Impairments and loss provisions 99

The patience game continues.

RM1b cash inflow net of interest payment a year, selling for just RM2.8b. You make back your capital in 3 years. Apa lagi mahu?

Ironically, my average purchase price is RM0.4775, right in the middle.

Both buyers and sellers are kedekut.

EPS a year is RM0.12. RM1 is target price lah at least.

Clearing out contra players who sold in the morning. In the afternoon, the uptrend should resume.

Last chance to buy sub-50sen will soon be gone.

100m units shareholders still don’t trust BAB and threw away their shares at below RM0.50.

Gray is in UK lah, stay close with family, part-holidaying, get daily report on Kraken.

Suspended

BAB’s non-executive directors are the most knowledgeable, senior, respected corporate personnel you can find in Malaysia about compliance and announcement requirements in Malaysia. It’s laughable many here keep complaining and demanding what’s unorthodox, unnecessary, impractical and impossible to be disclosed.

No additional announcements can remove that uncertainty.

The uncertainty is here to stay, we just have to ascribe our own fair value to BAB.

Nothing is happening differently from what’s announced by BAB. The ability and efforts to ramp up production in weeks are work in progress. Material financial impact is continuing each day till production volume has been fully restored to its previous excellent levels, which may or may not happen this year.

Average down a bit today, bringing my overall average purchase cost to RM0.4773.

The valuation can go lower if this issue goes unresolved for longer. Just grab more on the way down. When you think it has reached rock bottom, load much more. I have been buying from 0.515 to 0.45. So far, I have been wrong as my average cost is 0.485. Waiting for panic shareholders to throw down to 40-42sen. The good thing is I plan to average down all the way and happy to buy much more.

Armada is RM1.7b off its peak of RM0.73 achieved less than 2 months ago. Its long-time shareholders realised belatedly that a transformer issue can cost so much. Pain.

43.5. The supporters here are not supporting the price. Aiya

Next quarterly eps should be around RM0.09. This share is moving towards RM0.40.

Fraught with relatively complex issues since inception, just hope this issue will be solved and production resumes at meaningful levels within 3 months, if not already.
Otherwise, anything can happen when the cards start to fall: prolonged production outages, huge financial losses, contract termination by customer, impairment loss, share plunging to 30sen.

Are you sure they have achieved 50% capacity production? Any link for n this info?

Wah restarted and then re-stopped Kah?

Last 15 minutes, big sellers came back. The company will not issue any announcement till the transformer issue has been fully resolved and the production resumption has reached stability and begun an upward trajectory towards greater volume, and with negligible risk of halt again for any reasons.

One transformer costs billions. This bill shareholders have already paid via market cap collapse. I can see some forummers are engineers and couldn’t understand this.

BAB’s non-executive directors are all very senior and highly experienced, and will ensure full compliance with disclosure requirements.

Precisely because the impact is extremely material that BAB cannot issue any further guidance on this incident till the issue has been fully resolved and production resumes apace. That will take weeks as guided by the announcement.
Suffice to say that it’s very costly, may result in impairment loss, and may even cause prolonged production outage since many remediation efforts all failed. Quarterly results will show the damage come Aug and Nov and even Dec 23.

BAB’s announcement was concise, complete and complies with all regulatory requirements.

One bunch of very pricey mat salleh are running BAB. When they deliver consistently, it’s ok. But when they allow transformer failure to wipe off billions in market cap of BAB, the shareholders have to be more activist.

Moral d the story: One transformer is worth billions.

Failure of transformers since 20 May. Repeated remediation attempts failed. Alternative solutions didn’t work either. Heads must roll over this incident, as precautions and critical spare parts should have been in place to deal with these kinds of incidents.

No announcement. No news is bad news.

Armada’s past earnings record had been in turmoil for donkey years till two years ago when we began seeing stability. Market is now pricing in possibilities of impairment losses creeping back in especially for financial year end 2023.

Bad job by ceo. If managed well, BAB can fetch RM1. Buy now for those who believe, while unbelievers de-risk.

Oh thx

Anyone who has studied BAB in details can share some insight as to whether it still has idle assets for rent currently, which will potentially generate new chartered rental income stream in future? Those assets already rented out over their useful lives have been reclassified into Finance lease receivable. But in their PPE, there’s still billions sitting there. Anything in there that’s not support assets, but available for letting out?

If lucky, BAB would announce next Monday morning that production has resumed on a phased basis.

BA can only make the next announcement when production has been restarted on phased basis. It won’t be so soon. Take the current depressed price to accumulate, average down, if you are confident this issue will not prolong beyond 2-3 months. Price will not recover beyond 55 even after production restart as market is gonna price in possible recurrence of similarly serious production outage in future. Confidence will come back but only slowly and in 6 months, we should see the share price touch 60 sens again, assuming no prolongation of this issue beyond 2-3 months.

It’s a matter of weeks.

That the issue arose even before AGM and till now remains unresolved is bad. It’s normal to stop for 2-3 weeks due to unexpected production outage and to bring forward future maintenance work in that period. This normally doesn’t entail bursa announcement.
Now we know this issue will b around for a while as alternative solutions, which may compromise output, are being considered. Management is looking at weeks of shut-in. It’s safe to assume loss of revenue for 2 months and some capex. All-in, if the final damage comes within RM300m, it’s a blessing enough.

Enquest is field operator, getting paid like consultants. The more problems, and the more complex those problems are, the more they get paid.

From 73sen to 45sen.

45.5. Wow

Hope it drops to 45sen. Boleh sapu

Just buy 5% of your total planned purchase every time the price drops half a sen. Sure boleh make some money.

Kalau 40sen, boleh all in. Haha

1 faulty transformer caused 20% loss of market cap. It is way too much. It will close not more than 10% down today.

No insurance for loss of income?

The market has spoken.
Capital A is roughly fairly valued at rm3.2b even when it has rm9.4b net liabilities, implying an enterprise value of rm12.6b.
Aax is valued by market currently at rm0.7b.
For capital A to exit pn17, No matter how capital A will settle with its lenders and creditors and no matter how aax share price will evolve, aax need to issue around rm12b worth of new shares.

Wrong. Because capital A liabilities are not forgiven. Net liabilities totalled RM9.3b, mostly overdue.
A scenario could b like this:
They will have to b paid partially by capital A shareholders via rights issue during regularisation scheme. The remainder says RM6b will b transferred to AAX. If capital A is valued at RM12b minus its net liabilities of RM6b, AAX will have to issue AAX shares worth RM6b to capital A shareholders. AAX then has 0.41b plus 3.3b (=6b/rm1.8 assumed fair price of aax) paid up shares in issue. Post-regularisation, AAX will trade at rm1.8 still but with RM6b net liabilities on aax books.
Another likelier scenario:
To exit pn17, net liabilities must disappear. Therefore lenders and creditors of capital A will likely b partially paid and partially converted into equity. Capital A will b worth rm12b but with zero net liabilities. AAX will need to issue 6.66b new shares to acquire aviation biz of capital A. Enlarged shares in issue of aax will b 7.1b units. For rm2b net profits a year, eps will b 28sen a year post regularisation.