facbind is linked to kbunai, shared directors with ptgtin and octagon. these r heavy $$$ losing company, so becareful although facbind carries huge cash in hand due to asset disposal.
Since the company has more cash than its market capitalization, the most logical thing the management should do is to buy up all the shares not owned by its directors and associates, using the company's cash reserve.
(FACI MK) Technical BUY with +13.6% potential return Last price : RM1.47 Target Price : RM1.55, RM1.67 Support : RM1.39 Stop-loss: RM1.37 BUY with a target price of RM1.67 with stop loss placed below RM1.37. FACI’s share price surged past the strong resistance of RM1.39 (now support) on 25 Apr 14 before hitting a new high at RM1.55. As the share price eased in the wake of profit-taking activity, FACI stabilised above the support of RM1.39. However, yesterday’s gap-up represents an upward continuation of the recent uptrend despite the formation of a weaker candle of “northern doji”. A higher trading volume of 2.45m share was recorded along with a bullish crossover in Stochastic which in our opinion validated the breakout and could propel the share price higher. Moving forward, we peg the upside at the 1.38x Fibonacci extension level of RM1.67 over the medium term.
FACB Industries may resume its rally after the latest white candle. If the stock stays above MYR1.60 today, traders may opt to buy – with a close below MYR1.50 as a stop-loss. Should the MYR1.70 resistance level be broken, the price target will be MYR1.80. However, failure to stay above MYR1.60 will likely see the stock trading lower. In the meantime, further support is at MYR1.40. RHB RESEARCH
FACBIND is dragged down by its sister company KBUNAI (44%). KBUNAI is bleeding heavily, lost 22mil this quarter, lost 17mil last quarter. FACBIND is gives cash loans to KBUNAI, in return KBUNAI gives FACBIND its shares. Problem is KBUNAI shares keep dropping, so FACBIND is suffering paper losses in KBUNAI.
speakup you are not entirely correct. Though FACB owns Kbunai's share, but Kbunai is not treated as an investment holding of FACB hence it is actually not affecting the P&L of FACB.
If you refer to the balance sheet, you will realize that Kbunai's share is classified as Available-for-sale investments under Non-current asset. Though as an asset Kbunai is not giving dividend or generating income for FACB, but it is better than just write the debt off as bad debt and FACB receive nothing from the it. Kbunai is still trading at 0.085-0.9 currently, meaning FACB can at least get back 15 millions if they cash out Kbunai.
I invested in FACB becoz of it's cash rich balance sheet. Although the recent quarter it posted an EPS of -0.47, but the accounting ratio is becoming more and more healthy.
Comparing with preceding quarter, FACB had a small increase in cash (1mil), but quite some decrease in liabilities (2mil), which ultimately result the net cash per share increased from 1.49 to 1.51.
In conclusion, buying FACB with net cash per share of 1.51 @ currently price 1.38, meaning you buy money at a discounted price of 10%. In addition, don't forget that FACB has a net current asset per share of 1.88. If you follow Benjamin Graham NCAV trading strategy, you have a investment safety margin of 27%.
The thing I dont like about FACB is its investment in KBUNAI. KBUNAI is a heavy bleeding company. By right FACB should reward its shareholders by giving back a portion of their huge cash pile, but instead the cash pile is used to keep KBUNAI alive on life-support.
speakup may I know from where you got the information FACB loan its cash to Kbunai? My understanding is that the shareholding of Kbunai, was a debt -> share exchange deal. This debt should be business operation debt, most likely FACB supply dreamland mattress to Kbunai for their resort business, but Kbunai is not able to pay back the debt. Though this bad debt is anyway not a good deal, but I don't see any sign that FACB is giving loan with its cash to Kbunai anymore after this deal. If really this is the case, we shall really question the management in AGM what is their plan with this cash pile and ask them why giving loan to Kbunai after knowing their credibility issue.
Facbind.'s net cash per share is much higher than RM 1.51. Its deposits, cash and bank balances total over RM 148 million. It has zero debt, but has trades and others payable + tax liability amounting to RM 11.5 million. This is more than compensated by its trades and others receivable amounting to RM 17.3 million. With a paid up capital of RM 85.163 million, its net cash per share is RM 1.75 and NTA is RM 2.51 per share.
I bought FACBIND at 1.20+ when I thought FACBIND would pay out a special dividend. But so much time has passed without management giving any hints of a special dividend. So I finally disposed all at 1.50+.
Those hoping for a big fat special dividend from FACBIND will be disappointed as FACBIND is more interested to use its cash pile to sustain its bleading associate KARAMBUNAI.
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....
chean1984
470 posts
Posted by chean1984 > 2014-04-28 12:20 | Report Abuse
profit taking