As the World Health Organization (WHO) announced Covid-19 outbreak as a pandemic,

 

 glove stocks naturally became attractive to KLSE investors.

AND WITH THE RECENT REPORT DATED 26 APRIL 2021
COVID-19

New Coronavirus Waves Sweep Through Asia

 

 

Followed by healthcare related equipment such as face masks, PPE, hospital beds and inter-related medical equipment and finally the most offensive product is Sanitizers.

__

QUOTE 
COVID-19

New Coronavirus Waves Sweep Through Asia

 

Countries in Southeast Asia - especially Cambodia and Thailand - have also seen more new cases than usual. 

New infections remained at stable levels in Indonesia and Singapore while slightly rising again in South Korea.

UNQUOTE

_______________________________________________________________________________________________________________________________________

to acquire balance 49% of NYLEX's business

Ancom is undergoing a major corporate consolidation exercise to house its 2 major business divisions,  Agrochem & Industrial Chemical,
under one roof.

Pre-consol:
Own 51% Nylex listed co (with business)

Post-consol:
Own 51% Nylex listed co (without business)
+ 100% of all Nylex business under Ancom

(Note: NOT buying over Nylex shares, only assets and liabilities of Nylex)


NYLEX / 4944
What will the Nylex minority obtain ?
GOOD NEWS
GOOD NEWS
GOOD NEWS

▪️Nylex shares still remaiN
▪️ rewards in cash in RM *****   ( + plus )* rewards in Ancom shares

Be part of an enlarged chemical group that owns both
Industrial Chemicals business +
Agrochem business

Why there is such need to have this corporate consolidation exercise
 

Nylex was loss-making the past 2 years, but petrochemical prices have progressively recovered and
Nylex is poised to take advantage with the positive uptrend in increasing revenues, with profits  in turning around
 

Ancom dilute only 10-11%
(similar to doing private placements exercises )
to console 100% profit of Nylex
 

Petrochemical business is on the uptrend, as clearly is evident in the recent results of petrochem industry players
(example :
L C Titan, others)
 

Ancom to have a record year, for profit return - this FY21
(only consol 51% of Nylex profit).
 

The coming year to be even better, exciting in profit growth 
(consolidation of 100% of Nylex profit).

SEE RESEARCH TARGET PRICES

FOR NYLEX: 

RM 1.50 short term,

RM 2.00 mid term

======================================================================================================================================
ANCOM/ 4758
Journey to 1 ,000,000,000.00 / 1 billion  RINGGIT MALAYSIAN -- market capitalisation

50 million  PATAMI,( profit after tax and minority interests ) 20x P/E
1Billion- RM ,  market cap

[ 20x P/E is very conservative ; as Hextar/Global Berhad /5151--  (is assigned a 30x P/E by Public Bank-  Research )

DETAILS SHOWING THE CALCULATIONS 
40m PAT from Agrochemical business 
20m PAT from Industrial & Petrochemical business
minus (10m) Corporate costs
= 50m PAT

(i)  Current Ancom share base = 250m
(ii)  ESOS = 20m
(iii) Issuance to Nylex minority = 30m
(iv)Total Ancom shares (post consolidation exercise )
= 300m

1B market cap/300m shares =
  SEE RESEARCH TARGET PRICES
RM3.30 per share- mid term 

RM 2.50 per share- short term,  

ANCOM transforms into one of the LARGEST and PROFITABLE flagship integrated chemical group in Malaysia
(CCM 2.0?)
With this corporate consolidation exercise,
ANCOM is another step closer in realising its BILLION RINGGIT market cap target.

Finally...

NYLEX,
  ANCOM,  
will be  a TWIN GEMS in the near future 

 =======================================================================================================================================

Manufacturer of ethanol is FERMPRO wholly owned subsidiary of NYLEX.

The above picture showing the full client list of Entopest Environmental Services Sdn Bhd / subsidiary of Ancom Bhd 

(official qualified licensed fumigator, a legal recognition awarded by the Malaysian - Ministry of Agriculture Awards the license upon the completion of intensive course on all aspects of fumigation requirements by the Ministry of Health.

Credentials - wide spectrum of clients (Tier One Clients) from:

i. Hypermarkets - Tesco, AEON, MYDIN, Giant.

ii. Banks - Maybank.

iii. Universities - Taylor's University, UPM, Garden International School.

iv. Corporate offices - Amway, Goodyear, KLK Oleo, Gamuda, Sunway, Gas Malaysia.

v. Hotels - Le Meriden, Renaissance Hotel, Grand Hyatt, The Mines Hotel.

vi. Restaurant Chains - Texas Chicken, Old Town, Secret Recipe.

vii. Logistics/Warehouses - TASCO/NYK Nippon Yusen Kaisha Group, Sanyku Group Japan.

viii. Medical & Healthcare - Ministry of Health Malaysia, Gleneagles Hospital, Caring, Guardian. 

 The above picture shows

 Entopest is offering full sanitizing services that are compliant to the US FDA regulations for industrial and commercial usage that are highly effective against 

Corona viruses.

 

The above picture shows a snapshot from one of Petronas stations in Malaysia.

 In fact, all Petronas station toilets have

 Entopest Hygiene sanitizing facilities.

 In short, it caters for all segments of market - from domestic to commercial uses.

 

 

The Specific Answer: ANCOM/4758 & NYLEX/4944

SUMMARY

SEE RESEARCH

  FOR NYLEX :   

TARGET PRICES

 

RM 1.50 short term,

RM 2.00 mid term

 ===================================================

FOR ANCOM: 

TARGET PRICES

RM 2.50 short term,

RM 3.30 mid term

Key Abbreviations:

1. Ancom Berhad - is the holding company of Nylex (Malaysia). Berhad and Ancom Logistics Berhad, both are listed on the Bursa Malaysia Securities Berhad Main Board and ACE Market respectively.

2. Entopest Environmental Services Sdn Bhd (wholly-owned subsidiary of Ancom Berhad).

3. Fermpro Sdn Bhd (subsidiary of Nylex Berhad) Nylex Malaysia Berhad.

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Thanks for reading and see you in the next post. 

 

DISCLAIMER:IT IS NOT A BUY OR SELL CALL AND IS ONLY A PERSONAL OPINION, WRITTEN AS ARTICLE FOR SHARING PURPOSES TO KLSE COMMUNITY MEMBERS.

Investment involves risks, including possible loss of investment and other losses. 

 This article and charts are provided for information only and should not be construed as a solicitation to buy or sell any of the instruments mentioned herein. 

The author may have positions in some of these instruments. The author shall not be responsible for any losses or profits resulting from investment decisions based on the use of the information contained herein. If investments and other professional advice is required, the services of a licensed professional person should be sought.

  

 ISSUED BY SEE RESEARCH 

(SENSING EAGLE EYES RESEARCH)