ktsk88Reach gonna call for Private placement and that's why the private investors want a lower entry for this block purchase. Hence, you will notice once the price is trading at a level for some point of time, then that is the rough price to determine the PP issuance.
But definitely the stock will trade lower for days to come because it is full-fledged biz based on oil revenue. The longer the company drags on with the oil biz and reported lower earnings or losses then the stock will trade lower and lower.
Therefore, you guys better bet it reported good earnings to sustain the price at it is.
Based on the current stock price, and a reasonable PER 12x, the earning or profit should be 68mil per year or 17mil per quarter.
ktsk88The price of warrant now trading 28% premium which is still acceptable.............but once mother start downtrend..............the warrants will follows
if investors think that it shouldn't command that high 28% premium...........then it will falls rapidly.
Many now trapped hoping after the QA is approved the stocks will rally up....................but forget that once you accepted the biz............it takes years to report decent earning to sustain the stock price or better price...............but now too late........you need to hold longer term unless the assets churning good results immediately in the coming months but that still need at least 3 to 4 quarters to fully evaluate the fair price of the stock.
HYGThanks 88 for explanation. Should Reach in bottom already?
ktsk88No ones really know the bottom but the price will suffers more downside due to private placement and also re-rating of the stock based on biz and earning fundamental now comparing prior to QA approval which at that time all the hype is the QA will fails and the yield return is +-0.77sen.
Now the scenario is completely opposite and only those big ticket holders will determine the supports for the price artificially.
speakupReach mother and warrant are moving in opposite direction. Warrant premium getting larger and larger.
speakupwarrant still 37% premium to mother despite warrant dropping 12% today.
kmtan88Reach's mother share up these few days & warrant is sure to follow
jeffrey1969happy new year 2017! anybody know this counter still can UP UP UP? thanks
stockraiderReach Energy Bhd - New Oil Junior in town Author: HLInvest | Publish date: Wed, 4 Jan 2017, 11:12 AM Highlights
Now an O&G Junior. Upon getting vote acceptance for QA on 16th Nov 2016, Reach will now become a full-fledged oil junior with final adjusted Purchase Consideration worth US$175.9m. Acquisition has been completed on 27th November 2016 with dissenting shareholders already being repaid. Emir-oil a balanced portfolio with high quality crude. Situated in Kazakhstan, currently Emir-oil possesses 4 producing fields coupled with 2 development fields and 6 drillable prospects, pointing to high potential growth in pipeline of reserves. In addition, it also produces high value light and sweet crude oil and possesses high condensate yield in one of its producing fields, indicating more room to further monetize the acquired asset. Oil asset was bought at low. While the oil market has been subdued for a long time, we believe the upstream asset acquired by Reach was at the lowest price possible. The acquisition price was determined on 4th March 2016 when Brent was at US$37/bbl, not far off from its multiyear low of US$27/bbl. This shows that Reach would be able to reap full benefit of long term oil price recovery with minimal downsides. Current Brent price is at US$57.5/bbl. Building CPF to unlock oilfield potential. MIEH (vendor for the QA) has already invested in a Central Processing Facility (CPF). Phase 1 is expected to be completed in several months time and upon completion of the pipelines in 2018, Reach could easily double its oil production to more than 10,000 bbls/day by executing more well completion and drilling more wells in its proven areas. Phase 2 would again bring its oil production to level in excess of 20,000bbls/day upon completion, indicating vast opportunity to reap more value from its oil reserves. Market ‘under pricing’ its long term prospects. At the current share price of RM0.66, market seems to have only price in long term oil price of US$67/bbl (for 20-year time frame) - based on our backward calculation of assuming other variables being constant. We are of the view that oil prices would eventually recover to US$57/bbl beyond the implied level as oil market rebalances while cost of oil production is expected to rise in the long run.
Catalysts Direct beneficiary of oil price rally. Entering into production asset early stage providing more upside possibility.
Risks Oil production natural decline, oilfield operational risk, country risk.
Rating BUY (NEW) Minimal downside risk at this price point while the company is expected to escalate to the next level by tapping into the reserves of a young oilfield with limited risk of straining balance sheet.
Valuation Our discounted FCFE (10% discount rate) approach has yielded a TP of RM0.83 at fully diluted level (assuming dilution from potential placement and full exercise of warrants). Near term exercise of warrants is unlikely as the expiry date has been extended for another 5 years to 2022 post acceptance of QA by its shareholders. To illustrate, excluding dilution impact from warrants, our TP would be at RM0.91.
stockraiderSO FRIEND...IF REACH TP IS RM 0.91....THEN WARRANT SHOULD BE AROUND RM 0.22 LOH.....!!
THIS IS QUITE A LONG WAY TO GO LOH....!!
dfsbipohschREACH ENERGY - RETURNING TO UPTREND POSITION AFTER THE BREAKOUT OF RM0.64 Author: HLInvest | Publish date: Fri, 6 Jan 2017, 12:08 PM • Our fundamental pick is our recently initiated oil junior, Reach Energy (refer to our report dated 4 Jan 2017) with a target price of RM0.83. Reach has graduated from SPAC and became a full-fledged oil and gas company after the completion of an acquisition into an O&G field in Kazakhstan on 26 th of November. • Technically speaking, soon after the breakout of the RM0.64 level with high volumes, we opine that the recent correction phase has ended reinforced by a higher high formation. Also, the MACD Line has crossed above the zero level – indicating share price has potential to trend higher over the mid to long term. • We called a technical buy on Reach Energy on 29 Dec and it has hit our LT objective target of RM0.71 (+13.8%). Following the continued bullish indicator on the stock and upside to our institutional TP of RM0.83, we revise our technical target to RM0.735-RM0.765 levels. • On the cut loss strategy, we move our trailing stop level higher at RM0.68. • Reach-WA is a cheaper entry which offers gearing of 5x. The implied warrant value is at 25 sen per warrant based on mother share target price of 83 sen. Source: Hong Leong Investment Bank Research - 6 Jan 2017
newbie_201615 sen already... used to be 8 sen.. jalan already loh