Icon8888 Gossips About Stocks
(Icon) Jaks Resources (9) - Potential Reason Behind Jaks-WB's High Conversion Premium
Currently, Jaks is trading at RM0.84 while Jaks-WB is trading at RM0.62. As Jaks-WB's exercise price is RM0.64, conversion premium will be as follows :
Conversion premium = RM(0.62 + 0.64) / RM0.84 = RM1.26 / RM0.84 = 50%
The conversion premium in absolute term is RM0.42, being RM1.26 less RM0.84. Is this excessive ? To answer that question, we need to look at percentage.
In percentage term, as shown above, the conversion premium is 50%. This is significantly higher than the 25% to 30% we usually see in the market for Warrants. Are holders of Jaks-WB foolish by not taking profit now ?
No, they are not. Because things will look very different if Jaks price continues to go up.
For illustration purpose, let's say if Jaks price goes up by RM1.16 from the current RM0.84 to RM2.00 and Jaks-WB moves up in lock step. Jaks-WB will reach RM1.78 (being RM0.62 now + RM1.16), the conversion premium will be as follows :-
Conversion premium = RM(1.78 + 0.64) / RM2.00 = RM2.42 / RM2.00 = 21%
Can you see how the conversion premium drops as Jaks mother shares go higher ?
Lets' say if mother shares go up another RM2.00 to RM4.00, what will happen ?
Based on the same assumption that Jaks-WB goes up in lock step, it will reach RM3.78 (from RM1.78).
Conversion premium = RM(3.78 + 0.64) / RM4.00 = RM4.42 / RM4.00 = 10%
Can you see how the conversion premium has dropped to very minimal level, significantly below the market norm of 25% to 30% ?
The figures used above for illustration purpose were based on bold assumption that Jaks can one day touch RM4.00. Can Jaks ever reach there ? Lets' compare with MFCB. Based on 260 MW, MFCB's hydropower project is expected to generate RM200 mil net profit (according to analysts). By extrapolation based on Jaks' effective capacity of 360 MW (being 30% stake), the Vietnam IPP can potentially generate RM276 mil. Lets' say interest expenses maintains at RM28 mil, and mall losses RM12 mil (being 50% of RM24 mil losses), net profit = RM276 mil less RM28 mil less RM12 mil = RM236 mil.
Based on 580 mil shares, EPS = 40 sen.
Based on 10 times PER, target price of RM4.00 within two to three years time is not unachievable.
Concluding Remarks
The conversion premium of Jaks-WB looked very high based on current market price of mother shares. However, in the event that Jaks really one day goes up to RM4.00, the conversion premium will drop to very conservative level. (The same applies to RM3.00, RM2.00, RM1.50 etc, but to varying degree).
As such, the promoters (insiders) are not foolish. By allowing Jaks-WB to trade at such hefty premium (without selling down to take profit), they are hinting that there is still plenty of upside for mother shares (and hence Jaks-WB).
In this regard, sit tight, don't even move a muscle. Just dumb dumb hold. Jaks-WB could be your ticket to escape from poverty.
Have a nice day.
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Discussions
4 people like this. Showing 50 of 116 comments
Walau a...what happened to Icon8888 in 3 months time?
Someone hacked his ac?
2019-04-07 08:28
Posted by Icon8888 > Apr 6, 2019 9:15 AM | Report Abuse
There are a few persons in i3 I know can never reason with
So I never argue with them
qqq3, CharlesT, ah Seng the distorted mind
So, see you
Fm his Sifu in Jan now becomes the distorted mind in Apr...
Scary
2019-04-07 08:31
Could it be Alien killed Icon8888 b get his ID during his vacation in Tasmania?
2019-04-07 08:32
I die die dont believe my friend Icon8888 is such an axxhole kacang lupakan kulit after his JAKS went up from 0.40+ to 0.80+ and forgot all those who helped him in the past....
It must be ALIEN's work........
2019-04-07 08:37
Icon8888 is not that kind of person...
Till now i am still grateful to his tips of Johotin-wa which save my ass few years ago
2019-04-07 08:41
Now you know why you are crowned one of the most argumentative people in i3 ?
2019-04-07 08:45
This is not so consistent loh, after JAKS up from 0.40+ to 0.80+
6 sense becomes 67 sense
Sifu becomes distorted mind
I love Koon becomes I dont make this kind of money
2019-04-07 09:11
Posted by Icon8888 > Apr 7, 2019 8:45 AM | Report Abuse
Now you know why you are crowned one of the most argumentative people in i3 ?
===========
no regrets. No reason to regret my postings. I have done my best.
2019-04-07 09:51
There is nothing inconsistent.
What happened is I made a bit of money punting curry mee so I thank Uncle Koon and said I love him
But is it not big amount. Enough for KFC only. So it is also true when I said KB money not for me to make. This is especially true during this round Dayang. I stayed out of it
The above are the truth . I don't need to cook up all these explanations to BS you
CharlesT
7410 posts
Posted by CharlesT > Apr 7, 2019 9:11 AM | Report Abuse
I love Koon becomes I dont make this kind of money
2019-04-07 10:03
Good on you ! There is nothing wrong making it from KB
It is just not my cup of tea
2019-04-07 10:16
Icon8888 inconsistencies and back talking caught red handed. Same as when he say he is an engineer and can talk MOSFETs and then investment banker talk sukuk and merger specialists. Talk cock alot, but delete messages after.
Some messages he forget to delete, so you can know his real character.
Nothing new to learn here. Moving on.
>>>>>
16591 posts
Posted by Icon8888 > Apr 7, 2019 8:45 AM | Report Abuse
Now you know why you are crowned one of the most argumentative people in i3 ?
2019-04-07 10:20
Icon dont need to use KB ma...he can create it if he wants....he he
by the way - please dont Icon.. we need diversity of choices
2019-04-07 10:22
KB is easy extra money why not?
But of course we all hv our own ways to make money
2019-04-07 10:27
Posted by CharlesT > Apr 7, 2019 10:27 AM | Report Abuse
KB is easy extra money why not?
==========
how much depends on how many was bought and sold at what price.....its experience and decisions.
and I am not talking about loose change and extra pocket money., I am talking about meaningful money., serious money.
2019-04-07 10:41
Dear all,
As I mention before never mess up with CharlesT, unless you are Mr. Philip able to show your sausages.
https://klse.i3investor.com/blogs/phillipinvesting/192330.jsp
“CharlesT is well knows as mighty and all knowing (brain with muscles). A walking human lie- detector with sharp observation and photographic memory. No one can escape his scrutiny as he can see straight/right through your mind of your pretending, falsehood or noble intention”
Thank you
2019-04-07 10:54
Haha, so many sour grape but still the price getting higher higher...more dispute more entertainment, more transparent. Benefit all the investor.
2019-04-07 11:20
I deleted because I don't want to boast mah. Not because I wanted to hide. Was for your consumption only.
Sigh why people so cynical always think on the negative side
Posted by (Clark GKent) Philip > Apr 7, 2019 10:20 AM | Report Abuse
Icon8888 inconsistencies and back talking caught red handed. Same as when he say he is an engineer and can talk MOSFETs and then investment banker talk sukuk and merger specialists. Talk cock alot, but delete messages after.
Some messages he forget to delete, so you can know his real character.
2019-04-07 11:23
This sslee very green. Good intention to promote corporate governance. But the AGM questions he asked caused me to shake my head.
Same applies to his interpretation of facts and events when come to investing
But I scolded myself for being nasty to him. Repeatedly tell myself to be patient
Posted by Sslee > Apr 7, 2019 10:54 AM | Report Abuse
Dear all,
As I mention before never mess up with CharlesT, unless you are Mr. Philip able to show your sausages.
https://klse.i3investor.com/blogs/phillipinvesting/192330.jsp
“CharlesT is well knows as mighty and all knowing (brain with muscles). A walking human lie- detector with sharp observation and photographic memory. No one can escape his scrutiny as he can see straight/right through your mind of your pretending, falsehood or noble intention”
Thank you
2019-04-07 11:27
Icon8888 > Apr 7, 2019 11:27 AM | Report Abuse
This sslee very green. Good intention to promote corporate governance. But the AGM questions he asked caused me to shake my head.
Same applies to his interpretation of facts and events when come to investing
==========================
this ss is green, naive and a novice in stock market.
but that is hardly the worse from the ss guy.
2019-04-07 11:31
Mahathir says Knowledge, Integrity and grit is enough to build a family, build a strong country, be a natural leader.
Lets just assume SSlee has all 3. It is still not enough in this case. Some thing is still missing. Mahathir is wrong in this case.
so , what is missing?
I scratch and scratch to try to figure out what is missing. I think I have it. The missing part, in the case of SSlee, is called the brain.
2019-04-07 11:41
by Icon8888 > Apr 7, 2019 11:36 AM | Report Abuse
I electronic engineer specialise in communication system
My final year thesis was State of The Art Speech Recognition System. My final year project was related to Wavelength Division Multiplexing System
==============
with that resume, u should have founded Vitrox and not let 3 USM graduates beat u to it. Too bad, u went off to become a banker.
2019-04-07 11:50
CharlesT suddenly back in action. What happened to KB? Bursa no action no fun without them in full force
2019-04-07 11:55
Posted by Icon8888 > Apr 7, 2019 11:56 AM | Report Abuse
He lacks the ability to know what he knows what he doesn't know
=============
I can accept that explanation but it leads to the brain too doesn't it?
2019-04-07 11:57
ok la let you boast boast a bit, so you can be happy happy. It doesn't make a difference to me. The only thing that matters is how you carry yourself as a human being and how your investment theories work out.
As long as when you post your chun chun buy call, you match up with with your chun chun sell call, then i'll be happy to call you sifu all you want. don't pump and then dump, then I'll keep my comments to myself.
I assume since you say your JAKS is wonderful 10% portfolio investment you will keep it at least until it hits your assumed value of RM3?
Lets see how long that will take.
>>>>>
I electronic engineer specialise in communication system
My final year thesis was State of The Art Speech Recognition System. My final year project was related to Wavelength Division Multiplexing System
2019-04-07 12:22
My attitude is to match your arrogance
Especially "I hope you learn something today"
Otherwise I am very humble
Check out my earlier posts all this while
I treat people nicely
Only assxxxx that walks around like he knows best will receive my special treatment
Posted by (Clark GKent) Philip > Apr 7, 2019 12:22 PM | Report Abuse
ok la let you boast boast a bit, so you can be happy happy. It doesn't make a difference to me. The only thing that matters is how you carry yourself as a human being and how your investment theories work out.
2019-04-07 12:32
U talk big & have big egoistic meh ??
Ask yourself 1st how well your QL is doing against insas and mnrb b4 u try to talk big me 1st loh...!!
Do not try to simply rundown...U r not up to mark yet mah...!!
Posted by (Clark GKent) Philip > Apr 7, 2019 12:28 PM | Report Abuse
see, another troll in stockraider. He makes it worse when he copy paste entire past comments to fill up his comments to block out other people. what he doesn't realize is he just talks the same nonsense over and over using similar words. I give him 5 minutes before he pollutes this thread with new (repeated everywhere) comments on his 3 yrs 3 months SAPNRG 70 billion RM3 strategy.
2019-04-07 12:35
I dont have any personal emotion to anyone here.
Just the way my bro icon8888 argue or defence very humour.
Like !
2019-04-07 12:37
The other Coach i respect is TYyap ...
He has the quality attitudes as a coach.
Which is a must , so that be able to guide his students at the right path and attitude.
Although i just lucky to be able to wacth his live... after plane sifu recomend Tyyap.
2019-04-07 12:40
But whatever u say we are still well ahead loh...!!
If make monies is like your logic big cap....then everybody just buy maybank loh....!!
I think u r not so stupid to come up with such a senseless arguement but i m wrong loh...!!
Your ego & arrogance affected u loh....!!
Posted by (Clark GKent) Philip > Apr 7, 2019 12:39 PM | Report Abuse
your mnrb + insas is less than 15% of QL market cap. and you dont even invest in either of them, as your foaming spamming of SAPE everywhere is showing. trolls like to compare 3 months result and say their investing is working. I'm looking at 2+ years remember as per your challenge? give you a chance, as 10 years results nothing much to say la. we know who winning.
But more importantly, notice who doesn't go around spamming their investment thesis on every page? I'm confident in my investments, unlike office boy trolls.
2019-04-07 12:44
Here is one good lesson, from an old man who is wise enough to admit his mistakes.
don't boast so much on being an ex-investment banker/ex engineer etc.
Hope Icon8888 learn something new today.
>>>>>
Most investors cannot control their emotion. They are egoistic and greedy. When their shareholdings are going up, they would not sell and like to boast to all their friends that that are so clever to have bought them at much lower prices. The biggest problem that most shareholders have is greed and refuse to sell early to take profit. Profit seems like a dirty word. While the price is going higher, they continue to boast.
2019-04-07 12:51
stockraider... now you spam other thread as well? really nice job, i give you 3 minutes to start foaming at the mouth your wonderful SAPNRG investment 70 billion in 3 years and 3 months.
2019-04-07 12:52
It is much better to buy a wonderful business at a good price than a good business at a wonderful price.
2019-04-07 12:58
Is it troll of different opinion leh ??
Dictator like u cannot stand a losing arguement will use troll to try to shut ur opponent up loh..!!
Raider is not impress loh....!!
Posted by (Clark GKent) Philip > Apr 7, 2019 1:07 PM | Report Abuse
Troll shut up. Your comment makes zero sense whatsover. another troll who likes to argue for the sake of arguing.
Hey. Im still waiting on your spam on why SAPE is a good investment. Why so slow? need to warm up engine is it?
>>>>>
Agree is relative it does not mean u must be 100% agree mah...!!
2019-04-07 13:14
Posted by stockraider > Apr 7, 2019 1:14 PM | Report Abuse
Is it troll of different opinion leh ??
==========
not just about differences of opinion. Its the way u conduct yourself, your repetitions and the way u hog up space wherever u visit.
2019-04-07 13:23
Posted by Icon8888 > Apr 7, 2019 12:32 PM | Report Abuse
"I hope you learn something today"
=================
I actually prefer this statement to the fake Thank Yous from u know who.
"I hope you learn something today" .....and more young people learn about investing as participating in the growth of excellent companies is a good thing. I am sure the PM and Bursa would approve.
2019-04-07 13:28
No more comments
Just quietly enjoy the bull run
I expect it last into 2020
2019-04-07 14:07
I tell you all ah, US Treasury Yield Curve inverted liao.. Now it's time to buy into some zero leverage companies lah! Very dangerous times. I a bit scared!
2019-04-07 14:12
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Posted by Icon8888 > Apr 7, 2019 7:29 AM | Report Abuse
Doesn't matter
I don't trust KB, so I don't make their money
Let others make it
I am at peace with myself
No regret
Posted by Icon8888 > Apr 7, 2019 7:30 AM | Report Abuse
In stock market , certain money is not for me to make
Day one I started with bursa many many years ago, I already aware of that
2019-04-07 08:27