Bone's analysis makes sense, assumption taken if the company is able to sell its mentioned land at psf rm 12, that would be whooping rm 0.64 cash per share.
However, would it be possible that there is no buyer of the land and the company keeps bleeding cash like no tomorrow? Company dies before able to sell off the land? Worse still, financing more from the bank based on the land's current value?
As the latest financial report, it posted borrowing of rm 103mil(rm 0.33/share), while cash at hand merely rm 3mil(rm 0.01/share). If one can borrow 70% of the land value from the bank, 70% of 237mil is 166mil, there is still having much more borrowing capacity.
Will the company borrow more money to support its business, or will the company sell of the land, pays off its debts? If it sell off the land, how much will investors get?
Assumption: Land sold value (rm 12 psf) = RM 237 mil = RM 0.64/share Debts = RM 103 mil = RM 0.33/share Excess cash after paying debts = 0.64 - 0.33 + 0.01 = RM 0.32/share
As you can see, if the company opts to sell off the land at the assumed price, its excess cash would be RM 0.32 per share, 23% higher than its current share price of 0.26.
From the above announcements, seems like the deal will be successful sooner or later. Shareholders of it, sit back, relax, take a sip of wine, enjoy the rides. Alex, enjoy your new car, haha~
Well written value seeker, simple and easy to understand.
Gkent, at price of 4.23, total equity & dividend growth at 31.25%, cash value per share at 23.48%, a high ROE company, is definitely a sound investment. The only step-backs are its low dividends yield (might due to its price being pushed up) and orderbook basis.
Don't blame KYY guys, he is good, who can donate so much money to a school and society today? His opinions are just a guidance, we can ignore it if we don't buy it, but we must respect that uncle. He contributed a lot to our society today.
Hi noobnnew, can't agree with you more. However, that book's formula is just a simple guidance. Preferance is upon our choices. Personally I think this formula should be applied on those who work for at least 5 years and above.
samsambank though engtex has equity growth of 14.42% and div growth 9.52%, total growth of 23.94%, its div payout ratio is consistently < 10%, and its dividend yield is less that bank fd interest 3.5%. Regardless of studying its net cash/debt position I will skip it.
wan7075, unless I could go back to the past and I would invest in it. I will skip it before and now.