Naive Share Investor
Questions about Melewar
strykerjunior
Publish date: Fri, 30 Dec 2016, 03:58 PM
strykerjunior
0 11
I write because I feel that I have to write. My not-so-often used mail address - strykerstryker@hotmail.com but you can still get to me through this e-mail. I welcome feedback and comments regarding my posts. If you need me to write nonsense, do let me know too. I turn nonsense into substance.
Since Mycron has been chased higher and higher and showing no signs of going back down to 44 cents, I have an inquisitive mind to have a second look at its 70% plus owner, Melewar. I have just come across Melewar's latest announcement and posting regarding its quarterly result ended 30 September. With an NTA at RM1.35, and stock is trading at 38 cents, one does wonder whether the stock is grossly undervalued or deserves the valuation.
After reading the additional notes, I am not sure of the RM230.6 million unrecognized losses of investment in Melewar's Power Associate. It is mentioned in the posting note that the investment is immaterial to the Melewar group. Why is it stated as immaterial? What happens when the losses is recognized? A huge hole in NTA reduction? Will it be recognized? Or it doesnt have to be recognized? The company can choose when to recognize the losses? Can someone enlighten me about this issue?
Only after these issues have been cleared will one have the guts to invest in Melewar. Of course, the increasing profits from Mycron may or may not be helpful to Melewar at this stage.
After reading the additional notes, I am not sure of the RM230.6 million unrecognized losses of investment in Melewar's Power Associate. It is mentioned in the posting note that the investment is immaterial to the Melewar group. Why is it stated as immaterial? What happens when the losses is recognized? A huge hole in NTA reduction? Will it be recognized? Or it doesnt have to be recognized? The company can choose when to recognize the losses? Can someone enlighten me about this issue?
Only after these issues have been cleared will one have the guts to invest in Melewar. Of course, the increasing profits from Mycron may or may not be helpful to Melewar at this stage.
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This is purely my own opinion and write-up. I do not own any shares in any of the said companies. I do not intend to invest in any of the ones mentioned above.
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