is involved in investment holding. The company has toll concession, construction and others segments. Toll concession segment covers construction, management and tolling of highway operation. Construction segment comprises construction contracting and others segment includes leasing, management services and investment holding. The company mainly operates in Malaysia. Majority of its revenues come from toll concession segment.
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  5 people like this.
 
Jon Choivo Market reaction is negative, because nobody likes cash calls, unless you have a proven track record at making alot of money. Like aeoncr.

WCEBHD, does not have that, at least explicitly. I think it does. So ill wait.
27/03/2018 15:49
Mar Yung Chern drop 12.5%,over reaction..
27/03/2018 16:04
sheep not over react. they got stuck with big number of shares and now got worried as they need to dump much much more money into it. no guarantee that the future is bright...

cash is king
27/03/2018 16:11
sheep after ex date, price will average down
27/03/2018 16:41
newbie911 Jon choivo, ur portfolio very heavy with wce, will u suggest to buy on weakness?
27/03/2018 19:00
traderman lol. is not over react. is smart people throw to pretend smart one
27/03/2018 19:32
PotentialGhost Najix umnx need money to election , they black money private fund sell out in stock market just wan money to election,will continue to drop
27/03/2018 20:16
sell Toll still no income so RI easiest way out to ask for money?
27/03/2018 20:32
Jon Choivo WCEHB is only 3% in my current portfolio. Its very heavy on RCECAP and Timecom ahah.

I'm not a fan of this structure. Assuming all the warrants and RCULS is to be converted, which it will considering the timeline, the price and the prospects of the company. You are looking at a 111% dilution.

Using my most conservative estimate. And assuming all RCUL and Warrant conversion done at RM0.84 and RM1.04.

Intrinsic value of RM2.35 per share, turns into RM1.58, fully diluted.

Previously, lets say you hold 1,800 shares. At a cost of say 1.11 each. You paid RM2,000 for what is worth intrinsically, RM4,230. Margin of safety of 53%.

Lets say you fully subscribe to the cash call, convert RCUL and Warrants.

You now hold 1,800 shares, 1500 RCUL and 500 Warrants.
Your cost is now,

RM2000 for the shares
RM750 (0.5*1500) for the RCUL and Warrants
RM510 (1500*0.34) for the conversion of RCUL
RM520 (500*1.04)for the conversion of Warrants.

You paid RM3,780 for what is potentially worth RM6,042 (3,800 shares X RM1.59). Margin of safety of 38.5%. Much less lucrative imho.

But lets say, you manage to buy up more of the warrants and RCULS during the issue. Could be worth quite a bit.

The 5 year tenure of the RCUL and 10 year tenure for the warrants is insane.

Id much much rather, they just do a bog standard RI share placement. Or, sell the rimbayu and make this a pure highway co.





Posted by newbie911 > Mar 27, 2018 07:00 PM | Report Abuse

Jon choivo, ur portfolio very heavy with wce, will u suggest to buy on weakness?
27/03/2018 21:01
Jon Choivo I wish more people would do right issue like how aeoncr did. So little dilution.
27/03/2018 21:03
veln82k6 If i dont want to subscribe to right issue just sell or what ?
27/03/2018 23:26
newbie911 111% dilution...better run.
27/03/2018 23:30
Felicity Jon

If I create another structure:

For every 12 shares owned, the rights is to purchase 5 RCULS at nominal value of RM1.00 and conversion price is RM1.68. No warrants.

Is there less dilution? No, it is similar.

It is same just that there is no sweetener (warrants).

The structure is much the same, whether more shares or less shares is the same. What WCE needs to have is to raise RM634.44 million as in Page 7 of the announcement. However structure it creates, it needs to raise that amount. In fact, through this it allows the group to raise 2 to 3 times in one exercise. 1st the 50 sen, 2nd the 34 sen and perhaps warrants.

Hi Vein82k6

If one does not want to subscribe, there is a period where you can sell the "excess" shares.

Of course, do not listen to me as I have caused many not to make money through this shares.
28/03/2018 00:13
Jon Choivo Felicity,

Hmm, I think you are right. Using your structure

For every 12 shares owned, the rights is to purchase 5 RCULS at nominal value of RM1.00 and conversion price is RM1.68. No warrants.

FV of 2.35, diluted will be RM2.15 ((2.35*1200)+(1.68*500)/1700)

Cost of investment:
1200 shares at RM1.11 = RM1332
500 RCULS at RM1 = RM500
Conversion of 500 RCULS RM0.68= RM340
Total: RM2171

FV after dilution: RM3660 (1700*2.15)

Margin of safety: 41%

The margin of safety remaining after using your structure is higher probably due to less cash called on a percentage basis 63% vs 89%.



In my research, when I provided for the additional funding. I did not specify if it is borrowings or equity based.

This i think, fattened up the margin of safety in my calculation a bit. Since it did not take into account the intrinsic value per share and how it will be affected if money was raised via equity while prices are at low valuations versus a loan.

This is why ladies and gentleman, you always make sure you have a large margin of safety, so that when you screw up your calculations, its still a good investment!

Having said that, I think the sheer margin of safety (37% despite using only 8%IRR and other conservative estimates such as zero growth etc) still makes this a really good investment.

I think ill buy some tomorrow. Felicity, would you prefer the warrants after the cash call, or would you rather buy more now and go through the cash call?
28/03/2018 01:34
newbie911 Waiting at Rm0.5 to buy, safer.
28/03/2018 08:29
paperplane felicity, you are GUY or LADY. people keep questioning, address you wrongly...miss or mr.
28/03/2018 08:33
Mar Yung Chern hi jon,

If decide not to subscribe right issue, is the fv dilution same as your calculation or even worse?
28/03/2018 08:53
trulyinvest bought 0.90 sold 0.915. thx
28/03/2018 09:45
Jon Choivo If you dont subscribe.

Purchase cost: 1800*RM1.11 = 2000
Value of your shares: 1800*Rm1.58 = 2844
Margin of safety:30%

You will be diluted to the favor of shareholders who subscribe.



Mar Yung Chern hi jon,

If decide not to subscribe right issue, is the fv dilution same as your calculation or even worse?
28/03/2018 08:53
28/03/2018 10:01
veln82k6 Since the warrant can be sell i think the margin is higher..
28/03/2018 10:15
Jon Choivo yeah, mine takes only the super long term investor perspective.

For the traders etc, theres alot to be made selling the warrants etc when sentiment turn good during when the highway is completed.
28/03/2018 10:17
uptrending Just because the company needs to raise equity for the project as expected, those "investors" threw out their shares.

Ha!

It is real opportunity for real investors..

Bought yesterday afternoon and this early morning!

Cheers!
28/03/2018 10:23
Felicity Basis of determining and justification for the conversion price of the RCULS
The RCULS will be issued at 100% of its nominal value. The conversion price of the RCULS for each conversion period (“Conversion Period”) will be determined and fixed by the Board, and announced by the Company at a later date (“Price-Fixing Date”) after the receipt of all relevant approvals for the Proposed Rights Issue but before the Entitlement Date.
The conversion price will be determined after taking into consideration, among others, the following:-
(i) the theoretical ex-rights price (“TERP”) of WCEHB Shares, calculated based on the five (5)-day volume weighted average market price (“VWAMP”) of WCEHB Shares immediately preceding the Price-Fixing Date;
(ii) the conversion price for each Conversion Period will be at a discount of at least 15% to the TERP;
(iii) the historical share price movement of WCEHB Shares;
(iv) the earnings potential of WCEHB and its subsidiary companies (“WCEHB Group”) as well as its 40% associate company, namely Radiant Pillar Sdn Bhd (“RPSB”); and
(v) the overall funding requirements of WCEHB Group over the next five (5) years.

Look at Item (ii) - conversion price will be at discount of at least 15%.
28/03/2018 10:50
Felicity If WCEHB drops below 80 sen, the exercise structure has to be changed.

This exercise is a fair one for all investors with a tinge of creativeness and cheekiness.

If the company does a private placement, it will be even more unfair. This exercise calls for participation from all.

The fund raising is non-negotiable.
28/03/2018 10:54
Felicity Only problem is with the cash call, for those that has no fund will be stuck. But one can still sell the excess.
28/03/2018 10:55
LowChingHong shit!
28/03/2018 10:58
Felicity Paperplane, let's call it this investment is for Felicity's future.
28/03/2018 10:59
Jon Choivo Felicity,

If it drops below 80 sen, i dont see much change, since the conversion price is not yet determined?
28/03/2018 11:00
Felicity Jon, they can't raise enough funds
28/03/2018 11:02
Felicity They need RM634 million
28/03/2018 11:03
Jon Choivo Possible. Have not done the calculations that deeply.
28/03/2018 11:47
kahfiehlai my only worry on this counter is the completion of the project!!! Delay or hanging on whatever reason :((
28/03/2018 11:57
uptrending No worries!
Highly likely that it will turn green at the close of the day.
:)
28/03/2018 14:16
uptrending Oops... not green yet but with a small hammer .. Sellers are seen sparingly..

Hopefully already bottom...

:)
28/03/2018 17:01
Mar Yung Chern lets say if i have 10000unit, but i have not extra fund to subscribe right issue, is it worth that i sell out 28000 unit on hand and go to subcribe the rigjt issue due to right issue provide 15% discount?
28/03/2018 19:48
Jon Choivo Probably i guess, but sucks for you cause drop 17% over the last 2 days.
28/03/2018 20:57
CharlesT Wait for iculs n wa. Buy n keep for 2 years.
28/03/2018 21:01
Balan211072 Looks like a reversal wit hammer formation candle
28/03/2018 21:24
uptrending Bandar RIMBAYU
From IJM LAND AR 2014, FY ending 31/03/2014, the land measuring 81,846,191 sq ft, the book value as at 24/01/2014 (at the date of acquisition /date of valuation) is only
rm1, 258,269,000.

It is only rm15. 4 per sq ft only in the book.

WOW!

The current land value if we take @rm35 per sq ft, WCE's 40% of the SURPLUS ONLY would be rm1.14 billion, more that its current Market CAP, (1.003 Billion shares x current share price of 0.93)

The Value of the West Coast Expressway due for completion by 2019, with 60 years concessions, is FREE woh...
28/03/2018 23:49
sheep hopefully greedy newbies not influence by so so bloggers. ... No. No.Then stake holders forced to lower the share price to attract more buyers for their rights.. they just need your money.. urgently...

Dont touch future issued warrants

wakakaka
29/03/2018 09:31
Mar Yung Chern share invest just same as doing business, just a common sense whether this highway business is a good deal to invest for, that's simple, everyone have their own judgement
29/03/2018 09:56
uptrending Those shareholders have no allocations or funds to take up their rights might have joined in the sell down over the last 2 days. This could be one of the reasons for sell down and the price is depressed temporarily. There might have invisible hands in play forcing the price lower to accumulate. This is share market and buaya-s are abound.

A good indicator that the price is undervalued is that the CEO and his spouse had been buying recently for about 300K shares at prices from rm1. 00-rm1.15.

Thanks to all the bloggers in i3 for the informative write-ups

One has to digest the contents disseminated and not to follow blindly.

Cheers!
29/03/2018 10:23
Jon Choivo Just bought a little to round up my number. Aih, sad. Went up today, had to pay more.
29/03/2018 10:23
Flintstones Why do investors like WCE? The same undervalued situation is happening in Ekovest where the market dismissed the value of Duke 3. Ekovest highway is proven and has secured funding. I think there is much more certainty in Ekovest in terms of traffic as well as construction progress
29/03/2018 15:34
Mar Yung Chern uncertainty create huge opportunity, chance loss when everything going smoothly
29/03/2018 16:46
Jon Choivo You have a good point.

This one is cleaner. For me at least. Eko is a decent investment though.


Flintstones Why do investors like WCE? The same undervalued situation is happening in Ekovest where the market dismissed the value of Duke 3. Ekovest highway is proven and has secured funding. I think there is much more certainty in Ekovest in terms of traffic as well as construction progress
29/03/2018 15:34
29/03/2018 16:53
uptrending Huge margin of safety in WCE because of its 40% stake in Bandar Rimbayu, the land value is about its market Cap now.
29/03/2018 18:29
Jon Choivo Can say the same for ekovest lah to be fair. The highways is worth more than the current market cap.
29/03/2018 20:59
pakatan_harapan2 GE 14 coming soon and Pakatan toll free pledge no supporter?
30/03/2018 04:25
sheep sell on strength.. dont look back...
30/03/2018 09:22


 

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