Posted by huiyi > 2017-10-19 15:44 | Report Abuse

acquisition is still long way to materialize. Buying with price now (>30c) is paying high premium/ gambling with others.

Posted by lextcs > 2017-10-19 16:10 | Report Abuse

100m mkt cap is the target as previously indicated...

Posted by lextcs > 2017-10-19 16:10 | Report Abuse

works out to be ard 40c

Posted by Jacky Jacky > 2017-10-19 16:39 | Report Abuse

I guess game over liao?

Posted by vxpoison > 2017-10-19 17:04 | Report Abuse

Banker chips increasing in scomnet, congrats Koi Koh & all other giraffes...

Posted by Lim Kah Ming > 2017-10-19 17:12 | Report Abuse

Movement in good way. Hope that tomorrow also increasing.

Posted by hklcheng > 2017-10-19 18:23 | Report Abuse

Sold all, take profit...waiting to buy in future

Posted by teohboonleong > 2017-10-19 18:26 | Report Abuse

Scomnet uptrend just starting

Posted by Tham Leong > 2017-10-19 20:19 | Report Abuse

Sold all bought 24 sold 29 only

Posted by Kai Shien Ks > 2017-10-20 00:43 | Report Abuse

i missed my 0.145 :(

Posted by babypost85 > 2017-10-20 09:17 | Report Abuse

today no power lo

Posted by reime > 2017-10-20 09:54 | Report Abuse

today crawling slowly... too fast later got uma...

Posted by aa88 > 2017-10-20 10:13 | Report Abuse

buy back 30c

Posted by reime > 2017-10-20 11:07 | Report Abuse

something is cooking ...

Posted by reime > 2017-10-20 11:10 | Report Abuse

SCOMNET
17 Oct 2017.

In relation to recent announcement by this company to acquire the remaining 80% of SMP (SUPERCOMAL MEDICAL PRODUCTS S/B), this is how we see SCOMNET value. SCOMNET already owned 20% of SMP.
Reference for the above exercise as per below.
Ref: http://www.bursamalaysia.com/market/listed-companies/company-announcements/5572657

What do we see?
How do we see it?

SCOMNET selected information.
Current price of SCOMNET: RM 58 mil. @ 24 sen per share.
NOSH*: 243 mil.
Net Profit T4Q: RM 2.5 mil.
Book Value: RM 0.18. (including 20% of SMP)
*NOSH=Number of Shares.

ASSET Information.
Name of asset to be injected: SUPERCOMAL MEDICAL PRODUCTS S/B. (SMP)
Business Nature: Manufacturer of cables for medical devices.
Price: RM 80 mil. (80% portion, 20% already owned by SCOMNET).
Payment: To be paid in hybrid, RM 4 mil cash, RM 76 mil in SCOMNET newly issued shares, 400 mil new shares at RM 0.19.
Net Profit:
FY2015, RM 16.82 mil. (Not in announcement document)
FY2016, RM 16.22 mil.
6MFY2017, RM 8.71 mil, Annualized FY2017: RM 17.42 mil.
Valuation for SMP acquisition: PER 6.17x, based on RM 100/16.22. SMP price of RM 100 mil for 100% of SMP.

This information was not provided in the announcement proposal. However, it can be found somewhere else.
Net Asset of SMP: RM 55.997 mil.
Therefore, SMP is acquired at 1.79x book value. By this measure, SMP is not cheap, but using its PER method, it looked super cheap.

ACTUAL addition to SCOMNET's book will be,
RM 55.997 x 80% = RM 44.798 mil.
TOTAL SCOMNET's book value after this exercise: RM 43.644 + 44.798 = RM 88.442 mil.
Since the price acquired for 80% is RM 80 mil, while the real book value of SMP is RM 44.798 mil, the difference will be recognize as Goodwill, which is going to be circa RM 35.2 mil.

VALUATION.
i. Earnings method.
Since SCOMNET itself has meager profit and mostly are equity-accounted from its 20% stake in SMP, we are going to value SCOMNET based on the same valuation it utilize to acqure the remaining 80% of SMP at 6x PER.
Therefore, SCOMNET value at 6x PER = RM 16.22 x 6 = RM 97.32 mil.
On per share basis is RM (97.32 / 243) mil = RM 0.40 = 40 sen.
From today opening price of 24 sen, this valuation method sees 66% higher SCOMNET value.

ii. Book value method.
Since we know that SMP total net asset is only RM 55.997 mil and SCOMNET net asset after acquiring SMP is going to be RM 88.442 mil. We are going to value the company optimistically at 1x Book value. Therefore, Net asset per share will be RM (88.442 / 243) mil = RM 0.364 = 36.4 sen.
From today opening price of 24 sen, this valuation method sees 50% higher SCOMNET value.

DILUTION.
After issuance of new shares to the related parties due to the structure of this deal, there will be substantial dilution to the factor of 2.65x less than current holding, should we decide to invest. 400,000,000 new shares will issued for a value of RM 76 mil to 6 individuals. Total NOSH will be 643,000,000.
Example:
Before exercise.
10000 shares bought now, means you own 4.11%.
Calc: ( = 10000 x 243000) %
After exercise.
10000 shares bought now, means you own 1.55%.
Calc: ( = 10000 x 643000) %

And, our valuation above will also be affected due to enlarged NOSH as per following.
i. Valuation - Earnings method.
SCOMNET revised value = RM (97.32 / 643) mil = RM 0.15 = 15 sen.
ii. Valuation - Book value method.
SCOMNET revised value = RM (88.442 / 643) mil = RM 0.138 = 13.8 sen.

MAJOR RISK.
a. The exercise is OFF.
b. Valuation revision to a lower valuation.
c. Shareholding dilution.

CONCLUSION.
So, should we decide to invest in this company, we should be aware that;
a. We know that SCOMNET's value after SMP's 80% acquisition should be in the range of RM 88-97 mil based on 2 valuation methods.
b. BEFORE the acquisition, market MAY bring the value of SCOMNET share closer to the valuation. HOWEVER, there's no guarantee that market's valuation and ours are inline.
c. The price per share of SCOMNET will be diluted as per enlarged NOSH once the exercise is completed, estimated to be in fourth quarter of 2017.

SO, do you see its value higher upon completion of this exercise?

Reference:
SCOMNET proposed acquisition announcement.
SCOMNET latest quarterly report, Q2FY2017.
SCOMNET latest annual report, FY2016.

Posted by Jacky Tan > 2017-10-20 14:25 | Report Abuse

I missed my 0.14 too, haiz. If Scomnet fly in March then I can covered my loss. Need to wait next time liao.

Posted by Lim Kah Ming > 2017-10-20 15:12 | Report Abuse

scomnet still can rise?

Posted by babypost85 > 2017-10-20 15:16 | Report Abuse

today seems so sos o so so

Posted by fortuneteller88 > 2017-10-20 15:51 | Report Abuse

sell before it's too late guys

Posted by alex3388 > 2017-10-20 16:38 | Report Abuse

overbought...

Posted by babypost85 > 2017-10-20 17:37 | Report Abuse

So next week up or down.

Posted by moneykj > 2017-10-20 17:50 | Report Abuse

Near the end.
Next week go to Ktb.

Posted by Lim Kah Ming > 2017-10-20 18:23 | Report Abuse

hopefully next week rise again.

Posted by babypost85 > 2017-10-21 14:00 | Report Abuse

seems like not too much ppl buy scomnet .

Posted by babypost85 > 2017-10-21 14:00 | Report Abuse

cannot attract ppl to buy ?

Posted by Tham Leong > 2017-10-21 21:11 | Report Abuse

2 slow up

Posted by babypost85 > 2017-10-23 11:36 | Report Abuse

well very very slow. sleepy seeing.

Posted by babypost85 > 2017-10-23 16:25 | Report Abuse

no show.

Posted by Tham Leong > 2017-10-23 19:01 | Report Abuse

Carefull look at Trive

Posted by reime > 2017-10-24 09:42 | Report Abuse

i smell something delicious today...

Posted by babypost85 > 2017-10-24 09:51 | Report Abuse

feeling same not too power today ... hmm

Posted by lextcs > 2017-10-24 09:56 | Report Abuse

stay cool...RSI heavily overbought. needs to retract back to neutral before another leg up....MACD still +ve target still 40c for a mkt cap of 100m

Posted by reime > 2017-10-24 09:57 | Report Abuse

warming up

Posted by fortuneteller88 > 2017-10-24 10:41 | Report Abuse

smell not good today

Posted by babypost85 > 2017-10-24 10:52 | Report Abuse

smell burnt. what price u all holding now ?

Posted by koi koh > 2017-10-24 11:08 | Report Abuse

holding money

Posted by babypost85 > 2017-10-24 11:10 | Report Abuse

ok what. holding money is good.

Posted by reime > 2017-10-24 11:27 | Report Abuse

sold la @ 0.305... waiting lower

Posted by koi koh > 2017-10-24 16:20 | Report Abuse

KLCI is sliding, holding money is the best move

Posted by koi koh > 2017-10-24 16:52 | Report Abuse

Ang mo n pink lip bawa wang ke US, BURSA pasti turun

Posted by reime > 2017-10-25 11:26 | Report Abuse

xde ong la...

Posted by reime > 2017-10-25 12:27 | Report Abuse

T4 .... contra player make their exit

Posted by babypost85 > 2017-10-25 13:52 | Report Abuse

continue down down down ..

Posted by koi koh > 2017-10-25 14:07 | Report Abuse

to buy back at lower price

Posted by babypost85 > 2017-10-25 14:24 | Report Abuse

how much lowest can go ? hehheheh

Posted by KEYBOARD > 2017-10-25 16:10 | Report Abuse

cant too lower..medium enough..not so good if too lower..and now...is the time

Posted by KEYBOARD > 2017-10-26 10:55 | Report Abuse

WHERE OTHER...all run already?

Posted by noobbie > 2017-10-26 11:15 | Report Abuse

coming 0.4

Posted by fortuneteller88 > 2017-10-26 11:21 | Report Abuse

lol

Posted by noobbie > 2017-10-26 15:06 | Report Abuse

u think im kidding?...lol back to u..hahaha