Tricky counter. Market penalizing property counters and construction stocks are also getting hit despite infrastructure theme.

The question we need to ask is if there so much jobs / potential business opportunity why havent they called for the RI yet when its approved ? Everyone knows they are borrowed to the max and just becoz 'a few substantial shareholders' had a higher than preferred entry price, they dont want to sell too cheap ?

Discounting this Malton JV profits, what is the residue value of this company and mgmt ? You should think about this coz like many companies who will receive large cash payments ( or in kind ), they are most likely not going to give you a cash dividend and invest it into something that you might not agree as a shareholder

The truth is I doubt there is a takeover or anything. If its a real threat, KKP will definitely defend as his share price which is at the all time low and he has the financial capability. The reason he doesnt give a hoot about the rest of us is coz he and his proxies control a sufficiently big block.

If he was selling, do you think he will let the new shareholder buy at this price in the open market ? I would quickly push up my own share our start making revaluation calls.

I think its the syndicate that is taking advantage of circumstances and yes I also agree that TS Wong did not have to make that silly announcement and question the motive behind it.

If IWC is such a good company and receiving more than 2b+ from land sales through JV with Greenland, why bother to inject into Ekovest?

By the way, most of the value that they state is future earnings as IWC will only receive 200m-300m in the short term and balance to settled in 2-3 years as per SPA terms if i recall correctly.

Dont forget IWC has to a 20% stake in JV with Greenland company which means do they will probably need to come up to 20% of the 2b+ purchase

I like this counter but already sold since that silly announcement the other day. Have to face the fact that there are a lot of asset rich companies that are cash flow poor and still waiting for a real catalyst to unlock the value of this company.

When there is no story, some people dont mind still holding undervalued companies but once you feed people with a story and take it away, you take away hope and sentiment.

From the drop in volume since, it would appear game is over for now until later if price drops back to 16-18 cents.

Yes coz you will get it cheaper for now. That might change over the next 2 weeks.

But dont use those funds as reference coz they got big stake and wont affect their average cost anyway and they have people that help them with the trades

Only MUI Ind is moving but not PMC, PMH and MUIPROP which means the valuation must be in other businesses. The question is how to set a target price without figuring out this link.

Anyway kudos to Calvin. I wouldnt thought of buying this counter otherwise.

Beroh, if you dont have the funds to convert all, maybe consider taking half as loss and convert the rest ? If you take up and WCT bounces by 30 cents to 2.00 in the next 1-2 years, you should be able to recover all your losses with a profit.

Chua Zhi En, you have to understand that there are many in this forum that like people to lose money or they are envious whether others make. Go to any active stock you will often see people cursing and hope it drops when its on an upward trend or they will keep repeating negative comments either it goes up or down. After a while, you'll learn to ignore them and they wont bother you then. Just let karma do its job

Linges, I always have the view that there are smarter players in the market and most of us here are just small retail investors / traders that are not in a position to influence the price anyway. I dont any have negativity in me and just hope that everyone here makes some money. Hope WD recovers for you too, I still have some.

He he this why I don't believe short term trading, would have missed this ride

Anyone with news on whats going on apart from just Ts Wong + partner buying in ?

Calvin, no conspiracy theories on what the synergy or purpose of them to acquire a stake ?

There is actually a very big difference between call warrants and company issued warrants as the company itself can influence share price for conversion of company warrants whereas the company doesnt care about the outcome of 3rd party call warrants, as there is no benefit to them.

Linges, I have solution for you to make back on WD even with your limited capital. If your interested drop me your whatsapp contact / email here. I'll text you later.

Linges, buy WCT mother now and treat it as you converted. For whatever amount WD you bought, buy the same mother. You get a discount of 4 cents and whatever price u paid for WD cost, just add it your mother cost.

Hold 1 to 2 years, I'm sure you will make back.

If price surge the next 2 weeks, and WD is at a large enough negative premium, sell mother and convert WD to lower your effective cost.

Only TianTThuat can beat Calvin in the number of posts per day.

So know I can confirm he has some MUI at high costs too. When price down everyone so quiet, when prices go up all the super cheer leaders wake up.

Calvin is right all the way until this point. But there is something everyone is forgetting. We are valuing this company because of this cash inflow thinking that a debt free company like this will be some benefit to its shareholders.

Enter sleazy management. Unfortunately i think they will use up all these funds for development or buying over other related assets instead of giving us a cash dividend.

Unless you want to bet on 'them' to do development better than 'real developers' in the current challenging market environment, whats there to stick around for. There are plenty of companies that are asset rich but dont good in increasing shareholder value.

Now i know why some people dont bother to comment. Power96, if you bought WD at 23 cents had the money to convert and still held it when it was 1.5 cents to 2 cents, even an idiot would buy heavily and average. So why in your logic wouldnt anyone have done so ?

Today, WD presents the lowest premium and WE the highest premium. True we should look at expiry but do you know what your buying and paying for. WE premium is 68 cents roughly thats means its overvalued by this amount.

One thing for certain, with that kind of premium price can go down and stay this way for a long time even if mother moves up as its at a very high premium to pay. Secondly, look at your expected return if WCT hits 1.7, 1.8, 1.9 and 2.0. Since everyone is 'gambling' in hope that WCT moves up, i would sell WE and buy WD, c3 or c4 that gives me lower premium and higher returns.

Its about expected return and what premium you are paying, not whether its a better structure or company. Before today WE was >70 cents premium.

Remember what i said about who might have the last laugh.

Funny how the people here think. Got large orderbook ppl say sure have to borrow money and gear up or call for capital injection so negative.

I guess their prefer to invest into stocks with limited order book with no / little gearing. Sure that will do a lot for ROE

Also, judging from the comments most people here are clueless about gearing and financing structure. I dont think WCT gearing is high i.e. against a networth of 2.7b how much are their borrowings and dont forget large projects are normally against contract financing which is deemed well secured / low risk with cashflows from awarder structured to payoff each loan.

Go study other construction companies with weaker profiles and track record, and some of these are bumi companies. Ever ask yourself why these profiles with lousy financials they can still borrow ?

Do you even understand the concept of borrowing and why all big companies in general borrow for short / long term financing. If you dont, do yourself a favor and stop being lazy and learn something.

Anyway lets see who has the last laugh on WCT, be interesting to see.

Also take note EPF and MS have been selling the past few days

I liked her article coz there are somethings i agree with. Media is really managed by a big bunch of idiots and i took notice coz one of my friends in a senior position was strongly promoting Media as a buy for his research house at 1.15-1.20 level on the basis on 'election stock' and monopoly for all the outdoor advertising including ALL the MRTs apparently.

I almost bought into it but got turn off buying a stupid business from Rev Asia at a ridiculous valuation. I hear what some people are saying about US comparables ( e.g. AOL example ), but this is Malaysian market so local market dynamics cannot be ignored and have you actually been to any of those sites that Media paid 100m+ for ? Rojaklah,etc is definitely not a Huffington Post in my honest opinion.

But the point is on what i learnt about equity that it is all a factor of price. At the current price i think its still attractive and if it drops further below 60 i would considering buying. MEdia is a good speculative play at this level but definitely dont bet your live savings here.

I want to speculate but too afraid of all the penny stocks so I speculate on high PE stocks like WCT with the view that PE valuation will reduce

No crows pushing property stocks in case you all havent noticed. That is why PE is low.

The critics of this counter is high PE. Otherwise, it has sufficient order book to keep them busy for the next 3 years assuming that Revenue stays at about 2b ( they have 6b+ jobs in hand now), reasonably good track record in construction and influential management with the Pavillion connection.

Is 28-30 PE high ? Yes it is. But it is temporary or going to be a recurring situation? Look at their historical performance except for 2016 which most companies didnt 'report healthy profits' due to various circumstances.. the average EPS is 14-15 cents ? If EPS bounces back to conservatively 10 cents this financial year 2017 would PE drop to 15 ?

Do you think for WCT to report a profit of 20M-30m a quarter based on a sales of 400-500m per quarter unreasonable ? If they report any higher PE will drop. Now remember WCT is mainly focusing on infrastructure / govt related jobs that 'reportedly have better margins'. You go figure.

You can buy low PE stocks but expect low PE stocks expected returns and capital gains, or you can buy high PE recovering stocks.

http://www.thestar.com.my/business/business-news/2017/10/09/suncon-wct-potential-candidates-in-johor-bus-rapid-transit-project/

I think it will continue to drop for a while as momentum hasnt stopped yet, so i think too soon to buy back if u want to get back in.

The biggest issue here is yes next quarter results from core operations will improve but no one knows what is really going on at Eastern Steel as we dont have enough disclosure here.

From another perspective, why did management choose to do a 100m+ impairment at the last quarter as these things dont happen overnight. You can impair over a period technically so why do it all last quarter? Is this a strategy for key shareholders to buy back cheap but i think funds will think twice to recover from the loss of confidence even if the next 2 quarters are good.

I heard there should be some outcome from Eastern Steel new shareholder soon.

Not that simple to just draw that conclusion when you dont know whats the margin and what is the amount that will be sub-contracted out.

Anyway look at the big picture, WCT already has order book for the next 3 years and you have potential upside from the 1.2b award from Meydan project still pending enforcement amongst other thing goodies coming.

If you think Sunway Con is better, then sell WCT buy Sunway Con tomorrow. I dont like the latter as i think its fully valued.

Nice story but to bet on property counter to take on M&A at this timing of the market.

Will large institution funds still invest in property counters at this juncture ? I heard quite the opposite

Tomorrow will be a big drop coz funds bought a fair bit of this stock and some of them have investment policies they have to follow, whether they like or believe in the company.

Despite what fundamentals you believe this counter has, this is likely scenario.

Iphone7 is back. Where was he was the price was on uptrend ?

Putting the impairment aside, everyone should have already known this quarter wouldnt be good coz their are reporting results the past 3-4 months where prices were unfavorable. From Aug/Sept should be good, so next quarter will be better for sure.

Yes I expected this to happened that's why I said earlier good riskless investment. Unless you don't have funds to convert.

It's easy for WCT mother to go up 10 to 20 cents a day coz its only about 10% gain.

Greatwarrants you seem to be one of the only few that understands that. That's why I say it's near riskless to me if u are prepared to convert.

And no one even is asking who is holding the bulk of WD.

Mostly speculators here

Good. The more it drops the more we should buy WD. It's cheap in comparison to mother share to gamble on upside. And what's the risk? Worst case convert to mother.

If you believe in long term of wct, this is a riskless investment

Power96 u holding WD or planning to buy

Coldinvestor is a trader. Not investor.

Desmond has an army of CF ppl and analyst working for him. You think he made a wrong decision taking into account his strong connections and synergy with the Pavillion / Malton group?

1.5 cent premium for WD. Im in

What i will say is big time business man who has real business and cashflow dont care of most of retail investors here. Too insignificant to make a difference unless your counter is really lowly traded and which is not the case here.

You are not digging into his pocket and wealth transfer is from secondary market

firehawk thats even worse. then she'll ask for a portion of his shares and he will lose control of the company

8899 your information is quite accurate. I heard somethin' similar earlier too. If you observe closely, everyday in the buy and sell queue the pass 2 weeks you can see that someone is taking advantage of the fact that TH has been selling and pushing WCT mother down to collect WCT WD cheap.

For a company that has so many jobs ( enough for the next 2-3 years ) and not enough funding, do you think they will let WCT WD expire or they want people to convert.

Logically the easiest most convincing way to make people convert is push WCT mother substantially higher than WD so that the discount is attractive enough to convert. If you own mother as well, its riskless profit for you to convert. But if your speculating then might as well go to casino and try your luck.

WE is obviously the safer option but seriously do you want to pay such a high premium for the same option at a higher exercise.

Do the math.

Accounting 101 answer. They are writing off intangible assets and they can do so at any time. They have almost completely written off the entire portion now.

BTW intangible assets do not affect NTA so no real effect anyway.

Taking away FX losses, they are near operating breakeven / small operating profit.

If you still don't understand how this works better sell. Uncle KKP is gonna make u sell everything back to him at a super cheap price coz no one pushing his shares. So how he's been doing this is he reports bad financials, gives u no dividends. See how much patience u have. Some have waited 3 to 5 years and given up.

Better run if u don't read and do your homework.

Another 10 contractors can sue them for 100m each for the same project and won't affect as they already won the arbritation award 1.2b under JV company

If u don't understand what that means please go google.

BTW they got the award 2 years ago and still pending enforcement after fighting for 6 years. You think the subcontractor case will affect any cashflow in the short term anyway ?

If you ask me, someone is trying to push down mothershare since they know TH is selling and collecting WD and WE.

As for the company, they can only be better from now on with impending REIT exercise, cashflow from the enforcement of 1.3b legal case they won, 5b plus order book. And its in their best interest to encourage conversion for capital purposes. Meaning they want to push mother.

Funny you should mention legal case will eat up 70% of profits. You must be forgetting the 1.3b arbitation they won against Meydan. They have the judgement pending enforcement.

This new case by subcontractors are related to the same project. Also, this a JV company so at worst case they are liable for half

Star article on update on WCT REIT approval, listing will be next year. Today news

If equity investment was so easy ( just using EPS to value stocks ), a lot of financial professionals would be out of job :-)

Well im sure some of you expected this. I remember someone mentioned that they have a fixed crack spread that is not affected by movement of oil price and later when ppl dig deeper there is a lot of inventory costs to consider as well.

If it was such a good business, why did Shell sell out at such a low price and why did a world class MNC like Shell lose money year after year ( if i remember correctly ) before this and now straight after change of ownership the company jumps into high profitability.

Dont forget they are probably paying >2 times interest costs on the refinancing ( Shell interest cost was libor + 0.7% and heng yuan is paying libor + 3.5% ) that should give you an idea of the difference in credit rating and risk

Yes, dont expect any dividends from this counter. China stocks can report all the profits they want and they can just wipe out everything with a capital impairment later.

Why worry mother share dropped 3 cents. That's less than 2%.

This is a construction counter. People dont look at just one quarter performance to analyze trends due to accounting treatment of cost and revenue recognition. People are buying into future valuation not current, thats why price goes up when a big project is secured i.e. future profits and potential dividends.

5b order book which should keep them busy without any new big project awardment to be announced. How is the margin ? Common business sense will tell you that if you have not enough jobs or cant get jobs you might lower margins to secure a deal. But when your have so many jobs at hand, you would only want to 'worker harder' if the margins are high else why bother. So if they do announce any more jobs do you think the margins will be high or low ?

WCT is a old name and respectable one in construction. There is a reason why they are traded a relatively high PE.

TH is just selling alot of stocks in general and EPF is buying most of what they are selling.

Why worry that WCT wont get any project. Their construction business has always been strong and orderbook has been consistent over the years.

If they get any of the large projects that people above mentioned, then i would assume that this is not replacement for diminishing jobs but additional on top of what they already have.

Things you can expect. Realization of the award from the race track Middle East case whereby they have 800m long term trade receivables ( not short term trade ) which they have already won judgement of the case ( Announcement earlier says 1.2b ). Anyone understand that this cashflows means ?

Potential deleveraging of chunky real estate assets via the Pavillion connection which will free up a lot of cash and also reduce interest payable by a significant chunk.

Depends of whether if you know who are the main shareholders. Most of them are institutional that already have the funds and prepared for this via their vote. You can see how many shareholders actually control this counter from the annual report.

Either that or they are selling down for cashflow to subscribe but i believe it will be fully subscribed issue.

Past 5 trading days consecutive downtrend. Why should price trend lower for issuance of CB and CC. Isnt the whole objective of issuing warrants to attract some capital from investors ? If yes a higher price would see conversion

And yes the company definitely needs as much funding as possible. Look at their borrowing rates, probably highest in the industry

Inventory loss is common and should be the same for all oil refining operations. The question we should be asking the past 2 quarters how much was the 'extra-ordinary gain on inventory'.

Obviously we cant just take crack spread and use this as the only input for profitability.

Super investor if you ask me, would have bought in cheap when HengYuan first reporting their Q4 turnaround profit of 200m+. Knowingly that there are not much shares in circulation, this is the best down to pare down some holdings when there is volume.

DPS more than EPS, not to mention EPS has been on a downtrend. Anyone curious how dividend will be sustainable ?

No idiot would bother privatizing this kind of business. Most related company business and niche insurance player at PE of 11-12x ? Motor insurance is supposedly one of the worst sectors to be in btw and is there any 'hidden gems' in this company ? Let silly retailers like us buy better.

http://www.thestar.com.my/business/business-news/2017/08/12/tune-protect-losing-appeal/