CaoCao, the premium of Puncak's warrant used to be less than 0.10. Even with Puncak trading below 2.00 ex-special dividend, a premium of 0.22 with a maturity date within 2 1/2 years are rather high, well, at least to me (Puncak @ 2.73 and warrant @ 0.95) .

ivan9511, loan stock interests are only for those buying BJCorp loan stock (BJCORP-LD), NOT BJCorp (BJCORP) shares. BJCorp shareholders are only entitled to RM 0.01 per share end of each year for the past 2 years.

sudahkena, frankly, we have yet to know the number of warrants floated on Bursa upon the completion of conversion exercise. If there aren't many left, its easy to corner the market and control the price. Having said that, the reason for a maximum 0.15 per share premium is to account for 2 1/2 years of savings on RM 1 on conversion cost of warrants, nothing much. If Puncak share price responds well towards any business plan unveiled in coming months, it may not be worthwhile to buy warrant at such premiums. Of course, if Puncak share price barely responds for the next 2 1/2 years, surely the 0.15 could be worthwhile given the RM 1 conversion cost could be used for other investments yielding more than 5% return (of course, assuming one can make more than 5% in the market annually)

Received a reply from Rosely of CIMB, and was told net cash per share should be RM 3.15 post special dividend instead after update. Though, reverse engineering using his numbers, I can only come up with RM 2.30 post special dividend. Anyway, I suppose my derivation is a better reflection while still believing that there is a high possibility that quite a significant amount of sukuk will not be converted into shares.

I have written to Rosely of CIMB Research pertaining to his valuation of Puncak:

Dear Mr. Rosely,

I was reading an article dated Nov 24, 2015 on Puncak Niaga Holding Berhad (PNHB) that's written by you. In the article, you have mentioned that PNHB's fully diluted net cash shall be RM 1.81 post special dividend.

Based on the most recent quarter report, the following is what I have found:

(in thousands)
Current assets
Short-term investments 11,397
Cash and bank balances 392,150

Non-current liabilities
Loans and borrowings 179,850 (of which 141,537 is for convertible sukuk)

Current liabilities
Loans and borrowings 42,717

Its my understanding that there are approximately 33 millions warrants that have yet to be converted while the proceeds from selling Selangor water asset should be 1,554.3 millions (of which 1 million has been paid to PNHB.) In addition, the enlarged share base should be 534.554 millions.

Thus, before special dividend and post enlarged share base, I have come the following cash and cash equivalent of PNHB:

1,554.3 + 392.15 + 11.397 - (179.85 - 141.537(converted sukuk)) - 42.717 + 33 (converted warrants) = 1,909.817 millions

(OR, 1,898.42 millions if short-term investments are excluded)

And 1,375.263 millions post special dividend.

(OR, 1,363.866 millions if short-term investments are excluded)

Thus, net cash per share of PNHB shall come to RM 2.57 per share (1,375.263/534.554).

(OR, RM 2.55 per share - 1,363.866/534.554 if short-term investments are excluded)

The above net cash that I have concluded seems far off from what you have come up with. Would you kindly suggest as to where I have omitted or failed to realize?

Hopefully I will have further clarification from Rosely soon. Will let you guys know then.

Ong Lie Chin, glad that I can help.

Something puzzling me yesterday. There are more than 260,000 shares of warrants transacted yesterday, while there are more than 110,000 shares transacted on Monday. Assuming 50% changes hand within the same day or the next day, that would still mean at least 185,000 shares are stranded without the right for special dividends based on the Tricor requirement of receiving forms on the latest Nov 25 5:00 p.m.

Meanwhile, while ex-date is Dec 04, the entitlement date is actually Dec 08, meaning those holding Puncak shares on Dec 08 will still be entitled to special dividend. From past records, it should take 5 - 7 working days for conversion, meaning those holding warrants on Nov 30 (meaning after taking into account of T+3, those bought today should still have a chance for special dividend.)

Anyway, just found the traded warrants yesterday fishy and unfair to small shareholders!

annchua, no, but hng33 is familiar with kps. Unfortunately, somehow he is angry with some of us, hopefully its not me, and has since refused to share his thoughts. Kind of miss him, a good trader equipped with both technical and fundamental skills.

What I do know is that upon selling ABASS, KPS will be debt free, leaving SPLASH to make sure its cash rich.

fairnreasonable, thanks. Just that my stake in Puncak is significant, so I have spent much time analyzing it. Since it has been completed, no harm sharing while hoping certain things that I have missed out will be pointed by others.

Based on most recent quarter report, cash + short-term investment = 403.5 millions, short and long term debt = 222.5 millions, of which 141.5 million is convertible sukuk, with warrants of another 36 millions yet to be converted. Assuming all warrants and sukuk are converted, net cash per share shall be at least (403.5 - 222.5 + 141.5 + 36 + 1555.3)/532.5 = 3.59. If not all warrant/sukuk is converted, net cash per share shall be much high, which I believe should be the case. Thus, an assumption of net cash per share of at least 3.80 should be right.

sudahkena, ex-date, puncak should trade at ex-Puncak price - 1.00 + (0.05-0.15) range. Currently, Puncak is traded at 2.85, assuming this is the price before ex-date, warrant should trade around 0.90 - 1.00 range.

Haha... who cares? I am only waiting for special dividend now.

To any stock, any dividend of any kind will face a adjustment post dividend date... the bigger question is, how much will Puncak price rise post special dividend date, that's open to any guess

fainted, don't know who is buying those warrants at 1.52 with some queuing at 1.55, doubt there is sufficient time for conversion...

Tree21, yes, you should receive yours within this week if I were not wrong. For confirmation, you can always check with the registrar office. The contact is available on the Puncak announcement on the Bursa with regards to conversion of warrants.

ahbeng11, if you don't own the warrant now, its too late to convert already (registrar office needs to have the application by the latest Nov 25 before you are entitled to special dividend - or check with registrar office before buying). Remember, you need T+3 to get shares into your account, another day to prepare all paper work to have it sent to registrar office (a few more days of delay if your shares are parked under nominee in margin account.) Then, it would take registrar office another 5 - 7 working days to get those shares converted before mother shares appear in your account.

To those still owning warrants, it's better to have them converted than selling at this price. It's actually not difficult, just call up your broker and seek help. There is still time, so long you bought it on last Friday or earlier. To those with some experience, call the registrar office to learn more. It's a shame we small investors be corned by those professionals at this moment of time. Just sharing what I know and hope I have not annoyed anyone.

LHKOAY, no problem, so long it helps...

Warrant holders are not entitled to special dividend of RM1.00, so price of warrant will drop substantially if not converted. Those owning warrants, make sure to convert immediately. An example, currently Puncak is at 2.86. Assuming price is to remain the same at 2.86 right before ex-date, Puncak will trade at 1.86 ex-special dividend date (since RM1.00 is to be distributed end of December) and warrant should trade around +/- 0.86. BEWARE!!!

Actually, those buying warrants today may face the risk of not getting them converted...

actually, I sold Puncak for the past few days in exchange for warrants, giving me an arbitrage profit of 0.0424 (post expenses) per share with paired sold Puncak, purchased warrant. During the first batch of action, I have bought back only 92% of warrants when Puncak averaged 2.89. So, seeing warrants at 1.75 today triggered my risk appetite, knowing that my first batch of warrants are close to be converted, so I bought some at 1.75 again.

Felt so good, managed to buy some warrants @ 1.75 today for last round of conversion...

I do, today at 1.73-1.74 after selling mother at 2.82. Failed to buy at 1.72, fell so bad, sigh!

frankly, no market is bright right now in Malaysia unless its export-oriented. Rozali should really seriously consider liquidating Puncak and retires for the benefits of the rest of Puncak shareholders....

Rozali stated his intention to deal Puncak shares during closed period. Wonder if its due to warrant conversion, or that he intends to buy more Puncak shares?

smartly, think its somehow covered in point (1) and (2) that affect investors sentiment on Puncak. Any how, hopefully we will get a small rally closer to the ex-date and post ex-date...

Adam, not sure about others, but I am buying not due to just the special dividend, but its net tangible asset per share that's hugely in cash.

Based on its most recent quarter report, Puncak should have at least RM 3.60 per share of CASH, assuming all warrants and sukuk are converted into shares with an enlarged shares outstanding of 533 million shares to more than RM 4.00 per share of CASH, assuming 0 warrant/sukuk conversion. Of course, Puncak net cash per share should come in between RM 3.60 - RM 4.00. Aside from this, Puncak should have lands (Kuala Selangor along has 280 acres of land - and be remembered Ecoworld just bought over 1,000 acres there at over RM 1 million per acre!), water concession in China, and construction projects (profitable) and O&G business (huge losses, probably that's why UMW retired boss is brought in). These should carry a value of RM 1.00 - RM 1.25 per share.

The above valuation could be found if you read the most recent quarter report as well as prospectus of Selangor water asset disposal.

Most anal-yst report from major investment banks (think only CIMB values Puncak @ 3.40 and Kenanga @ 3.99 with the rest less than 3.20 per share) are not friendly at all, with all citing uncertainty about its future, i.e., what will be income generator! Surely, if one didn't do his/her independent analysis while relying on these anal-ysts to provide the basic, none would consider investing, given uncertainty and value per share of less than 3.20.

I have tried to come up with reasons why Puncak has not been able to perform despite water deal completion, special dividend announcement, and appointment of an experienced new head. These include:
(1) Few coverage with negative recommendations from most investment banks! A factor that can hardly be changed until a change in viewpoints.

(2) Over concern about its future prospect without realizing that the cash per share left alone is sufficient to cover future losses in O&G (cash of RM 2.60 at interest rate of 3% should generate about RM 40 million cash) and possibly irresponsible investment decision (possible but not highly likely, given Rozali himself owns over 40% of Puncak.)

(3) Concern of oversupply in new shares from warrant/sukuk conversion, which could be as high as 25% in addition to current shares outstanding. Quite frankly, I have overlooked this possibility when considering my investment in Puncak.

(4) Lack of major funds participation. Islamic Funds are not allowed to buy while those currently hold Puncak has to look into disposal given that Puncak no longer 'halal' (wonder if that the status could change in near future?!?). Meanwhile, EPF has been selling to less than 5% exposure, guess most funds prefer investing in stocks with 'bright' future with stories to tell.

Anyhow, I sincerely believe Puncak should at least be valued between 3.30 and 3.80, depending on market situation, while below RM 3.00 a sure hold and RM 3.00 - RM 3.30 disposable if a new investment opportunity arises.

adam, your logic is illogical at best. You said "ONLY money in your pocket is HOT". Before the special dividend announcement or the water deal completion, there is no certainty HOT in us, shareholders, or Puncak. Since water deal is completed, which is an assurance of 1.5553 billion cash to Puncak, Puncak share price rose from 2.5x to 2.8x, which is about 10% for HOT in Puncak's coffer. Then, when special dividend is announced, Puncak share price rose from 2.8x to 3.0x, and quickly fell to currently level of 2.8x. Wonder where is the HOT in shareholders as you said? Don't tell me 1 ringgit is not significant enough to be considered HOT...

Mine is a margin account, so brokerage firm does everything for me. My brokerage firm warns me to send conversion request the latest on Nov 17, not sure others though. If not using margin account, probably can convert another round, but very risky on the second round. So, if you are keen with conversion and would only start tomorrow, better check with your brokerage first if your account is margin and convert only once given window of opportunity is too thin right now.

roger, I intend to hold until after special dividend, so no difference. Plus, the conversion should take 2 weeks or less. I have done it several times last year.

Actually, I kind of like current scenario, with Puncak warrant at 1.06-1.07 less than Puncak. Last week, I managed to sell Puncak at an average of 2.904 and buying 8% less of warrants at 1.850 and have those warrants converted to Puncak. This is equivalent to selling my 8% of Puncak at 3.25. Intend to do one more round this coming Wednesday or Thursday if difference around 1.07-1.08.

think its concern for both warrants and sukuk conversion that would flood the market with over 120 million new shares... Guess its time for Puncak to announce share buy back, otherwise, we better hope those sukuk holders either don't convert or not selling converted shares... or, funds starting to buy.

ks55, may I know what do you mean by "balance 65% cash still worth more (according to some people)"? Are you suggesting balance 65% cash is 'actually' less than 1.85 per share?

something I found funny and would like to share:

While Puncak-WB is a cheaper entry to Puncak, given that conversion cost is RM 1.00 while the price differential between Puncak and its warrant is 1.06, something just isn't right. Its basically buying Puncak-WB at 1.82/1.83, going through the hassle to convert the warrant, only to get back the RM 1.00 that you have sent in for conversion as special dividend.

Though, Puncak and Rozali seem determined to force all warrant holders to convert or suffer the consequence of 'lost' special dividend. Meanwhile, Puncak hasn't announced if the bondholders will also face the same dilemma, convert to Puncak shares to enjoy RM 1 special dividend or facing the same fate of warrant holders, no reduction in exchange price, which is currently at 2.00 per share.

In addition, since Puncak has allocated 532.5 millions for special dividend, its actual payout will definitely be less than that. Reason being (1) 35.8 millions are actually 'contributed' by warrant holders and (2) not all bondholders will convert their bonds. I was wondering, even if bondholders were to convert their sukuk, would there be another round of dividend to clear the 532.5 millions or Puncak will merely hold on to these cash.

Sorry, it should be 5 days before Nov 25 rather than ex-date of special dividend, given that Puncak has announced earlier that conversion form must be received no later than Nov 25 5pm

for every Puncak-WB, you can convert it into one share of Puncak at a cost of 1.00. Its a slightly cheaper cost of entry for Puncak

currently,Puncak-WB is at 1.82, and the cost of converting into Puncak is 1.00. So, your cost of investment is 2.82 (pre-transaction cost), while Puncak is currently is trading at 2.89. The process of conversion should take approximately 7-10 working days. Ask your remisier on how to get it done safely and quickly. Plus, make sure not to buy anymore warrants for conversion at least 5 days before the ex-date of special dividend to be safe. Reason being so: You need 3 days after purchasing WB before sending in the request for conversion and it will take 1 day by express for the form to reach the registrar office.

timing, yes, before Dec 4, but cheaper if buy warrants and have them converted...

sudahkena, frankly, I have no clue right now. When hng33 is selling at 3.07-3.08, I was actually struggling if I should wait for 3.30 before start selling some, and the 'wait' idea keeps winning. I keep having trouble selling when I hold too long a share. Today, I have sold half of my Puncak to buy roughly the same amount of warrants, making a few thousands of profit. Now I will have to focus on converting my warrants to wait for special dividend.

Probably picture will be clearer once quarter result is announced...

I have been doing that today, I sold Puncak at 2.89/2.90 to buy warrants at 1.83. Nothing comparable to how much hng33 can make though...

superb99, if you intend to hold until dividend is paid and were waiting to buy at 2.85, you might as well buy warrant at 1.83/1.84 now and send it in for conversion.

hng33, ?!? I appreciate your analysis and your buy/sell call and enjoy reading when you make profit, but that doesn't mean I can't show my disappointment.

roger, I have actually made some profit in Puncak already. Its my Malaysia portfolio for this year that just break even (mainly because I sold my BJCorp and MNRB at loss to buy more Puncak this year).

hng33, I can't show my disappointment?!?

hng33, alas, not everyone is as sharp as you in trading... I, for example, have actually thought about selling at 3.07-3.08 too (that's before seeing your post), but didn't manage to make it, believing there is still some potential left and decide to keep.

http://www.theedgemarkets.com/my/article/focus-dynamics-puncak-niaga-rexit-do-destini-btm-jag-frontken-cypark-huat-lai?type=Corporate

Finally, edge saying Puncak showing positive momentum...

Anyway, will keep mine for the next few days, hoping that I am right and there is still more upside potential for Puncak. Nearly breakeven already, anyway

superb99, thought I saw somewhere hng33 had already bought back around 2.97 after selling at 3.07-3.08. Guess you are buying from someone else...

annchua, it may still reach 3.80 after a clearer picture about how Puncak will spend its billions cash and anal-ysts like what they see. I will definitely sell should anal-ysts like how Puncak spends its billions.

Real disappointed, indeed. What can I do but to hope the rise will continue? Sorry if my analysis had made any of you disappointed.

still holding, manage to breakeven for this year, a comforting news at the least...

cheoky, actually, I am concerned that we may not see the rise that we have been hoping for (to me, for example, between 0.40 - 0.60). Until now, except for star and 中国报, there is no news about Puncak declaring RM 1.00 special dividend...

hng33, never realize you are also interested in hwang...

hng33, how much upside do you think we may get?