Large number of warrant conversion means dilution for the mother share, because there are more shares for the same amount of 'company'. But it can also be a good thing, since the exercise price goes into the company's coffers, they get to use for capex, increasing production. Esceram's growth trajectory is clear so I'm not too worried even with the dilution effect. The growth is going to surpass it.
But the other way round is also true. More warrant conversion means less warrant yet to be converted. Notice that although we have a lot of warrant conversion this week, the price is pretty stable. Holding power is there. All of us holding mother share can just be patient for the next two quarters, I really think will easily hit 1.30-1.40, maybe more.
The warrant expiry date is still quite far off so I'd say the most important thing is whether the margin between warrant and mother share price suits you. Generally speaking, the warrant will trail the mother share by about 20 cents (the conversion fee) but sometimes if the warrant value 'lags' then you can get a decent margin.
One thing to note is that if Esceram declares dividends then that's eligible for mother share, not warrant. I won't be surprised if Q4 we will get some. They won't want to hold so much cash, so should either give out as dividends (short-term gain for shareholder) or utilise as capex (long term gain for shareholder). The dividends from Esceram since last year is negligible because they have been constantly using for capex, expanding their capacity. We benefited from it in the recent quarter, but there's much more to come. Based on the company announcements we can expect volume to double over the next 12 months. The demand is certainly there. How that translates into profits is anyone's guess, but it should be decent.
Again this is just the FA that I'm doing. Don't take my words for granted, go do your own DD. I'm just a goat monster with internet access and keyboard.
The current monthly production is ard 450K to 500K pcs of hand formers. Building 2 new factories. 1 factory wil be completed by this July. The other 1 wil be completed by end of this year. The production volume wil be double, increase up to ard 1 million pcs per month.
Malaysia Automotive Robotics and ioT Institute ( MARii ) and World Gloves International Group City & Development Hub are investing RM100 million to build Gloves Manufacturing Plant in Kuantan to supply all types of gloves globally. This is only part of the World Gloves City. More glove manufacturing plants will be built
Again, ES is packed with orders n wil be busy for many years. Not only having 2 new hand formers production plants in Perak, ES is acquiring a new plant in Thailand soon to meet the huge n continous orders
ESCERAM'S AMBITIOUS EXPANSION PLAN - 2 strategically located properties acquired at one go
(A) FIRST PROPERTY ACQUIRED - 1½ storey factory @ RM2,165,000 SUBJECT: ES CERAMICS TECHNOLOGY BERHAD (“ES” OR THE “COMPANY”) - ACQUISITION OF PROPERTY 1. INTRODUCTION Pursuant to Paragraph 9.03 of the Bursa Malaysia Securities Berhad ACE Market Listing Requirements, the Board of Directors of ES wishes to announce that Easy Sun Sdn. Bhd. (Registration No. 199801003694) (459820-A) (“Purchaser” or “ESSB”), the wholly-owned subsidiary of the Company has on the 30 December 2020 entered into a Sale and Purchase Agreement (”SPA”) with Petamela Sdn. Bhd. (Registration No. 198101012682) (78812-P) (“Vendor”) to acquire one (1) unit of 1½ storey factory held Pajakan Negeri 37835, No. Lot 128276 Mukim Hulu Kinta, Daerah Kinta, Negeri Perak (“Property”) at a total cash consideration of Ringgit Malaysia Two Million One Hundred and Seventy Five Thousand only (RM2,175,000.00) (“Purchase Price”). (hereinafter referred to as “Acquisition”). https://m.malaysiastock.biz/Company-Announcement.aspx?id=1285027
(B) SECOND PROPERTY ACQUIRED - Land approximately 35,540.0 sq. m. in area @ RM8,000,000.00 SUBJECT: ES CERAMICS TECHNOLOGY BERHAD (“ES” OR THE “COMPANY”) - ACQUISITION OF LAND 1. INTRODUCTION The Board of Directors of ES wishes to announce that Easy Sun Sdn. Bhd. (Registration No. 199801003694) (459820-A) (“Purchaser” or “ESSB”), the wholly-owned subsidiary of the Company has on the 30 December 2020 entered into a Sale and Purchase Agreement (”SPA”) with Worldclass Boulevard Sdn. Bhd. (Registration No. 201301002803) (1032641-X) (“Vendor” or “WBSB”) to acquire a vacant undeveloped industrial plot held under the leasehold title Pajakan Negeri 115490 No. Lot 207429 Mukim Hulu Kinta, Daerah Kinta, Negeri Perak measuring approximately 35,540.0 sq. m. in area (as stated in the title) (“Property” or “Land”) at a total cash consideration of Ringgit Malaysia Eight Million only (RM8,000,000.00) (“Purchase Price”). (hereinafter referred to as “Acquisition”). https://m.malaysiastock.biz/Company-Announcement.aspx?id=1285028
advice those plan to buy, hold your money first, there might be promotion price come soon Those just entered (unfortunately at high price there eg 0.9x), good luck as tough time may be coming to test your patience
I m just a normal investor for good fundamental, good value n growth stocks. Hv been holding ES since last year August, bought few batches in between, wil hold for mid to long term
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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....
ooi8888
1,650 posts
Posted by ooi8888 > 2021-03-25 22:18 | Report Abuse
I think they are still collecting these few days.