Disposal of shares to increase market liquidity. I believe, on the other hand, they will be converting free warrants to increase their holding stake in Scomnet. This shares disposal helps to increase shareholders benefit, ie increase liquidity, gaining access to wider investors investment.
Yes, it's a dilution, however if u recall when Scomnet announced free warrant (3 for 1 free warrant), scomnet price was adjusted down, as such current price is reflecting current state of share and warrant share. There is an excise price to pay for converting to mother share.
This is such a hidden GEM counter, imagine each covid case will see the demand increase 1 fold. I dont know what is the ceiling for Scomnet..... buy and keep.
We continue to favour Supercomnet Technologies Bhd (“Scomnet”) for its resilient earnings outlook and as a proxy to the recession proof healthcare industry. We are raising our earnings estimates by 19.5% for FY21 on the back of rising orders from major clients. BUY with revised target price of RM2.68 premised on a 3-year average mean 34x PER which is at a discount to Bursa Malaysia Healthcare Index of 43x further supported by a 68% growth in EPS for FY21.
Scomnet’s recent 2Q20 results were pretty much in-line with our expectations where it reported net profit of RM5.95m (+45% from previous quarter and +12% from last year) with cumulative RM10m for 1H20.Net margins improved to 24.6% in 2Q20 and cumulative 1H20 to 19% from around 16.0% in FY19. We believe it is on track to surpass our RM30m forecast in FY20 with the medical cable segment being the key driver with resilient outlook and impressive pipeline of products to sustain its earnings going forward. Furthermore, their automotive segment is seeing a recovery post MCO and has landed a new major client in French PSA Group.
Scomnet is embarking on a multi-year expansion with initial capex of RM7-10m and eventually is expected to double production capacity catering for their supercharged growth in the medical products supplying their FDA and EMA approved medical cables to their long serving major key clients namely US based Edward Lifesciences and Denmark based Ambu and Mermaid Medical. These companies are major global cardiovascular medical devices companies anchoring Scomnet growth trajectory as cardiovascular diseases are the number no. 1 cause of death globally according to WHO.
Balance sheet remains healthy with cash pile growing to RM56.6m and zero borrowings. We expect Scomnet to deliver its strongest ever performance on record with supercharged growth in EPS of +59% in FY20 and +68.3% in FY21.
The preferred fundamental stocks for Rakuten’s trading are AHB Holdings Bhd, an office furniture supplier for integrated systems, D’nonce Technology Bhd, an engineering solutions supplier, and Supercomnet Technologies Bhd. It is a wire and cable manufacturer in the medical equipment, electrical appliances, consumer electronics and automotive markets.
These three stocks are considered to be beneficiaries of the epidemic.
Rakuten Trading pointed out that Yili Holdings' latest products, "Covid Panels" and "SpaceCom Medical Hubs", will benefit from the new normal of office space and medical centers. The agency expects that as the demand for these products will surge as it enters the era of epidemic prevention, the group is likely to record record revenue in fiscal 2021.
Similarly, the agency predicts that Tianlong Technology will achieve record profits in fiscal 2021, because major glove manufacturers use the group's packaging boxes.
As for Shentong Wire, due to the epidemic pushing up medical cables, revenue will see strong growth. The group is expected to deliver the strongest performance ever, with earnings per share in the 2020 and 2021 fiscal years will rise by 59% and 68.3%, respectively.
YouTube Link: https://youtu.be/OFNHZiazK-g Hello everyone, presenting to you a new segment within my channel called the 2-minute QuickTake. Today, I will be featuring Supercomnet Technologies Berhad (Scomnet, 0001) with a market cap of RM1.29 billion. There was an off-market transaction of 35 million Scomnet shares which was done at RM1.95 (or 5.43% stake) recently.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
PengQuanLim
29 posts
Posted by PengQuanLim > 2020-09-07 14:02 | Report Abuse
Boss keep disposing shares