Posted by houseofordos > Jul 25, 2013 01:19 PM | Report Abuse X
ok... thanks for the explanation and correcting some of my terms... so for the -WA types of warrants, are these the ones that have to convert to mother share upon expiry ?

I think the -WA types can be converted to mother anytime if I m not mistaken.. this is why there is always a dilution effect on the earnings which needs to be accounted for if warrants are converted to mother and results in larger share base

ok... thanks for the explanation and correcting some of my terms... so for the -WA types of warrants, are these the ones that have to convert to mother share upon expiry ?
and then thre are also the put options (-Hxx).. i read that its suppose to hedge on the downside risk.. not really clear on that or at least how they work in KLSE.

haha.. dont worry about me... I wont blame anyone if I lose money.. sometimes learning also need to pay some tuition fees... actually i ve already made some profit following the analysis on Maybank-CW.. with proper risk management, should be OK la...

another ESOS listing tomorrow ? Believe the upmove will further capped
http://klse.i3investor.com/servlets/anpth/926284.jsp

KC, thanks. I dont think I m going to bet on CT.. haha too much risk for me... heart attack :)
For call warrants (european style), have you ever held them till settlement before ? Suppose warrant is in the money, does it mean that to realize my gain if I keep till settlement date, I have to convert all the warrants to mother by settlement date or lose everything ? Or do you normally sell before the settlement date ?

anyone looked at TM-CY ? Looks like the most attractive one

kc, I trust you... but be cool... just dont lose sleep and let it get to you... these kind of things is quite normal in forum... you dont see a person face to face, it is easier to throw accusations and belittle others... the more you respond and defend.. the more the agitator enjoys it.... unless of course you also enjoy to hentam back la :)

kc... understand your frustration... but what are the chances that you are going to get the "ghost" to apologize.. haha....

here we go again...

Company (MFCB) also does seem to be quite active buying back its shares. A large amount of its cash (CFFO) is used for this purpose. I m not sure if the rate of buy back is normal... could someone advise ?It could mean that management believes the price is undervalued.

hmmm... dont really get it... privatization offer is at RM2.1 but closing price toda is at RM2.01 (~4.4% discount). Why ?

yes... sure.. CBIP has more press right now and more analyst covering due to recent winning projects but why need to choose/switch between KFIMA or CBIP... both are good companies.. i m invested in both and I m sure KC is too...

sorry this is the correct link
http://www.thestar.com.my/Business/Business-News/2013/07/06/Sona-Petroleum-stokes-interest.aspx

Please check out the information here for more accuracy.. Got cornerstone investors and public and insitutional allocation is 78% (not 2% for public) (From startbiz)
http://www.thestar.com.my/Business/Business-News/2013/07/18/Sona-Petroleum-public-issue-oversubscribed.aspx

Sona Petroleum, which aims to eventually make the transition to an independent E&P company, has already secured commitments from six institutions both local and foreign as cornerstone investors, making it the first SPAC to do so.

They are Hong Leong Asset Management Bhd, Hong Kong-based hedge fund Segantii Capital and Davidson Kempner European Partners, along with the fund management houses of the three banks backing the listing: CIMB-Principal Asset Management Bhd, Kenanga Investors Bhd and RHB Investment Management Sdn Bhd.

Post-IPO, the management will hold 20% of the firm’s enlarged share base, the public and institutions 78% and initial investors 2%. The identities of the initial investors were not disclosed in the prospectus.

Also take note that AVAGO Tech is a major shareholder in this company.. basically a lot of their business comes from AVAGO and so future revenue will have some correlation to AVAGO's business prospects.

whats the tp ? Rm1.1 ?

quietly moving ? >50% in 5 days !

the s..t thing is I didnt manage to pick up the CO... aiyo... already up 17%

noby81@yahoo.com... many thanks

kc, i googled black scholes model for calculating warrant intrinsic value and the formula is rather complicated... do you have a spreadsheet that calculates this easily ?
http://bradley.bradley.edu/~arr/bsm/pg04.html

not sure how to determine some of those statistical inputs for the equation.

kc, please elaborate further on how IB manipulates the warrants or being the best market maker ?

Find these 2 Mudajaya warrants may be interesting

Mudajya-CP
Expiry :- 30/5/14
Ex price :- RM2.4
Ex ratio :- 2
Warrant price :- RM 0.2
Mother price : RM2.58
Premium :- 8.53%
Gearing :- 6.45

Scenario analysis
Mother change (%) -15.00% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00%
Mother share 2.19 2.32 2.45 2.58 2.71 2.84 2.97
Exercise price 2.40 2.40 2.40 2.40 2.40 2.40 2.40
Warrant change (%) -100% -100% -87.25% -55.00% -22.75% 9.50% 41.75%

MUDAJYA-CO
Expiry :- 30/1/14
Ex price :- RM2.6
Ex ratio :- 3
Warrant price :- RM 0.08
Mother price : RM2.58
Premium :- 10.08%
Gearing :- 10.75

MUDAJAYA-CO
Mother share price change (%) -15.00% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00%
Mother share 2.19 2.32 2.45 2.58 2.71 2.84 2.97 3.10
Exercise price 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60
Warrant price change (%) -100.00% -100.00% -100.00% -100.00% -54.58% -0.83% 52.92% 106.67%

I would punt on either one of these warrants due to low premium with more than 6 months to expiry and also since I have confidence in mother share...

Any inputs ? Thanks

DCF method to calculate HEVEABOARD intrinsic value


Discount rate :-10%
Projected growth for next 10 years - 5%
Terminal growth - 0%
Intrinsic value = 0.99
Margin of safety (22%)

Discount rate :-10%
Projected growth for next 10 years - 5%
Terminal growth - 3%
Intrinsic value = 1.41
Margin of safety (45%)

KC, all valid points... so, are u interested in hevea ? whats your intrinsic value estimate ?

KC, what you think about Heveaboard... manufacturer of particleboards

Good free cashflows but average ROE, ROTC and EV/EBIT. Based on 2012 annual report

PER=4.5
EV/EBIT=12.1
FCF/Rev = 10%
ROIC = 6%
ROE =7.4%
P/B = 0.34

Would you put more weight on FCF or the ROE before investing in a company ? Also when EV/EBIT is much higher than EV/EBITDA, this indicates a high depreciation right ? I would think this applies to asset heavy companies like industrial and telcos... One of the reasons why their cashflows look good too...

HupSeng which produces biscuits is a good consumer staple stock but a bit expensive right now. Its business is simple to understand, it has a strong balance sheet with no debts, strong cashflows and good dividend yield makes this a good defensive stock.

ROIC = 26.8%
EV/EBITDA = 11.8
PER =15.9
Earnings yield=6%
FCF/Rev =14%
Dividend yield=7%

Using discounted cashflow method of valuation
Growth 5%, terminal growth 3%, discount rate of 10%, the intrinsic value is around RM4.95 which is only 13% higher than current price of RM4.3.

If Hup Seng is able to maintain its strong cashflow growth (19% Y-oY), lets say growht of 10% for next 10 years with all other assumptions same then intrinsic value would be RM5.93 which presents a 30% margin of safety.

it takes a lot of time and effort to do research and post the information here.... much of the information shared by ooi tb, kc loh kcchong and hng33 are very useful and much appreciated and I ve learnt a lot since joining this forum.... entry and exit price is solely own decision..

kc you mentioned you hold some Mudajaya warrants ? Care to share which ones are worht punting ? I feel there is upside potential for this stock.

similarities with prolexus in terms of chart is striking...

time to wake up...

wow... goreng time

kc, you are right, I was just using the current price as a reference. The payoff should be 14.3% as what you mentioned assuming the share price of hapseng and warrant stays the same at expiry.

KC,

Price Ex-Price Ex-Ratio Expiry date Premium Gearing
CK 0.015 2.00 3.00 20/09/2013 2.8% 44.2

Check out this site
http://www.bursawave.com/stock-search/warrant/supermx-ck-cw-supermax-corporation-bhd-cimb-1237/

Ex-ratio = 2 , EX price =2.2.

How about Hapseng-CF ?

Hapseng-CF is trading at a discount of 2.26% to mother with 5 months to go before expiry. Based on chart, HAPSENG (mother) is moving up in a nice uptrend well supported by the 13d-EMA line. Below analysis shows a scenario on the effect of mother share movement to warrant

HAPSENG-CF (09/7/13)
Mother share 1.99
Exercise price 1.63
Warrant price 0.21
Exercise ratio 1.50
Gearing 6.32
Premium/Discount -2.26%

Mother share price change (%) -15.00% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00%
Mother share 1.69 1.79 1.89 1.99 2.09 2.19 2.29
Exercise price 1.63 1.63 1.63 1.63 1.63 1.63 1.63
Warrant price 0.04 0.11 0.17 0.21 0.31 0.37 0.44
Warrant price change (%) -80.48% -48.89% -17.30% 0.00% 45.87% 77.46% 109.05%


Would an underlying warrant always move up together with mother share ? Illiquidy is one issue, another is if a dividend payment is imminent, warrant holders would lose out because (i) they are not entitled to dividend (ii) mother share price typically corrects after ex-date for dividend and this will impact the warrant as well.

what about gadang ? Strong balance sheet and really good free cashflows recently

@kc many thanks for the feedback.. I did discount the 30m from the valuation analysis but you are right in saying the strong performance is only for this year.. sometimes this management credibility need to do more research and your feedback is much appreciated.

How about Keladi Maju ?
Property developer with projects mainly in Kedah as well as some business in palm oil upstream activities.

Based on 2013 annual report:-
• Earnings Yield = 26%
• ROIC = 19%

Using the magic formula, the effects of the one-off gains from re-measurement of associates recently were excluded and still showing good value ?

EV/EBIT=3.2
FCF/Rev = 15%
CFFO/NI=28%
Div yield = 1.9% (kind of poor)

Cash backing of RM0.16 per share
Net asset backing of RM0.32 per share

Looks like value buy for me ? Any comments ?

KC,
Just some feedback on your spreadsheet. I believe that for example shown for KFIMA the par value is RM1 hence no of shares (B53 in Table2 BS tab) =common stock. But for some stocks where par value is less than RM1, for in the case of Keladi Maju, then the number of shares = Common Stock/Par value. Took some time to figure that out cause I got like 10x the expected NTA initially using your spreadsheet in the original condition.

Dividend received = no of shares * 5% * RM0.1

correction no of shares = common stock / par value

How about Keladi Maju ?
Property developer with projects mainly in Kedah as well as some business in palm oil upstream activities.

Based on 2013 annual report:-
• Earnings Yield = 26%
• ROIC = 19%

Using the magic formula, the effects of the one-off gains from re-measurement of associates recently were excluded and still showing good value ?

EV/EBIT=3.2
FCF/Rev = 15%
CFFO/NI=28%
Div yield = 1.9% (kind of poor)

Cash backing of RM0.16 per share
Net asset backing of RM0.32 per share

Looks like value buy for me ? Any comments ?

KC,
Just some feedback on your spreadsheet. I believe that for example shown for KFIMA the par value is RM1 hence no of shares (B53 in Table2 BS tab) =common stock. But for some stocks where par value is less than RM1, for in the case of Keladi Maju, then the number of shares = Common Stock * Par value. Took some time to figure that out cause I got like 10x the expected NTA initially using your spreadsheet in the original condition.

still keeping some... tp berapa ?

take profit first !

WOW

kc, I like that idea ! haha...

KC, when deciding price to sell, do you rely on the intrinsic value or do you base on a certain target earnings yield based on magic formula above ?

What about EKSONS ? It looks undervalued and its mainly in the timber business (plywood) which could be see some recovery with the US housing market starting to recover.

Another company that meets the criteria is Willoglen MSC

EBIT = 18212
EV = 91947
Fixed assets=5193
Net working capital = 34405

Return on capital = 46%
Earnings yield = 19.8% (Based on share price of RM0.495)

Muar Ban Lee (Based on 2012 annual report)

EBIT = 17121
Enterprise value = 65952
Fixed assets = 17800
Net Working Capital =30148

Return on Capital = 35.7%
Earnings Yield = 26% (based on share price of RM1.12)

i enter order on Sat night at RM2.5 after the plunge.. manage to get it today surprisingly...

iafx, any news on this counter
picked up some at 0,45 some time back..

Posted by Frank Soweto > Jun 24, 2013 09:46 AM | Report Abuse

afternoon session will probably revert back to Friday prices before the plunge

do you mean that 30% is not the max it can go in 1 day ? I thought already limit up