Koon Yew Yin's Blog
Listed companies should buy AYS for equity accounting - Koon Yew Yin
Koon Yew Yin
Publish date: Thu, 03 Feb 2022, 09:39 AM
Koon Yew Yin
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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
Equity method in accounting is the process of treating investments in associate companies. Equity accounting is usually applied where an investor entity holds 20–50% of the voting stock of the associate company, and therefore has significant influence on the latter's management.
One of the most notable advantages of the Equity Method is its ability to enable the investor to record, show and prove a more truthful and realistic balance of income. The income on the balance sheet shows all earnings from all investments, not solely from the main company.
AYS has issued a total of 420 million shares. Based on the last traded share price of 69.5 sen its market capitalisation is Rm 292 million.
AYS reported Rm 36.389 million profit before tax for quarter ending September and its PBT of Rm 46.713 million for its previous quarter ending June. The total of Rm 83.2 million for 2 quarters or half year. All this profit was made when there was MCO lockdown. Since there is no more MCO lockdown, the company should be able to make more profit in the next half year. Even assuming its next half PBT is the same, its annual PBT will be Rm166 million.
AYS’ market cap is Rm 292 million. If a listed company buys 20% of AYS, the cost will be Rm 58.4 million. Based on equity accounting, the profit is 20% X Rm 166 million = Rm 32.2 million.
The listed company can report Rm 32.2 million profit from buying 20% of AYS for Rm 58.4 million.
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Discussions
1 person likes this. Showing 20 of 20 comments
...right.
Statements like these make me wonder KYY, or whoever is writing on behalf of KYY even realise what they are saying.
Bursa's regulations state that a listed company should have a free float of 25% of its listed shares.
The controlling owner/major shareholder owns 63.25% of the listed shares.
The author of this blog is correct, to equity account AYS's earnings into their balance sheet, a company has to buy at least 20% of the listed shares.
63.25% + 20% = 83.25%.
Which means AYS will be in breach of Bursa's regulations and will have to untangle the mess. One of the two parties will have to sell down their stake to match the free float requirements.
Would it be someone who's just bought 20% of the listed shares? I don't think so.
Will it be the major shareholder? If AYS's prospects are rosy, do you honestly think that he'll be okay with selling down?
Or a final choice is to do another private placement. We don't know yet again if that's something the owner is keen on.
Seriously, whoever's writing for KYY, please at least learn to read up the facts on listing rules and regulations before spouting out nonesense.
2022-02-03 11:44
Listed companies should buy AYS for equity accounting by Koon Yew Yin
is WRONG statement given by KYY
A good CEO of listed co will NOT invested on AYS solely for equity accounting.
2022-02-03 14:03
Ever considered to quietly plonk out the 58m between yourselves if it is that rewarding? Difficult to unplonk it I guess,
2022-02-03 15:32
Come to think of it, no matter what, uncle is the winner la. If he cannot win big with 1 article, he just win small many more article loh. Enuf to cover his margin interest loh. The bilis will always be the loser.
2022-02-03 18:02
Uncle already made many rounds.
Dec 14, 2021 10:07 AM | Report Abuse
Based on Charles T's comment, he must have bought my shares when I started selling at 91 sen about 5 weeks ago. In the last few days, I have been queuing to buy at cheaper prices. You should sell your shares to me to learn a good lesson about charting.
HIGHCHAPERAL and you should attend FA and TA lessons given my MR Ooi Teck Bee.
AYS has been going up in the last few days when I started buying. This is the best buying opportunity when its trend is changing from down trend to uptrend.
Koon Yew Yin
2022-02-03 19:48
Sslee, you seem to like to use other i3 user ID (Posted by yewyin33 > Dec 14, 2021 10:07 AM ) comments as a basic for you own comment. Hahahaha
yewyin33 created by you ??
>>>>>>>>>>>>
Posted by Sslee > Feb 3, 2022 7:48 PM | Report Abuse
Uncle already made many rounds.
Dec 14, 2021 10:07 AM | Report Abuse
Based on Charles T's comment, he must have bought my shares when I started selling at 91 sen about 5 weeks ago. In the last few days, I have been queuing to buy at cheaper prices. You should sell your shares to me to learn a good lesson about charting.
HIGHCHAPERAL and you should attend FA and TA lessons given my MR Ooi Teck Bee.
AYS has been going up in the last few days when I started buying. This is the best buying opportunity when its trend is changing from down trend to uptrend.
Koon Yew Yin
2022-02-03 20:48
Listed companies should buy AYS for equity accounting by Koon Yew Yin
Disappointed such a statement came out from Uncle KYY.
He just does not sound like a business minded person. Nor could be identified as a skilled & talented shares investor.
Uncle KYY .... sad to hear such a things from YOU
2022-02-03 20:54
Posted by uncensored > Feb 3, 2022 8:48 PM | Report Abuse
Sslee, you seem to like to use other i3 user ID (Posted by yewyin33 > Dec 14, 2021 10:07 AM ) comments as a basic for you own comment. Hahahaha
yewyin33 created by you ??
Answer: Perhaps charlesT or qqq3 can answer you, who created yewyin33.
2022-02-03 22:03
In i3, you will eventually develop spit personality! Yeah, having multiply IDs is part of that self actualization! Admit it! So you guys can get help! Not me! I am immure since i already taken my booster!
2022-02-03 22:08
Just can't understand why people needs multiple ID... hahaha
Maybe lack of confidence need others to support yet can't find... hence create another youuuuu...
Hehehehe
2022-02-03 22:22
U uncle dont con listed company to buy listed company what an immoral act...all sell down let kyy alone in ays muahahaha
2022-02-05 17:23
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