BSKL Stock Code 0045 - G-Neptune Berhad (GNB)

TP1 9c, TP2 12c

Possibility of White Knight To Save Damsel in Distress

First of all I would like to wish Happy New Year 2019 to all Malaysians! The market sentiment for early 2019 seems to be on the bullish side. Two IPOs have been recently listed and many rumors of take over activities going on in the market.

One of the potential take over targets I foresee is GNB. Reasonings below:

1. High Possibility of Successfull Takeover Due to Low Share Price

GNB is currently trading at 6.5c as of today market close. Compared to its IPO price of 40c, this seems like a very good bargain for the owner to takeover back the company and restructure the business. Refer below for monthly chart. Circle 1 shows the initial few months of trading for GNB at which the price was hovering between 40-65 cents. Circle 2 shows where we are at now, current trading range between 6.5-10 cents.

We could deduce that take over of GNB would be a cheap back door entry to list a company into BSKL.

2. Foreign Majority Shareholding in GNB - F8 ENTERPRISES (HOLDINGS) GROUP LIMITED (Hong Kong based)

Refer this Article from The Edge on entry of foreign shareholder into GNB:

http://www.theedgemarkets.com/article/hkbased-oil-company-now-shareholder-g-neptune

Also, below image from GNB 2018 Annual Report is referred. It shows that the F8 Enterprises is still holding onto the big stake. Therefore there is high possibility of some action being taken to restructure this company for future profits.

3. Low Number of Share Float

The total number of share float for GNB is 288,750,000 (288.75 M), implying a market cap of RM 18.768 million. Directors and F8 Enterprises combined own about 19% of the company, leaving about 81% float around 233M shares. This quantity is not very significant if we compare to mid cap companies which have 500M - 1B share floats.

Conclusion

Due to high possibility of take over activities in this bullish market  environment, I opine that GNB would be one of the targets due to the reasonings mentioned above. I will buy and hold a position in this to see if it can bear some fruit and give ang pow for upcoming Chinese New Year 2019.