Koon Yew Yin's Blog
Why should AYS Venture buy back its own shares? Koon Yew Yin
Koon Yew Yin
Publish date: Mon, 08 Nov 2021, 12:48 PM
Koon Yew Yin
0 1,414
An official blog in i3investor to publish sharing by Mr. Koon Yew Yin.
All materials published here are prepared by Mr. Koon Yew Yin
All materials published here are prepared by Mr. Koon Yew Yin
Share Placement:
On 2nd November AYS placed out 38 million shares at 76 sen to big investors who are familiar with the company operation and its profit growth potential. No investor would buy 38 million AYS shares unless he knows the company’s business and its profit growth prospect. AYS Venture received Rm 28.9 million cash.
On the first day of the Budget 2022 announcement Rm 33 billion was wiped from the market capitalisation. Almost all the listed shares plunged. AYS plunged to 68 sen per share. As a result, there are many forced selling to meet margin calls.
AYS is a steel trader:
Steel price does not affect AYS because AYS is a steel trader. It will only buy steel from the cheapest steel manufacturer to sell the get better profit.
AYS latest quarter EPS 8.5 sen and its previous quarter EPS was 4.45 sen, an increase of about 100%. Even during the Covid 19 MCO lockdown, AYS could make so much of profit. Currently there is no more MCO lockdown, AYS should be able to make more profit in the next quarter ending Sept. which should be announced before the end of this month.
Assuming its profit remains unchanged, its annual profit should be 4 X 8.5 sen = 34 sen. Currently it is selling at 72 sen. The PE is 72 sen divided by 34 sen = 2. Ridiculously cheap.
How is the share placement price fixed? According to Security Commission rule, the placement price should not be less than the average price in the last 5 trading days with a maximum discount of not more than 10%.
AYS Venture should buy back its own shares.
Since the company has Rm 28.9 million cash from the share placement, it should buy back its own shares at cheaper prices to make more profit. These bought back shares can be sold at higher prices when there is no more forced selling to make additional profit or kept for distribution as dividend to shareholders.
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
More articles on Koon Yew Yin's Blog
Eversendai Corporation made a remarkable comeback in FY2023 - Koon Yew Yin
Created by Koon Yew Yin | Apr 22, 2024
Eversendai Corporation Berhad made a remarkable comeback in FY2023, reporting strong profit growth. Here are the key highlights from their financial performance:
Sendai price trend reversal - Koon Yew Yin
Created by Koon Yew Yin | Apr 22, 2024
Sendai price chart below is showing its price trend reversal. It is hitting a record high.
How can KSL double its profit? - Koon Yew Yin
Created by Koon Yew Yin | Apr 18, 2024
After the stock closed yesterday, KSL announced its 4th quarter EPS which is 40.76 sen and its net tangible asset (NTA) backing of Rm 3.65. Its profit increased by 230% more than last year.
Why Sabah will leave Malaysia - Koon Yew Yin
Created by Koon Yew Yin | Mar 29, 2024
Currently Sabah Government does not know that solar panel produces the cheapest electricity???
Malaysia can be one of the richest nations in the world - Koon Yew Yin
Created by Koon Yew Yin | Mar 23, 2024
During my life time I saw every Prime Minister being replaced by another politician for one reason or another. Dr Mahathir managed to stay the longest time of 22 years.
Property Developers comparison - Koon Yew Yin
Created by Koon Yew Yin | Mar 04, 2024
All property developers have just announced their annual profit for 2023. All of them reported increased profit.
My contribution as an Engineer - Koon Yew Yin
Created by Koon Yew Yin | Mar 04, 2024
Although my writing of this article sounds boastful but I feel that it is important to keep this record for posterity. Engineers play a pivotal role in shaping our modern world.
What can KSL can do to benefit shareholder? - Koon Yew Yin
Created by Koon Yew Yin | Mar 01, 2024
What can KSL do to benefit shareholders? I hope all the shareholders will read this article so that they can attend the coming annual general meeting to vote out those directors who are seeking re...
All Investors require Anticipation - Koon Yew Yin
Created by Koon Yew Yin | Feb 29, 2024
After the stock market closed, KSL announced its 4th quarter ending Dec 2023 EPS of 12.74 sen. The total is 40.76 sen for 4 quarters. Its total EPS for 4 quarter ending 2020 was only 17.8 sen.
Property developers share prices comparison based on latest EPS - Koon Yew Yin
Created by Koon Yew Yin | Feb 29, 2024
KSL is the cheapest in terms of PE ratio. KSL Holdings Bhd is a holding company. It is engaged in real estate services.
Discussions
Be the first to like this. Showing 12 of 12 comments
Ays did share placement so that the company can buy back its share? Will the Bursa allow this or even Bank Negara? Ays needs to apply for financial license as profiting from buy or sell share commercially need licensing ( like a broker )? All the buy back is just so that you can sell out your share? That means Ays will be looking at big lose after all the traders do sell of their holding. Logic or just to save an investor wrong call?
2021-11-08 14:19
i'm sure the investment bankers pocketing the fees for arranging the placement will thank uncle koon for this brilliant suggestion!
2021-11-08 15:17
Same like how a gold trading company makes exceptional profit when gold prices are rising... they buy gold at RM100 in Jan, gold price goes up to RM110 in Feb, and they sell at RM120 in March. ... simple?
2021-11-08 16:38
Ayai you guys don't know KYY meh. The blog is to trick retail investors to buy AYS la. You think he don't know the company will not listen to his crap meh. Same old trick
2021-11-09 08:10
The company need cash for some reason, so they did PP.
Now you ask them to buy back, where to get cash again for the same reason?
To PP again at even cheaper price?
2021-11-09 08:19
Wakaka
Uncle Koon not happy price is downtrend
Buffet is say if good company price drop is ok
Just buy until pokkai
Wakaka
2021-11-10 09:26
Game over for AYS?
The earlier super profit is not sustainable.
Earlier super profit made was due to old inventory/stock bought at much lower price and sold at higher price.
Going forward, the cheap inventory/stock could be depleted by now and need to replace with new inventory/stock at higher price.
The next few quarters result should not be fantastic and expect AYS price to move South or at best flats
This is just my humble opinion
2021-11-10 09:46
Uncle KYY, Can i claim back my loss from AYS from u? If not... U don write any blog now. Wasting ur time to write and our time to read.
2021-11-10 14:53
Proceeds from a private placement cannot be used for share buy back unless you have Bursa approval.
When steel price dropped, AYS may have higher cost stocks which will incur a trading loss. Dont tell me you dont know that KYy ???
2021-11-11 10:27
Post a Comment
Featured Posts
New Update. Discover investment communities that resonate with your ideas
One App To Trade Malaysia & US Stock With 0* Commission
Apps
Top Articles
1
Good Articles to Share
Malaysia in Talks With Tycoons on Casino to Revive $100 Billion Forest City
2
3
4
5
BFM Podcast
6
BFM Podcast
7
BFM Podcast
8
BFM Podcast
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
hpcp
How did AYS make exceptional profit if it is not due to the surge in steel price? A steel trading company can sustain close to 20% operating profit?
2021-11-08 13:34