Based on recent market activity todate, the market is valuing SONA mother to be more than RM1.0.

Salcon management had indicated that Salcon Earnings will surge in 2014....

Market will decide the value and how much will the PE multiple be for Instacom...

As an indicative guide , If one factor in the full warrants dilution on EPS, the diluted Net EPS = 3.2 cents and based on diluted EPS of 3.2 sen, the PE multiple are as follows:
32 sen 10x
34 sen 10.6x
36 sen 11.25x
38 sen 11.87x
40 sen 12.5x
45 sen 14.1x
50 sen 15.7x
55 sen 17.2x
60 sen 18.75x

As a guide, if market values SONA mother share price at only 50 cents once QA has been announced, then one should be invested in SONA mother share now.

However if market values SONA mother share price at 67 cents only, then one should be invested in SONA mother share as there wont be much gain from warrant.

If market values SONA mother share price to be 98.5 cents only, then both SONA and SONA-WA will have similar percentage gains.

However if market values SONA market price to be much more than RM 1.0 then one should stay fully invested in SONA-WA as the percentage gain on invested capital will be relatively higher.

Market is expecting SONA mother share to be worth much more than 50 cents and the premium of SONA -WA is an indication of this. If the market perceives that SONA mother share is worth much more than 50 cents i.e above RM 1.0 , then one should be fully invested in SONA-WA as the percentage gain from invested capital will be much higher with SONA-WA if mother share is worth more than RM 1.0.

At this price of SONA-WA, one has just to keep it aside and just wait for the QA announcement.

Ex date on Aug 28 means the share comes with free warrant up to 27 Aug. If u sell on 28 Aug morning, you will get free warrant but price will be lower...

hng33,
TQ for info.
What is the market price for Suprima S? When will the Suprima 2.0 L turbo engine be launched?

Let us wait for the upcoming Q2 results as an initial indicative guide on MAS operational performance and thereafter the future Q3 results will be a very important indicator on MAS future performance onward.

If there is irrational exuberance in a stock and if one holds that particular stock then it is a bonus to the stockholder for a while as long as the irrational exuberance lasts!! Irrational exuberance is only temporal in nature...

However the quality and quantum of Earnings, EPS value, EPS growth rate, current and projected PE Multiples and cashflow generation by operating business are important guides for prudent stock investment and stock disposal and these data info is extremely important to determine whether any stock has entered irrational exuberance stage...

If one perceives that Puncak mother share is worth from RM 3.5 to RM 5.0 then one should be in the warrants..

Well one has until Aug 27 to sell if one has not finished selling today assuming that one perceives that Instacom will not be able to increase its diluted EPS by more than +50% in 2014.

What will be the catalysts that will drive up Instacom fully diluted EPS by more than +50% in 2014??

What will be the impact of TPPA on Pharmaniaga business assuming Malaysia inks the TPPA with USA come October ??

If one factor in warrants dilution and with diluted Net EPS = 3.2 cents, PE multiple are as follows:
32 sen 10x
34 sen 10.6x
36 sen 11.25x
38 sen 11.87x
40 sen 12.5x
45 sen 14.1x
50 sen 15.7x
55 sen 17.2x
60 sen 18.75x

Sign of weakness to fall in love with any counter!!!

BURSA is not that effected by external events..it has its own personality

If one has the perception or news that Instacom earnings per share can increase by more than +50% then buy. If one thinks not then Sell if you have the shares or buy elsewhere...

Never fall in love with Instacom or any other counter....You may love Instacom but Instacom will never love you!!!

Well it is true that no one can predict the market. However the earnings per share will determine the market price and based on current market price of 41 cents, the future earnings per share must increase by more than +50% to maintain same EPS value.

If one thinks that it is realistic to expect more than +50% increase in EPS for Instacom next year then by all means , go and buy the share now.

If one doubts that future earnings per share can increase by more than +50% then it is better to buy later or look for other counters which has better value!!

Mother share will drop by a hefty amount to adjust to the issuance of free warrants as the ultimate determinant of its share price is the EPS. Nothing has changed in Instacom business except the issuance of free warrants which has dilutive effect on its share price.

Current mother share has reflected the free warrants price but its market price will adjust downward soon after.

Instacom management needs the cash from warrant conversion to fund future cashflow requirement as nature of its business model has lumpy cashflow requirement.

What I think??
Mother share has increased by a whopping +42.85 % from 28 cents level as those who wanted the warrants would have already bought then...

If one buys at 40 cents with free warrants, the expectation is earnings per share will increase by +50 % in the future and one has to ask whether this is a realistic expectation for EPS to increase by more than +50%???

The theoretical price of mother share after news of warrants announcement is 37.67 cents assuming same EPS is maintained and that implies future expectation of earnings per share to increase by +50% from current reported earnings per share as the new warrants will theoretically reduce EPS by -33.33 % if there is no increase in current EPS.

By buying mother share now at 40 cents with free warrants, the expectation is that future earnings will increase by more than +50% just to maintain the current earnings per share value !!!!

Is it realistic to expect earnings to increase by more than +50% by buying mother share now at 40 cents???? What has changed in the real business of Instacom besides the free warrants announcement which has the effect of diluting current earnings per share by 33.33%????

When EPS dilutes, share price will follow to adjust to lower earnings per share!!!

The Govt had admitted that it is not in the business of running airline such as MAS. The govt rather focus on strategic interests and MAS is certainly not strategic interest!

Yes it is correct that MAS is for SALE!!!

The price had appreciated from recent 28 cents to this level with a gain of +42.85%.

Will it go up further?

What is the new catalyst that will drive up the share price?

So far there has been no new catalyst besides the old news.

Unless there is fantastic news on new projects secured today that will increase EPS by more than 50%, most investors will follow the evergreen investment principle of "Buy on rumours, Sell on news"

Management needs the cash to fund future cash flows and for strategic future fund raising exercise , the warrant conversion price must be attractive for warrant holders to convert

EGM will decide on exercise price and based on notice given by Instacom, the exercise price will be 0.85 X average of last 5 days closing price say 39.3 cents and that means the exercise price will most likely be 33.4 cents or thereabouts.

Instacom issued share capital is 702.25 million and no of free warrants to be issued is 351.125 million. When warrants are fully converted to shares the current EPS will drop by -33.3% and the future earnings must increase by +50% just to maintain current EPS.

EGM news on free warrants had already been posted in BURSA website and the share price had already factored this. Those who wanted the free warrants would have bought already and those who don't want will have sold as impact of free warrants is to dilute earnings per share.

The impact of free warrants is already reflected in the share price. When the free warrants are approved, share price will most likely drop unless there are fresh news that favourably impact on earnings to support the share price.

Leopard cannot get rid of its spots...still many same old spots which is clearly visible from far away!!! lol

Superstar status may not be so soon...they are not the only player in town ie. in Malaysia....it may possibly take a while. Latest politic rumour is to give cabinet posts to young upcoming Pakatan politicians in BN government. If that materialize in near future then the influence from Sarawak politic requirement may possibly dim a bit to say the least!!

MBSB requires more capital to fund its robust growth, profit growth and management has indicated on dividend reinvestment plan for shareholders.

What will be the conversion price for the warrant? Management had stated that it will be at 15% discount to last 5 days traded price. So warrant will be issued at a discount as management wants shareholders to convert warrants for new instacom shares

Management objective in issuing free warrants is to raise future cashflow funding for the company. Management wants investors to convert warrant to support its future cashflow requirement.

The net effect of issuing 1 free warrants for every 2 mother share means that there will be huge dilutions in earnings in the foreseeable future when the warrants are exercised. If management want to raise additional capital quickly for future funding requirement then the warrant conversion price must be attractively price to encourage investors to convert

The warrants must be attractively priced as management is pursuing this approach to raise capital for future cashflow requirement. What is the purpose of issuing warrants besides funding requirement???

Issuance of free warrants will result in earnings dilution all things being equal.

The issuance of Bonus warrants will further reduce the share price as it effectively dilutes the earnings per share.

Go long on Puncak and U will earn more money!!!

Muarmali,
You prefer MAS over Puncak? MAS fundamental better than Puncak fundamental??

This is a solid fundamental stock to invest for long term dividend payout.

Both KPS and Puncak will be cash rich post deal and there is a high likelihood of special dividends to its shareholders. Post deal, Puncak will be rerated and will surprise more on the upside relative to KPS.

Key issue here is KPS future earnings visibility is poor as KPS does not have ready core assets that can generate good EPS to grow its share price after the restructuring exercise had gone through. KPS is nearly at full value right now. Puncak may possibly have the edge in earnings upside in the future.

hng33,
Puncak has a good chance of bagging more T&I jobs from PETRONAS and this had not been factored into its valuation. Puncak may possibly surprise more on the Upside relative to KPS 26.6 special dividend payout which has been partially reflected in its current stock price.

Lee Chong Wei tried his valiant best but his best was not good enough to beat Lin Dan who had the edge in mental strength that drives the competitive spirit to win.

By stating that LCW= Let China Win, your comment has extreme ill intent tinged with extreme bad taste and you should be ashamed of yourself for stating that and moreover you are not giving any respect for LCW who had tried his very best to win the title against extreme odds.

How would you feel if you were LCW position...You tried your valiant best to win the title but your best was not good enough...moreover your knee could no longer support you in the crucial moments... and you could not participate in the prize giving ceremony....

Please be more responsible in your statements.. You should re-assess your own values in life.

Both Chong Wei and Lin Dan are extremely skillful and very competent badminton players globally.
However Lin Dan had the edge in MENTAL STRENGTH and COMPETITIVE SPIRIT TO WIN and the end result speaks for itself.

Agreed. SONA management is top class and moreover BURSA has much much more stringent criterion in listing of SPACS..so the decision is very clear. Invest with top class management as top class management will deliver the goods unlike MONKEYS in management...

Let us get the basics right...If you pay peanuts you get monkeys running the show. As an investor, I will be extremely concerned in paying peanuts to get monkeys running the show. As you all know ..Monkeys are just plain MONKEYs and if you pay for MONKEYS to be in Management, then you better cut your loss.

So what is the big problem in paying for TALENTS????

The market has given a higher premium value to SONA warrant as the market somehow had perceived that the quality of QA and the quality of its Management to be much more superior over the other SPACs listed earlier in BURSA. The general formulae on valuing warrant is only a guide but it is not an absolute truth.