Dear Valued Affluent Investors,
As all investors know, the recent chaos in financial markets sparked due to the viscious coronavirus outbreak which lead to many margin calls and oversold stocks. Nevertheless, do take a look at how Ecoworld and UEMS is positioned in this current economic environment. The fundamentals of this Penny stocks should catch the attention of institutional and affluent investors. These two companies need no introduction as they are the Property Titans of Malaysia.
STUNNING VALUATIONS - LITERALLY
Graph 1.0 : Valuation ratios & Book values of these two companies
As you can see, Price to book ratio trading at 80% Discount with almost 70% of its market capitalization wiped out from the previous glory years in 2014-2018. Market capitalization for both companies only at RM 2.4 billion today compared to a combined value of RM 8.3 billion in 2016
Charting Possible Rebounds
Chart 1.1 : Ecoworld Berhad's Oversold Conditions - Possible due to margin calls & Panic Selling
Chart 1.2 : UEM Sunrise Oversold Conditions- Possible due to margin calls & Panic Selling
These charts are oversold and there should be a rebound to at least RM 0.50 based on strong fundamentals and book values.
Potential Merger & Acquisition
Source : NST & TheStar Online 2019
At these cheap valuations, acquisitions or privazitation of these companies at fair value of above RM 0.50 sounds reasonable. After all, mergers only complement synergies, improve margins and economies of scale during these tough times. The value of land banks for both these values combined exceed the value of its market capitalization multiple times !!
Food for Thought :
They Said "Public Bank was just RM 2.00 in 1997 ."
Will they say these Property Titans were only trading around 30sen in future?
Thanks for reading.
Best Regards,
Greatwarrants
Disclaimer:
Investing in stocks is a great tool for capital gains. However, all investments come with risk. Therefore, all investment decisions should be borne at your own cost and I will not be held liable for any investment decisions made. Do not buy Equities if you do not know the risk !! Thank you.
zhen wei & JP
Hi, Graph chart need changes.
2020-03-25 00:16