If Penta converted all their 176.6 million ICULS(2%) to ord shares on 10.06.2016 and their name does not appear in the list of the Top 30 Shareholders as at 29.07.2016 in AR2016, it does not necessarily mean that they have disposed off all their shares during the period in between.

They could have parked the shares in, say, 10 accounts with several brokerages so that they become virtually invisible (the smallest account in Top 30 Shareholders had only 29.47 million shares). The total holdings to start with was not substantial either being less than 5% of total BJCorp issued. We can only make intelligent guesswork about what could have been going on.

I still hold AirAsia (53%), BJCorp (32%) and Evergreen(15%). Stocks 70% and cash 30%. Was holding Hevea and Supermax until recently.

I hold mostly good fundamental stocks with upsides imo which have not materialised yet. What I plan to do is premised on a Trump win which I believe is a preferred outcome for USA and the world in the longer run because I think he will reset the system on a re-configured footing to enable healing of economies and improved relationships between nations.

However, because he is the 'lower' people's choice and not the establishment's, it is more likely to trigger a backlash from the establishment which includes the Wall Street and the community of funds who may lead a market selldown everywhere, perhaps for a short time only after which the markets recover. Hence, opportunitues to buy back with profits.

If things turnout more severe and, God forbid, spiral down into a prolonged market correction, then anyone who reads the signs correctly will stay on the sideline and be spared the deeper pain.

I dont want to be a wet blanket to anyone.

On top of the domestic problems facing us, I also worry about the many uncertain factors outside Malaysia like the US election, US & Nato provocations against Russia, veiled US threats against China, EU banks troubles, post-Brexit transition period, Fed action in near term, to name a few ... all of which may wear down confidence in the world markets and turn sentiments super bearish in a jiffy.

I have sold 30% of my porforlio stocks in the past few days but undecided on how much more to sell before the US Presidential Election on 8 Nov. Although it appears that Clinton has an almost unassailable lead over Trump now, with most of the liberal media biased, and women and ethnic minorities cool against him, I am pivoting on a strong "back from the brink" Trump win.

A Trump win will relieve the tension along the Russian border with Europe and generally with US, but because the establishment, Wall Street and the elites are riding on Clinton, such a shock can precipitate meltdowns in world markets if kneejerk reactions go awry and uncontrollable.

I want to be able to pick up stocks come Nov and Dec if opportunities arise.

It is very prudent of TF to time the closing of the AAC deal and the drawdown of his private loan to be at a time when the Ringgit is weakest circa 2016 year end to maximise sale proceeds from AAC in Ringgit term and minimise loan burden in USD term.

The Ringgit closed at 4.0315 and 4.1355 against the Dollar on 30th June and 30th September respectively this year based on BNM forex rates at 1700Hrs closing records. Therefore there will be an impairment loss of about 2.5148% on the 42% of unhedged portion of AA's USD loans which were reportedly standing at MYR9.26 billion as at 30th June 2016. Changes in the loans total amount are not reflected since there should have been pay downs and new loans taken in the 3Q16. This unrealised forex loss will be around MYR98 million in 3Q16.

However looking 2Q16 result details, AA made MYR122 million in Forward Forex Contracts. Since conditions had been similar in 2Q16 and 3Q16, they could have repeated another wonderful gain to offset the impairment again.

The average forex rate for the 2Q16 and 3Q16 were 4.0067576 and 4.0506161 respectively, a weakening of around 1.08276% and therefore a slight increase in operational expenses. I notice the opex wwere higher than 1Q16

I am no expert so don't take my word for it.

http://finance.yahoo.com/news/oil-rebound-never-happens-210000064.html

Agreed. TF with his AA family must take on the role of 'guardian of low cost with no-frills air travel' to fight against all dark forces threatening this lifestyle which has brought so much joy to many after being 'fiscally' enabled to fly more frequently.

Market has already discounted AA's price for the dilution since the shareholders approved the 559m new shares subscription to be issued.

It wouldn't be a bad idea to ipo AAC on the Singapore or Hong Kong Stock Exchange and let AA's shareholders participate in the listing with rights to the new shares instead of a special dividend.

A public listing can provide an array of different options to reward TF, investors and ikan billis' while retaining majority control and ownership of AAC which can still be sold at anytime later when it has grown much bigger in line with AA's expansion plans and indeed the region's aviation industry.

AAC appears to be in good hands. To divest now may be a bit premature, afterall the unit is still growing rapidly, healthily and yet to reach its prime.

While JPMorgan, the IB's analyst is calling for a Sell with a TP of $2.50, JPMorgan, the investor may be accumulating more AA shares through HSBC Nominees (Asing) accounts.

The concerns about associates' performances and intense competition raised by the analyst go against the reassurances that TF has given us. It is up to you to place the weighting on who to rely on more. Concerns about forex fluctuation are just part of the daily business running of an airline which are well managed within AA. Disposal of AAC completely may reduce the net profit by $300m annually but if the whole proceeds are used to retire borrowings, the interest costs will be reduced by about $240m and because of the improved balance sheet, the company will be re-rated with a higher PER. Alternatively, the cash can be returned to shareholders in which case it is capital back in the pocket first.

I rather hold tightly to my stocks in hand than be worried by others' misgivings.

Looks like JPMorgan Chase Bank is quite firmly invested in this counter. From what we can see in the 2014 and 2015 annual reports, listed under the Top 30 Largest Shareholders were;

As @18March2016 (2015AR) - Total 3.78% seen in 3 of the Top 30 ACs
9) HSBC Nominees (Asing) S/B - Exempt An for JPMorgan Chase Bank, National Association (TAIWAN) - 40,754,500 (1.46%)
11) HSBC Nominees (Asing) S/B - Exempt An for JPMorgan Chase Bank, National Association (U.K.) - 38,801,117 (1.39%)
15) HSBC Nominees (Asing) S/B - Exempt An for JPMorgan Chase Bank, National Association (U.S.A.) - 25,891,887 (0.93%)

As @17April2015 (2014AR) - Total 3.27% seen in 4 of the Top 30 ACs
16) HSBC Nominees (Asing) S/B - Exempt An for JPMorgan Chase Bank, National Association (U.K.) - 31,690,317 (1.14%)
26) HSBC Nominees (Asing) S/B - Exempt An for JPMorgan Chase Bank, National Association (Australia) - 21,890,770 (0.79%)
29) HSBC Nominees (Asing) S/B - Exempt An for JPMorgan Chase Bank, National Association (U.S.A.) - 18,712,115 (0.69%)
30) HSBC Nominees (Asing) S/B - Exempt An for JPMorgan Chase Bank, National Association (Rep of China) - 18,116,700 (0.65%)

The number of shares actually increased to 105,447,504 in March 2016 from 90,409,902 in April 2015 even though their Australia based holding account disappeared from the latest list of the Top 30 Largest Shareholders.

JPMorgan Chase Bank is one of the big four banks in the USA and operates as a multi-national corporation with total assets worth more than USD2.4 trillion. They probably yawned though the whole period when AA was trending down and eventually crashed to MYR0.765 last year before recovering to the present level.

2.97 Gapped up close. Announcement tomorrow?

When asked what AA will do with the money from the divestment of AAC during an interview with The Edge (reported in the current issue), TF quipped that he 'may buy an airline with it'.

Now, I wonder if he was speaking in jest or maybe in truth in a veiled manner. Is there an airline up for graps anywhere in North Asia presently? This might tie in with his dream of an AA North Asia and a HK listing?

Still good when closing price stays above the SMA50 trending line, I suppose.

Since Feb 29 this year, the price has always closed above the SMA50 although the intra-day low price poked through on two days being yesterday and the day before that.

Sep 06: SMA50 2.865; Low 2.830; Close 2.860; BollB 3.302 3.010 2.718

Sep 07: SMA50 2.871; Low 2.840; Close 2.920; BollB 3.303 3.009 2.715

Sep 08: SMA50 2.879; Low 2.900; Close 2.940; BollB 3.303 3.009 2.715

The up channel looks unwavering. Today, the Momentum(14) and RSI(14) are at their lowest points for the whole period since Feb 29.

By virtue of being a long term investor in a particular counter, you would also be a 'stockist' of that counter's shares. You will therefore be able to 'short' the stocks that you own without having to go through RSS system and being bound by rules.

When you short a stock, it means you have the intention to buy back your shorts and the purpose is to make money in the completed process.

You won't influence the market trend unless you are a sizeable substantial shareholder but you may make some money by selling first and buying back at lower prices if you call a counter's downturn correctly.

I suspect the invisible epf has been selling their remaining stocks into the market this afternoon. We shall have to put up with this annoyance for a while yet.

Posted by ignissimia > Aug 27, 2016 12:59 PM | Report Abuse X

I am quite certain the 2Q16 results will not disappoint the market. If there is any cause for alarm, usually the practice is to publicly issue a timely earnings warning prior to a quarterly report.

Tony very recently stated in a presentation to analysts that AA is undervalued at current prices and that a fairer price should be at least RM6.

I am bullish about AA and their future plans.

The market is spooked by AAX's 2Q16 PBT of -$9.23 million, dragged into the red by forex losses even though Air Asia is very different from AAX.

Yesterday, the operator and some stockists were probably having a field time shorting and squaring off in the market while many 8 sold off their open and long positions. This morning, we continue to see a selldown including probably a T4 10am forced selling rout touching 2.83.

The weakness may persist for a few more days until the release of 2Q16 earnings report depending on how the market perceive the picture.

I think it should be good to buy in at the lower levels. I lost my patience waiting for this correction and ended buying some at 3.13 and 3.10 but will try to buy more nearer the 2.80 level. I suspect there will be a few more forced selling routs to come.

When the 559m new shares subscription are issued, TF will be able to defend AA and prevent these shark funds from putting AA's price through such gyrations. Should be anytime now, 3rd Quarter.

Cast iron support @2.89

There are 101,838,374 outstanding Hevea-WB units that can be converted to new ordinary shares at 25c apiece which effectively will dilute existing ordinary shareholders' earnings, NAB, dividends, rights and voting power.

Before the ord shares were split 4 ways each, the warrants were floating below 20c most of the time prior to April 2013 and gradually moving up to 84c by the end of 2014. The main shareholders would have probably mopped up most of these warrants at low prices. Remember the adjusted costs of their warrants have been quartered too.

53 Substantial shareholders of warrants listed in the 2013AR held 67.5% of the original 42,666,666 units as at 25 Apr 2014. The 2014AR says 50 substantial shareholders owned 71.48% as at 22 Apr 2015. The 2015AR says 102 substantial shareholders owned 86.65% of the new 119,938,474 outstanding units as at 30 Mar 2016. Make what you can of this info.

At the time of issue of the new warrants consequent of the ord shares split, there were 159,797,864 units altogether meaning 57,959,490 units have been converted up to now, in a period of roughly a year.

If I were a holder of any warrants, I would convert them to ord shares to enjoy the full benefits owned by them. If I own the mother shares and am short of funds, I would sell existing ord shares to convert 4 warrants for each that I sell, with spare cash left over and still netting 3 ord shares in hand to receive the annual dividends which can be 5c or more per share for FY16 based on current levels of outstanding ord shares. The dilutive impacts deepen as more warrants are converted though.

I imagine there must be many shareholders choosing to upgrade their positions by selling ord shares to finance their conversions of warrants which may explain why the Hevea shares have been mired in limbo, shackled as buyers are marginally overwhelmed by sellers. If the main shareholders are doing that discreetly, then potentially up to 25+ million mother shares are still in line to be disposed in a worst scenario.

So patience is required while we wait and hopefully Hevea performs better than expected so that there is a bigger cake to be shared by more stakeholders. If the boss is too comfortable or naughty, the wait may turn lengthy and the share price may even trend lower.

Wow flying agsin, never let us down. How sweet.

The Trailing Twelve Months earnings up to 1Q16 is $80.119 million and total number of shares issued is 461.386 million. The EPS is 17.36c and the PER is 6.91 based on last trading session's closing price of $1.20.

Total long and short term borrowings were approximately $13.2m as at 31.03.2016 against equity of $368.91m and cash of $92.46m. Dividend policy of paying out a minimum of 30% of earnings and expected full year earnings for FY16 of $80m or more.

Good stock to accumulate.

Agreed. Great.

Recently I had suggested on 2 occasions how much AA could be worth based on PE factor of 9 times the yearly earnings and I purposely did not take out the forex gains and impairment losses of long term Loans from the earnings as is the normal practice. I asked myself how else could the ramifications of such significant ups and downs in assets value be reflected in the valuation process especially when they impact the income statement too, sometimes overwhelmingly. After pondering over the last few days, I have come to terms with the problem. Core earnings rule. But you can take cognizance of these non-cash changes in assets value and reported earnings, and make the necessary adjustments to the valuation figure to address any pertinent concern especially future cash flow and profits.

On a side note about future dividends, since 2013 AA has a policy to pay shareholders up to 20% of the net core earnings yearly. Therefore for FY16 we may receive something like 9.5c a share in dividends.

The estimated 1H16 earnings (1Q actual) can already underpin a fair valuation of over RM3 per share based on an enlarged share base of 3.342 billion units viz. $(877+300)/3342 x 9 = $3.17.

A quick glance over the latest released Operating Statistics report tells of marked improvements at most fronts YoY but on comparing them QoQ, the statistics are fairly close except for IAA. Go through the points below to judge for yourselves what to expect in the 2Q16 report.

The following are salient points between 1Q and 2Q;

1. Passengers carried by MAA in 1Q and 2Q are 6.48m and 6.55m respectively, an increase of 1.01%.

2. Passengers carried by TAA in 1Q and 2Q are 4.37m and 4.17m respectively, a decrease of 4.58%.

3. Passengers carried by IAA in 1Q and 2Q are 1.17m and 1.66m respectively, an increase of 41.88%.

4. Passengers carried by PAA in 1Q and 2Q are 0.97m and 1.01m respectively, a decrease of 4.12%.

5. Passengers carried by AAI in 1Q and 2Q are 538,800 and 533,050 respectively, a decrease of 1.07%.

6. The Ringgit on average was 4 to 5% stronger against the Dollar in 2Q compared to 1Q therefore resulting in slightly cheaper operational expenses of which 70% are denominated in USD.

7. Jet fuel averaged about USD56 in 2Q and USD44 in 1Q. Perhaps 1.7 million barrels were consumed in 2Q, 75% hedged. It appears that it wouldn't have mattered much whether fuel was hedged or not in 2Q because hedged and average spot prices turn out fairly even.

The average jet fuel prices and relative average levels of exchange rates for the two quarters are based on my rough estimates only which I arrived at by visually guaging the relevant graphic statistics records.

8. The Ringgit closed against the Dollar at 3.8995 on 31 March and 4.0288 on 30 April, respectively, a drop of 3.31% QoQ. So there will be a non-cash impairment of up to RM120m based on the 39% unhedged portion of up to RM9.3b of USD loans (other forex impacts not considered).

Basically, I see the ups and downs cancelling off each other for a neutral 2Q operation. So put simply, my estimate for 2Q earnings is $(877 - 464 - 120)m = $293m, say around $300m.

Congrats everyone. It is quite touching reaching where we are today. so many have kept the faith. But it isn't over yet and the journey continues on because there are more to reap ahead.

There should be a re-rating in the near future with more than RM1 billion new capital coming in very soon.

The reality is that with his 44.68% combined direct and indirect stakes in BJCorp, VT is in a very comfortable position as far as control of The company is concerned. If he has not used any major portion of his stakes as securities tied to borrowings, the price can drift down to as much as it can for all he cares. In such a hypothetical situation, he will have many options to exploit it to his advantage.

Therefore, the more loaded he is, in cash or kind, the more dangerous he is to the minority shareholders.

You mean there is another real role apart from the one announced?

I am surprised at the level of confusion some people still have about BJCorp's role in the computerised lottery business at this juncture of time.

Typo correction for an earlier post..


For smaller counters and less endowed operators, an off-market transaction like this could be a precursor indicative of an imminent stir-fry project ahead. But for someone in VT's league, hardly so.

For smaller counters and less endowed operators, an off-market transaction like this could a precursor indicative of an imminent stir-fry project ahead. But for someone in VT's league, hardly so.

You should be able to access info data about off-market deals on your trading platform under MARKET/DIRECT BUSINESS TRANSACTIONS HISTORY or OFF-MARKET TRANSACTIONS depending on which platform you are in.

35 Million shares@33c each, if that means anything.

Posted by ignissimia > Jul 27, 2016 06:15 PM | Report Abuse X

35 million shares changed hands off market yesterday. Something brewing?


Posted by abv8888 > Jul 29, 2016 06:23 PM | Report Abuse

something wrong le......VT Disposed : 26 Jul 2016 :Total 35,000,000 . ..But the day Total volume only 6.14m only .

On the contrary, I am holding and still buying this undervalued stock.

I mean that as probably AA has done its hedges to cover the next 12 months. I expect oil prices to be low for years from now.

AA has hedged 75% of the rest of the year's budgeted fuel consumption (I dont know the average hedged price, perhaps USD55) as stated in 1Q16 report. Historically, they had never taken a hedge with an option at a premium which allows you to buy at spot price if that is better. Therefore AA will be losing out on potential savings as the price of fuel goes lower and stay low possibly into the middle of 2017.

My take for 2Q16 results ... give or take $300 million. Still a good result, I think.

Oil is heading lower and will stay low for at least 2 years and chances are that it is likely to be staying low beyond that too. Shale oil producers are able to hedge their selling price for 24 months to ensure stable cashflow from their operations in case of another protracted price squeeze.

35 million shares changed hands off market yesterday. Something brewing?

All the paper shuffling only make sense if the price of BJCorp is going up above $1.

Lotto NZ has been running for over 27 years. Today they operate a retail network of 1360 lottery outlets offering several computerised lottery games. You can buy tickets at the outlets or online. Turnover is about NZD1 billion a year with NZD200+ profits. NZ has a population of about 4.5 million. The Lotto Powerball and Strike contribute more than 60% of the total turnover indicating 1 or 2 games will always be especially popular. Read following to understand an established lottery business.

https://www.google.com/search?q=nz+lotto+annual+report&oq=nz+lotto+anmua&aqs=chrome.1.69i57j0.15618j0j4&client=ms-android-samsung&sourceid=chrome-mobile&ie=UTF-8

kahhoeng, I understand what you are saying. No, I have been neither conservative nor over-optimistic, and I have only interpreted the info as given in the news and made projections purely based on that alone. I have not tried to second guess whether the reported info is accurate or not because that would be a bit reproachful. I have inserted enough caveats in my posting so readers would have understood that the projections are not to be taken rigidly. But I have not pretended to show that I know how to temper the projections to better reflect what would be a more realistic set of figures to account for all the disparities between the plural terminals' performances. That can be done when more info comes to light.

kahhoeng, there is only one game to play at the terminal and the news piece says the number of tickets sold everyday averages 3000 per day. So regardless of how many draws there are in a week, it sells 3000 tivkets a say.

The terminal near the supermarket reported only is one sample although another terminal elsewhere is also reported to be doing a similar brisk business.

In any case, MYR195,300 worth of ticket sales a month only earn MYR10,742 of commissions a month. That is gross income for the agent and need to cover at least 2 or 4 dedicated employees' wages to man the 15-hr day, 7 dats a week, rentals, capital costs, utes, etc2. This is probably the star performer of the first 800 terminals.

Terminal open time is between 6 am till 9 pm, 15 hours daily.

Average number of tickets sold is 200 per hour or more than 3 per minute. Staggering or piece of cake?

Based the news report, the ticket counter (terminal) near the Van Lang (Go Vap) supermarket is selling an average of 3000 tickets costing VND10,000 each daily during the first 5 days. The number is growing.

1MYR ~ VND4,610. Ticket price is equivalent to ~ MYR2.17.

Therefore, present ticket sales per month is 3000 x 30 x MYR2.17 per terminal OR MYR195,300/Month/Terminal.

Based on this terminal, total ticket sales for 800 terminals will be around MYR1,874,880,000 per year.

For 3,600 terminals, the total ticket sales will be MYR8,436,960,000 per year.

For 10,000 terminals, the total ticket sales will be MYR23,436,000,000 per year.

A terminal operated by an agent takes a commission cut of between 5 to 6% of ticket sales.

Of course terminals perform differently location from location. Some may do a lot better and some a lot worse, and these are early days still.

BJCorp and BJToto have 40.8% and 10.2% beneficiary shares respectively of the above business.

Roller coaster ride is starting?