Not really many people trapped as the 3 major shareholders already own 72.4m shares, meaning to say only 30m shares were held by others.

Let say the others were buying in average of 1.10, paper loss of 10m only.

I think from now onward, almost all SPACs will have the same fate, that all their QA will fail.

The reason is simple, once the QA passed, the company net value will be diluted by the management/promoters' free shares. Unless the management can find a QA that its fair value is 25% higher than the purchase price.

As the construction business has just started not long ago, we can not use any of SGB previous results as reference because they are not applicable at all, e.g. for the quarter ended 31.12.2015, the revenue was just 10.4m (6.9m ceramic + 3.5m construction).

Look at the following 4 new projects:

1) Kemaman Phase 1B, Value 71m, company estimated 5m profit (or 7%), over 24 months.

2) kemaman Phase 2, Value 139m, company estimated 15m profit (or 11%), over 30 months.

3) JB Project, Value 176m, over 30 months.

4) Sentul Project, 80% JV, Value 144m, over 30 months.

The above 4 projects will in total contribute revenue per quarter of 52m, many times compare to the quarter ended 31.12.2015.

As the project revenue come in in the shape of S-curve (those in project management should know what is S-curve). I would say we will not see revenue of 52m per quarter in this year, but it is the average for the next few years, so we can use it in our calculation.

Take Gross Profit Rate of 7% (use Kemaman Phase 1B), the gross profit will be 3.64m or 3.5 cent per share.

Is this 3.5 cents gross profit per quarter Good? I dont know.

According to the latest announcements to BURSA, the major shareholding as of 28.04.2016,

1) Greenfield (Lim Yoon Loy) ~ 32.3m
2) Kuan Poh Huat ~ 19.7m
3) INNOFARM ~ 20.4m

Total 72.4m for the above 3 major shareholders, or 69% from the company total outstanding shares.

I think the root cause of the problem is the difference of NTA per share. i.e. 48 sen if QA failed but only 35 sen if QA passed.

What I can suggest to SONA is to refund 30 sen cash instead of 8 sen to the shareholder except the management/promoters.

Shareholders would feel better as the free goodies for the management/promoters is now very much less than the 20% free ownership.

Then after that, carry out a right issue to raise fund for STAG subsequent project financing, this exercise is not really in very hurry as the STAG purchase price is not the major part of the project budget, it is the subsequent project activities that cost much more money.

Why not ask the 23% YES to buy from the 77% NO?

Yes, santos has an agreement with sona, but there must be an expiry date, and I believe it is quite soon.

I think the idea of SPAC is not workable.

10% of IPO money to be spent in 3 years duration for looking a QA is a bit too much for me, but still can be accepted.

But the almost free 20% ownership upon successful QA is totally not acceptable to me. What kind of expertise and experience worth that much of money?

To justify that, I as a shareholder would demand that they must get a QA that cheaper than the market value by an amount of that 20% ownership.

If not I would better reject the QA and get back my money.

I think the IPO money was 550m, take out 55m for operations/expenses, 495m kept in the custodian account, accumulating interest and the balance as on 31/12/2015 was 527.5m, so per share = 527.5/1100m = 48 sen.

I tot they can not touch the money in the custodian account before a sucessful QA, so the 527.5m as at 31/12/2015 should be intact, plus any bank interest from then until liquidation date.

I was wondering why din they buy from open market and support the price, now I understand the reason. They are not stupid as what we think of them, they might know very early that majority of the shareholders would vote for NO, so they might have to buy until 70% then only the share price could maintain at 48 sen.

Shaun Loong, for those shares trading at around RM1.00, it is common that their volatility is around 30%. For comparison, blue chip MAYBANK's volatility is now around 11%.

914601117, I think the mother share will trade at high level for sometimes. The reason is the company need money for the projects, people with PA and WA will not pay money to convert to mother share if the mother share price is low.

Shaun Loong, What I do is take immediate previous 91 days closing price, take LN(P2/P1), so we have 90 data, from there I get the daily volatility, then multiply with SQRT(244), assuming there are 244 trading days in a year, then that is the annual volatility.

Shaun Loong, the volatility you put into the model is too much lower. I download the historical data from yahoo finance, and calculate the volatility for its past 90 days, it was 50%, however, just assume the future volatility will not be that high as previously, for safe I just take half of it i.e. 25% and put into the model, the fair value for SGB-PA is 19 sen.

Another thing is the risk free interest rate, in actual it is referring to the future expected gain (price+dividend) for the mother share, I would put 6% instead of 3%, if so, the fair value for SGB-PA would be 23 sen.

Anyway, just keep the risk free interest rate as 3%, the fair value of 19 sen is already so attractive.

Russia said a few days ago that they might increase their oil production. They also said they have no problem to do that as their cost of production is only US$4 per barrel.

sonapetroleum, You said the cost of production is US$30 per barrel.

But I read your circular (page 57) announced on 8th of March 2016, there are also other following costs which are significant:

1) Repairs and maintenance
2) Weell work-over costs
3) General Admin and marketing expenses
4) Other costs

sudahkena, Yes, I agree with you, once after QA, we should look at WA, but provided you know how to calculate the fair value of WA, use option calculator to evaluate it.

Dont worry on QA issue, the QA most probably will get thru.

The reason is simple, the promoter/management would stand to lose huge money if the QA fail, as they are not entitled to the refund.

So they will try their best and very hard to get the QA pass thru, they are not stupid like what you think they are.

How could a group of stupid people managed to set up a SPAC? That means since they have already managed to set up SONA, they are much more clever than what you think about them.

So dont worry if you really want the QA successful. But I think you should instead worry more on whether the share will trade above NTA or below after the QA.

coolinvestor, a big No, as you wont know what will be the share price after getting back 8 sen capital.

lkwwgp,

QA will get thru if price go above say 50 sen, all yield investors will sell their shares, and those buy above 50 sen will not reject QA just to get back less than 50 sen, which is a sure loss.

Some people want to see the QA get thru because they truly believe SONA is a good company and will give them good return.

Some people hope for faster refund, so they want that QA get thru, beware of this group of people, they just say SONA is so good but without facts.

For me, I hope that QA get thru, as I want to see whether my prediction is correct or not, that SONA will trade below its NTA, similar to HIBISCUS's case.

Companies A, B and C, share prices all at RM10.00.

Company A issue Cash Dividend RM0.50, DY=5%.

Company B issue Cash Dividend RM0.40 with DRIP option issue price RM8.00, so DY=4%? or 5%?

Company C boss said, why so troublesome? I tell you DY=10%, you just need to sell 10% of your shares.

So company C turn out to be the highest DY among the 3 companies?

wooddragon, Yes, that is how I define DY.

jayloh, please try to digest this para again:

可是啊，一间公司健不健康，值不值得投资，不是看我们个人从公司得到的DY，而是应该看整间公司派出多少现金，而从此算出DY。

jayloh, what M&M said may be applicable to the developed countries e.g. western countries and Singapore, where the management / major shareholders are more likely can be trusted. But for third world countries, we better listen to Dr. Neoh who said that Dividend is the most important indicator, even more important than earning.

Anyway, to be safe, just apply that Dividend is the most important indicator, regardless of which country.

jayloh, read again my article, my point is simple, MAYBANK's DY is 2.3%, instead of the so called 6% DY.

moneySIFU，不要忘记，你也曾经骂我笨的人之一哦，后来你见不对路，才把comment删除掉的。我在论坛里是不会先骂人笨的，你呀会先骂我笨，你才自以为很聪明。。

I mention that because some small boys keep using abusive words like stupid and etc.

rosetan, it is not about cake at all.
I am telling that MAYBANK is not a milk cow, the DY is 2.3% only.

jayloh, please spend more time to digest what I said in my article.

认为自己很聪明，肯定我是错的话，可以考虑去MENSA考IQ吧，明白自己的智商，是好事来的。。

Dont forget that the DRIP come with sweetener, the issue price is at discount of market price. So, end-up most shareholders opt for share, the company achieve their objective of keeping cash within the company, or in the first place their have difficulty to distribute out cash dividend.

jayloh，你的建议我没兴趣花时间去做，不如你自己去做咯。

如果拿了股也算是股息，那么有心的公司就容易做了，老板希望钱留在公司自己玩，好过派发给股东，所以每年发20配1红股，等于DY是5%。

我把我的意见写在这里，大意是MAYBANK的高股息是假象，这样也会踩到别人的尾巴吗？真奇怪，怪事年年有。。

bsngpg, 我写的东西有那么难明白吗？我已经尽量写得浅白了。。

moneySIFU老兄，欢迎光临寒舍。

看东西要深入一点，才不会只看到表面，马银行的DY看似很高，好像很便宜，其实是2.3%而已，偏低但勉强还是合理，想要买来做长期投资，要求不高的话，OK咯。

Dont listen and believe 100% what they said, they can say until their saliva dry, but it is still what they do is more important.

The promoter/management's 282M shares and also warrants will be zero value if the QA not voted thru, suppose the share price after QA approved is RM0.35, that is RM98.7M.

Why not they take out their own money (or borrow from somewhere), say about RM50 million to buy SONA shares from the open market now before the next EGM, they can get about 100M shares.

Then they would have 100M+282M shares before the next EGM.

1) If the QA go thru, then their shares worth 382M*0.35=RM133.7M, minus the money RM50M they put in before EGM, they still get RM83.7M.

2) If the QA still fail to get thru, they get back 100M*RM0.48=RM48M, only lost RM2M plus some interest.

I cant understand why dont they do so, I believe they are allowed to do buy shares from open market.

Stockraider, Thanks for the information.

No need to do so much thing, the promoter / management just need to take out money from their own pockets and buy SONA shares from open market. QA will definitely get thru when the price go higher than the cash value of the trust account.

They can talk until no more saliva, but it is still difficult to get 75% YES if you yourselves dont want to risk your own money.

Can consider to buy the mother share, I am quite sure the price would be higher than 48 sen before the next EGM, but must sell it before EGM.

作者为什么肯定QA成功后，母股的价钱依然在0.46呢？

或许有人已经有信心QA大概是不会过关，所以愿意以0.46的价钱博它退钱。

不要忘记，QA不过关，公司解散后，只有1100M股的持有人分享公司的资金/资产，
一旦QA过关，不是1100M股而是1400M股了，所以每股的NTA马上变成在0.35（25%股东要求退股)到0.38（没有人要求退股）之间，所以我认为一旦QA过关，极有可能母股价钱立刻掉到0.35～0.38之间。

同样性质的HIBISCUS，目前NTA是0.43，而股价却只在0.20上下，问一问自己，SONA比起HIBISCUS，有什么不同的优势呢？

If QA get thru with 100% YES, the NTA will be 0.38,
If get thru with 75%, and 25% ask for money back, the NTA will be 0.35.

Now, look at the Stag deal, purchase price is USD25m against fair value of between USD30m to 40m, just take the middle USD35m, translate to a gain of (35m-25m)*4/1400m=3 sen per share.

Compare with Hibiscus, which the share is currently trading below its NTA, i.e. 20 sen against 43 sen, the share price is not even half of its NTA.

I am wondering, what is so special about SONA that many of us are so confident that its share should be trading higher than its NTA?

If we want to listen to Dr. Neoh, might as well listen more from him. Please also check the combined rating given to these 3 companies.

I tot warrant could not be exercised before QA get thru, meaning zero value?

The earlier computation shows that the NTA would be 0.38 after QA, assuming 100% vote for Yes.

But let say QA get thru with 76% Yes and 24% No (ask for refund). This 24% people will get 0.48 refund sooner.

So, in this case the NTA will be (0.38 - 24%*0.48) / 76% = 0.35, down 0.03 from earlier computation of 0.38.

rohank71 might be right, there might be persons who keep telling people to vote for YES so that they can get back their money much sooner.

我已经在文中说出了比例，即是70000C12配合80000HO，
假设月底指数的结算是F，
70000C12的价值=70000*（F-1520)/700 = 100F-152000,
80000HO的价值=80000*（1808.88-F)/800=180888-100F,
以上两者加起来，F就被删除掉了，剩下180888-152000=RM28888，
所以你要做的事，就是买入70000C12和80000HO的总成本要低过RM28888就包赢了。

Australia is not a 3rd world country where you might be able to get a cheap bargain by connection or bribery.

STAG was opened to many bidders and the highest bidder got it, so the deal couldn't be a very good one, the most is a bit cheaper than fair price.

So there would not be any quick and big gain immediately after the purchase.

As for future earning, that depend very much on how good the management handle the project and also luck, i.e. oil price.

I was working in oil and gas as for 18 years, but because I was just an engineer, dont really have clear picture on project profitability.

Good luck to all.

Note: Re-post again as the previous one typo error.

To me, expenditure per barrel of around USD48.4 is not competitive at the moment, the only hope is on brent moving to USD60, but how likely? Might as well take back the money.