FPGroup has plenty of room to grow. Post adjustment for 2 for 5 bonus issue in Dec 2017, every new high is also a new all-time high.

FPGroup in its qtr 1 FY2020 report stated that its margin has improved 13.1% over its qtr 1 FY2019.

An increase in gross margin is an indication of increase in efficiency which bodes well for the group's future profitability.

This is bourne out by the 17% improvement in profit before tax over the immediate preceding quarter and a 67% improvement in profit before tax over qtr 1 FY2019.

Armada is mainly in services. It's production is also in gas which is in high demand especially by China which is switching rapidly to clean energy.

There is nothing to fear in Armada unless they do some tricks like spreading fake news or diluting the shares like in Alam.

Hope so. But the wait for recovery may be long and expensive.

The sifus want to transfer your wealth to themselves. Sad. But they made share investment into a sort of zero-sum game.

Syndicates fighting it out. Shorts against the longs. Likely announcement on the law suit soon.

Virtually everyone will say that his farts smells good, including the resident sifus.

Here is my assessment of the just out qtr results for all it is worth:

1) Not as good as the immediate preceding quarter.

2) Below the expectations raised by the hype prior to the results.

Not forgetting LHDN who may decide to put their dogs into the fight for underpaid taxes.

LHDN may also decide to try for 300% of the alleged underpaid taxes by charging for tax evasion.

Whatever the directors say would be trumped by the rumoured USD500 million counter-suit by Khan and Kong if it ever come about.

Not certain whether there would be a counter-suit, but this is a common tactic by the lawyers.

@Yu_and_Mee. The reading of my chart tells me that UZMA is currently a down-trending stock. Both my special indicators are pointing down.

The bottom is not yet in sight although the chart may give an indication. The RM64.15 million 'overpayment' is a new overhang. The negative issues it raised changed the outlook on this stock.

Will the stock suddenly reverse? It's a long shot. A few techinical rebounds maybe but not yet trend reversal. But one cannot predict the market perfectly.

Only certain energy counters with overhang of uncertainties have lost investors' interest. Perdana is another one because of the rights issue.

The insiders were likely selling since 25/10/2019.

The elevator seems to have gone. The guillotine cometh?

If break 35 sen, that is the real BO. But "one-night-stand" front-running hng33 will be out before 35 sen. Hahahah!

@HuatRex. Mr BMW is now proven to be a bellwether used to lead the sheep into the abattoir. And David Gunter is proven to be just another smart adik who had got a gunting rambut.

I suspect Mr Universe and Mr Keranda have already exited together with their canines.

Big sharks collecting.

BO not yet confirmed.

Only the insiders will know the inside story and legal and financial repercussions from the RM64.15 million 'overpayment'.

Seems like insiders selling.

Looks like "one-night-stand" front-running hng33 playground coming up. I wonder when can I see hng33 post: "Bought UZMA @ 80 sens".

Just my opinion based on available info. Not advice to do anything. Market ultimately decides.

If you hold onto your Perdana shares, for each share you get the rights to subscribe for 2 Perdana preference shares (exchangeable for ordinary share on a 1:1 basis) @ 32.5 sens each. The implications are as follow:

1) The VALUE (note: NOT the cost) of your holdings will be: (market price of Perdana ordinary shares during trading on 9th Dec to 16 Dec) + (2 x market price of rights (not yet paid for) during trading from 9th Dec to 16 Dec).

2) The market price of the Perdana shares at ex-date will be closing Market price on 4 Dec divided by three as a result of dilution. Dilution may or may not immediately be a factor of 3 since the rights are for preference shares and not for ordinary shares. But since the conversion is 1:1, the end (although not the immediate) result may be the same as a dilution by 3. It all depends on how fast is the conversion rate by the subscribers for the rights.

AS TO WHEN THE NEW PREFERENCE SHARES CAN BE CONVERTED TO ORDINARY PERDANA SHARES, SO FAR THE DATE IS NOT GIVEN IN THE INFORMATION PROVIDED BY PERDANA.

3) You will however be compensated after ex-date by the market value of the rights (not yet paid for) that will be listed and traded from 9 to 16 Dec 2019.

4) If you don't want to subscribe for the preference shares, you can sell off the rights during the trading sessions from 9 to 16 Dec 2019.

5) If you hold onto the rights, you can subscribe for the preference shares @ 32.5 sens each.

6) The preference MAY be worth more than the ordinary shares since they have priority over ordinary shares for dividends. But it all depends on the Market.

7) Since the preference shares is redeemable, the company has the option to buy back at a certain price (likely the market price).

8) So the uncertainties are as follows:

a) Market price at closing on eve of ex-date i.e. 4 Dec;

b) Market value of rights (not yet paid for or "nil paid rights) during trading from 9 to 16 Dec;

c) The immediate dilution factor; d) the conversion rate of the preference shares for the ordinary shares;

e) the date when conversion from preference to ordinary shares can begin;

f) the market price of the preference shares once listed;

g) the buy-back or redeem price of the preference share set by the company.

9) Drawbacks if hold on to shares:

a) Many imponderables;

b) have to cough more money to subscribe - for each share held, have to cough up 65 sens to subscribe;

c) energy related stocks may not remain so hot or be overtaken interest in other sectors;

d) Rights issues are basically fund-raising for Cash-strapped companies - they are asking shareholders for more money;

e) Not clear what Perdana wants the funds for.
26/11/2019 1:13 AM

MingGoon.

Who said I was worried? I was doing the market a favour and using my expertise to interpret the financial data professionally. That is the purpose of the forums.

I do not deserve jibes although I notice low lives in other forums taking delight at others' losses.

Just because I am positive on Salute despite the qtr loss doesn't mean that I am worried or trying to "justify". The low life sadists thought so and jumped in with their jibes. This is not the purpose of the forums.

They should look at the objective info I provided free for the market.

This is the purpose of forums: To inform objectively and help investors make money or save on losses.

MingGoon, you did sound caution, but you did not quote your sources and reasoning. You use generalities and came across as just another con. That's why you were not effective. Next time, quote your links with sound objective reasons if you are really trying to help.

The reason I sold down Salute was due to general caution that I observe during a financial results reporting month.

And MingGoon, try not to insult by using a person's chosen nick.

I could do the same to you because your nick "MingGoon" is easy to mock. But I shall not go down that road!

And I am generally up and running. Just ran 4KM last night at a fast pace for exercise! Thank you.

OK MM78. Noted.

Selling pressures likely from the insiders.

For those low-life who want to gloat and delight at others' mistakes, as far as me is concerned, you have missed the boat. I sold the bulk of my Salute shares at a profit couple of weeks ago. I was holding onto a token amount.

Now I can average down.

@MingGoon. Please tell us something we do not know rather then going on like a broken record and slipping in a jibe disguised as comment.

The forum is for info not for negative slants to add salt on wounds. Such gloating will have its recompense!

"Material lead time". That is also a contributing factor.

@human. Disguising insults with innuendos is deceitful and also unacceptable.

@cat lim. Please refer to earlier AmInvest report. But now the new target price is 95 sens. Quarterly results is "set to normalise in next quarters ahead".

Next quarter will show the effect of Customer A's orders. Target price is RM1.06.

Also Salutica has share buy-back authority. Therefore can support the price.

Thanks flexibt for the heads up even though the report was dated June 2018. Appreciate f you can give an updated report.

@human. I quote you: "@119 you seem too eager to justify your missed expectation of salutica". You made innuendos about why I posted and then a further very unhelpful innuendo about "false expectations".

In short, you disguise your personal attacks with innuendos that are not only misleading but bordering on being insulting.

But let's stop and concentrate on the market.

In the meantime, for some reasons, all oil-related stocks are down. Perhaps the resident sifus can share their reasons why?

@HuatRex. BMWs are costly to maintain. Guzzles petrol and depreciates rapidly. Unlike Japanese cars.

@Investeye. Salutica is manufacturing for a customer who buys wholesale. Salutica is not marketing its own products to retail customers.

This means that Salutica is producing for a customer order - Customer A. The production is already sold.

@Will76. The risk profile of Armada is different from Perdana. Armada is riskier due to its operations overseas in high risk areas. Witness the recent drastic sell-down of Armada due to just a rumour and the slow recovery.

Perdana is less risky due to it being tied to Dayang which is a major contractor for Petronas the national oil company.

Ex-date is 6th Dec 2019. This means that if you buy Perdana shares after this date, you won't get the rights.

The rights are for redeemable preference shares which can be swopped for Perdana shares on a 1:1 basis i.e. 1 redeemable preference share for 1 ordinary share.

So the holder of each right can subscribe for a preference share at 32.5 sens. He can then either swap it for an ordinary Perdana share or hold it for dividends. If dividend is declared the holders of the preference share will get priority over ordinary shareholders. That's why they are called preference shares.

@Invest_168. In the end, the market will decide. All we can do is inform the market.

BTW, I am not heavily invested in Salute, having sold the bulk sometime ago at a profit. I am now holding just a token amount.

@human. You don't seem to understand cost accounting. So its no point discussing this issue with you further. E.g. if Salutica did not has such practice in the past, then it would help explain the fluctuation in profit.

The fact that the company is able to pay dividends and the large size of its cash and cash equilvalents indicated that the company's cash-flow is under no stress.

In fact "indirect labour" due to increase in head count for the development of the product should not have been charged to period i.e. is current quarter costs but charged to product development costs and capitalised.

Salute management should be questioned as to its accounting policies on this.

@human. It is cost accounting practice to account production cost to the cost of the product and and not period costs like Admin overheads.

Production cost goes into work in progress as should development cost.

The cost in work-in-progress is charged off as unit cost of producing that product and ends up in the cost of finished goods inventory.

Unit cost of the product is arrived at by dividing cost of the finished goods inventory by the total number of the units produced.

The unit cost is then charged off to sales based on the formula: Cost of good sold = unit cost X number of units sold.

Therefore if Salute charge off product development cost during the period of the development of the product, it would be wrong.

Unless the product is not successful and development of the product was aborted. In which case there should be a note to the account.

But there is no indication that the product was not successful. In fact the indication was that the product was ongoing, has not yet generate revenue but already "contributed to significant costs in the current quarter".

One of the significant costs already contributed was "development cost".

This should not have been charged to current period i.e. current quarter cost but capitalised as Product Development and amotised to Finished Goods Inventory cost as the product so developed is produced.

The right issue is for redeemable convertible preference shares. I wonder how the market will react on Monday?

The revenue of RM32 million is double that of RM16 million of the preceding quarter.

The unexpected loss for the first quarter is due to increase in development costs which is written off as an expense instead of being capitalised and then amortised against the sales of the developed product.

This means that cost is charged in the current quarter and not pro rata against sales of the product in the next quarter.

This really means that cost is overstated for the current quarter and will be understated in the next quarter when revenue is generated from the sales of the product.

Despite the 'loss', the company is still in a position to declare dividends of 0.6 sens per share.

The play on Salute is therefore a play on next quarter performance.

We shall see how the market react on Monday.

Perdana renounceable rights issue is at 32.5 sens.

The most important factor for the future of UZMA is Petronas' reaction.

@bc8660. If what you say is true about what you are doing, I would say never reveal your trading strategy.

For the sake of those in UZMA, I am deleting some of my comments.