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Author: Tan KW   |   Latest post: Sun, 20 Oct 2019, 4:49 PM


CIMB's downward revision on Bumi Armada is weird - felicity

Author:   |    Publish date:

Thursday, February 21, 2019

Since my purchase of Bumi Armada two days ago, CIMB came out with a downward revision of the target price of Armada from 70 sen to 30 sen. If the summary that TheStar is made correctly, I feel that it is weird that CIMB has taken the probability of a right issue to be called by Armada at 70% and it will stay status quo at 30%. Hence, based on that probability the analyst downgraded the call to 30sen.

First of all, if ever Bumi Armada is doing a cash call through rights issue, there should not be a revision in target price as a rights is a new call altogether. It should not affect the price unless, he is really looking at short term and not fundamentals. Secondly, as seen from his detailed analysis, he did a very thorough sum of parts analysis on the company identifying and valuing all the projects - after which he put a discount to the value - which to me is correct. However to put a weightage on the rights call probability and reduce the target based on that does not come from the "valuation book". There's no CFA that teaches that.

It additionally says that because Armada is contemplating to bid for new projects, hence it will need rights issue call. Again, the fact that Armada is looking at expansion by itself is not a bad thing, in fact it is a good thing.



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Labels: ARMADA

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Chart Stock Name Last Change Volume 
ARMADA 0.445 0.00 (0.00%)

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HerbertChua Such a low quality investor like felicity should be ashemed of themself.

these are investors that try to cheat other innocent investors after trapping themself

Thank you.
Godly Chua
21/02/2019 11:04 AM
supersaiyan3 Felicity, don't mind, that Herbert Chua has no financial knowledge.

I help you check the cimb report.

I am curious if it is Raymond Yap who downgrade Airasia to rm1.82.
21/02/2019 11:30 AM
supersaiyan3 Yup, its Raymond Yap again.

Email to you?
21/02/2019 11:33 AM
value88 Felicity is a good investor and his/her analysis are always very sensible and logical. I disagree with what Herbert Chua claimed above.

Felicity is definitely not a pump and dump guy. If anyone can't see that, the "anyone" is naïve and lack of wisdom.
Similarly, if anyone can't see old man KYY is a pump and dump guy, he is equally naïve.
21/02/2019 11:33 AM
supersaiyan3 "We slash our target price to 30 sen, based on a 70% chance of a rights issue at 13 sen, and 30% chance of a business-as-usual SOP valuation of 70 sen."
21/02/2019 11:35 AM
supersaiyan3 Herbert Chua is a problematic child, maybe he is good in his own field, maybe a good biscus salesman I guess, but not investing.
21/02/2019 11:43 AM
qqq3 I could have pointed out that CIMB was too optimistic in getting refinancing approved by bankers......now the news is out, bankers giving cold shoulders to refinancing.

NTA 80 sen.....unsecured creditors can say, pay up or else....appoint receivers and get back their money.....definitely got bankruptcy risk.
21/02/2019 11:47 AM
speakup when u buy a stock, then later analyst downgrade it....U CALL IT WIERD!
when u buy a stock, then later analyst upgrade it.... U CALL IT GENIUS!
21/02/2019 12:29 PM
AzerothJr cash calls during times of need whats so surprised about it?
In bad times as qqq pointed out creditors ask for repayment and you don't have money then ask for cash calls again whats so suprise?
You buying into the stock sure you say right issue for development or project is a good news. But reality also that when right issue really happens then the share price will plunge. Any one can say this xxx is a good company in 10years time may flourish, that is if it survive the next 3 years time able to repay its creditors first.
21/02/2019 12:29 PM
supersaiyan3 I am not helping this Mr. Felicity, but on 17 feb Raymond Yap published a report say 70c, on 20 feb he say 30c.

Note that at 30c, the recommendation is still ADD.

For me, why would you buy a company's share that's making billions of losses while many others as cheap is making billions of profit.
21/02/2019 4:23 PM
AzerothJr He is buying a company share caused its cheap as in merely few cents. Can then buy hundreds or millions of shares.
Others that you say billions of profit usually its not cheap ma.
However cheap is very subjective to everybody, what is cheap to me may not be cheap to you.
21/02/2019 4:32 PM
VSOLAR Sailang Margin All In Raymond Yap is bungkus de, CIMB IB going to holland because of him
21/02/2019 7:38 PM
Orlando Knn why buy into Armada whc is forever iffy??

Banks loans to OG sector hv hit quota for some time d no RI how else?
22/02/2019 8:45 AM
PotentialGhost No weird , amarda bangkrup soon
22/02/2019 8:58 PM
freddiehero no bangkrup la.. can do ri
22/02/2019 9:12 PM
freddiehero consolidate
22/02/2019 9:12 PM
freddiehero theb ri again
22/02/2019 9:12 PM
freddiehero rich sudah
22/02/2019 9:12 PM
mneo Better sell Armada....It’s fundamental is from bad to worse....cheap does not mean it has high potential to rise..in fact it has high risk of going to bankrupt due to its high gearing and uncertainty in oil price....
22/02/2019 9:26 PM



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