Operating cash flow of RM350m a year, conservatively speaking, selling now for RM930m. Ridiculously low. Big trust deficit by the market over the management. Fair value is around 4-5 times of operating cash flow, conservatively speaking, which translates into around RM1.65 a share. What a joke because at the current market price, investors are essentially expecting the management will do some hanky panky again.
So far so good. Selling down offers better value for prospective buyers. One question mark remains: management dubious integrity, at least historically speaking. This market is currently pricing it at 50% of its fair value.
84m shares sell-off probably will get digested between 75-85sen in coming 1.5 months. Surely they are not happy with the controlling shareholders, likely due to the trust-deficit issue, especially as their share sell-off came on the heel of the recent RM52m related party transaction. It’s a red flag and controlling shareholders need to do stop any hanky-panky deals.
This company operates in two booming sectors: oil and palm oil. It seems to have pricing power and able to maintain EPS of at least RM0.12 a year, going forward. The company is in a position to increase dividend to RM0.08 a year. The fair value of this company lies around RM1.20. Attractive price to enter currently.
I guess there are about 10m esos unexercised. After exercise, grantees could sell for quick and handsome profits. The bigger issue may b the yearly RM10m director remuneration. 3 rather-senior directors may need to slowly hand over to next generation so the company continues to grow at good pace.
This company has no competitor in its market. The industry is flying, with continual replenishments and additions of ever-more sophisticated gaming machines after MCO. This company will fly with the industry.
3i has swallowed bitter pills of Dlady, for not selling at RM60. But he dressed his mistake up by measuring instead a 12-year positive return from Dlady, for his own comfort, as part of his long term investment strategy.
Creditors don’t mind putting the company under receivership, as they, especially the aircraft suppliers, are muscular financially and certainly eyeing Tony’s Airasia licence, which they can take over via their own local proxy.
Whether or not Tony and team can submit a regularisation plan or not depends on the various creditors and lenders. If they say no, nothing will happen till they are satisfied. The terms of payment rescheduling can be very painful to shareholders of Capital A and AAX.
No research house covers this stock and gives any target price. If I remember correctly, a few years back, there was once the company suddenly took out a few hundreds millions loan and then the money went to receivables. Ever since then, I dared not consider this company for investment. It’s not clear where they do the oil packing based on the property list in annual report.
One year cash inflow after servicing interest is RM1b. This interest will diminish over time if borrowings continue to be paid down and there will be other new income streams from new FPSOs, but this may be offset by occasional material setbacks like the current Kraken issues. Use a PE of 10, you get RM10b. Minus net debt of RM4.5b, you get RM5.5b or RM0.93 a share. Currently, market discount 49% for you.
TTB’s main objective is to prolong his job that comes with handsome remunerations for as long as possible. It’s not to return as much money as possible to all shareholders as soon as possible. He uses excuses like low risks, prudent management, to hide his competence, without avail. When the fund is due to close shop and return the money to its shareholders? TTB can use his own money to make or lose money, and release this fund shareholders who are caught or imprisoned like JJPTR scheme.
10-15 years ago, Dlady doubled in price every 5 years to RM30 a share. Then 3i said he would hold Dlady as it would double again to RM60, latest by 5 years ago. Today, 10 years have passed and Dlady didn’t rise to RM120, and settle at RM21 instead. 10 years of opportunity cost gone, plus RM9 losss.
RM100m operating cash inflow for 2023. If sustainable as seems likely given the explosion of IR, one may use a multiple of 10, and then add back the RM100m cash already in hand, you get RM1.1b. This share can still increase 100% from the current level.
Digesting some sales by contra fellows. Meanwhile, some see the target price as 54 sen, not much upside from the current level, so they sold some first. For long term holders, just keep buying loh, no issue.
Directors, executives or otherwise, are controlled by major shareholders. Auditors will catch any fictitious transactions which normally become apparent only when they have grown too big. Then big loss will be reported in accounts as impairment loss. Minority shareholders voiced concerns, and SC may issue fines which will be paid for using company’s money which belong to shareholders. Then the company gets delisted, and shareholders lose 100% of their investment. This is how the story typically ends in Msia.
Integrity, transparency, or even illegality issues here. Past profits turned into impairments over time, and not into cash. Tenaga and government agencies are best paymasters supposedly and many shareholders got cheated.