One off provision on the power business which is good. It is well protected by the right guarantees and contracts. In the worst part, the equipment could be sold to other players. Power generation and distribution is required by industrial players in Myanmar, Cambodia and parts of Vietnam. I am sure they would be able to recoup the investment and learn from this miscalculated investment. Recovery of investment will then add to future one off gain. Its just a timing game now.
Up side is that Hexza is now looking at small scale development to spruce up the bottom line.
Dont take it private as yet, cannot play such dirty game and write off an investment which can be easily redeployed and reinstated. Cash rm78m, investment in stock rm88m, unless they offer rm1.20 or better. Let us buy in cheap first...
I think mgmt playing a game, trying to buy out cheap. They never revalued property, plant and equipment. plant and machinery almost fully depreciated with original value of rm107m. No wonder bad news now, can clean up, shoot up soon
Loss is due to 100% impairment of the loan and receivables from Tembusu amounting to RM28.54. million. Other segments were profitable. If any amount of this is recoverable, than there will be a write back in the future. This was announced on 7th of November and the stock gap down the following day opening at 0.93 from previous day close of 0.985. If gap down on Monday, it will be a good opportunity to collect.
abcd, I am unable to attend the AGM. Can you please ask what % of the Tembusu loan does the Board thinks will be recovered after legal or any other fees. Why did they provide a 100% impairment? No confident to collect any amount?
Additionally, on page 85 of the annual report they have 3 subsidiaries listed as pre-operating, what business are they getting into and the prospects for this business.
AGM summary: 1) Hexza said they are confident to claim back the Tembusu loan which the lawyer cost is around RM250k - RM500k, 2) Hexza will try their best to retrieve the 8MW equipment and plan to sell to other party after legal case, 3) 100% impairment was made due to after several trips by Hexza to Mynmar, found out Tembusu operation encountered cash flow difficulty and unable to pay the loan, 4) The Tembusu factory is still operational as usual, 5) For diversification through M&A, CEO is still in the midst of valuating proposals and he welcomes any business proposal from public and do email to him (gary@hexza.com.my), 6) For property division, Hexza is still searching for undervalue lands in Penang, Ipoh & KL, 7) New regulation of minimum size of 700ml for alcohol content of 32.5% above will be imposed next week (end of Nov), 8) Hexza anticipates the results of FY2018 is comparable to FY2017 (after hike in excise duty), 9) Majority in the quoted shares are Apple, Facebook, Alibaba, Public Bank, Maybank.
I think the best thing to do is do nothing. Share price will likely be at the current level +/- a bit. Probably more to the negative side. My reasons is as follows: 1) Monday is Ex-Date for Dividend. So cannot chase dividend. 2) As mentioned by Khuen, results for 2018 will comparable to 2017. No catalyst for share to go up. 3) Any write-back of Tembusu loan will take time, more than 1 year. 4) Diversification will take time to bear results, again more than 1 year. 5) More negative as the uncertainty of the impact to the alcohol segment.
Currently this stock isn't a growth stock but it is indeed a undervalued stock. It has cash of RM164.41mil included investment in stocks (RM88.62mil) which translates into RM0.82.
At current price of RM0.94, shareholder is paying RM0.12 for a business that able to generate average core EBIT (excluded one off gain/loss & forex) of RM15mil annually from year of 2013 - 2017 which means it has P/E of 1.6 only!
Thanks khuen for the insightful snippets from the AGM. Its good to knw that mgmt is working hard to get out of the swamp. Buying in with any gap down seems to be on the radar of many investors. Even if they do nothing to improve the business, the fact that their wise directors put half the company invested in growth stocks will yield its own results like an equity fund. So for me as long as dividend yield continues to be good, am waiting to catch more at lower price.
Mine either, will catch a falling knife if available and wait for the catalysts to take place in future: 1) M&A with new business as diversification and growth plan, 2) Strengthening of RM will make raw materials prices lower, 3) Rejuvenate its property development, 4) Fully claim back Tembusu outstanding loan & interest, 5) Price of stocks like Apple, Facebook, Alibaba, Maybank & Public Bank invested continue to rise.
Wow! Now selling at 81 sen a share, translating into a market cap of just 162 million, lower than its net cash and available for sale investments worth a total of over 164 million. How silly some small investors are.
guys, seek greener pasture elsewhere. 1st Q loss. could u imagine for the whole year. is downtrend from here,. this poop nvr move north. check the chart
The Company wishes to inform Bursa Malaysia Securities Berhad ("Bursa Securities") that pursuant to Paragraph 14.09 of the Main Market Listing Requirements of Bursa Securities, the Chief Executive Officer, Mr. Gary Goh Soo Liang had given notice informing the Company in relation to his dealing in the securities of HEXZA. The details are as follows: Type of Securities
Type of Transaction
Date of Change
No. of Securities
Consideration (RM per share)
% of Change Against Issued Shares of HEXZA Ordinary Shares
Dont think related but from his profile from RHB IB. A corporate boy, from AGM Q&A he knws what he is doing and seems to have this Tembusu issue under control
gary boy got tell u he knows? why u nvr tell me earlier? but gary boy only bought 192,200 shares. why never buy 1.92m shares? anyone knows he has rich daddy or not?
dompeilee, u got some inside news on the buy? How this pakat pakat works if he buys so little? I heard today is a good day to buy. so many buyers parked order at 8.05-8.15. If drop also have to wait next week?
The Company wishes to inform Bursa Malaysia Securities Berhad ("Bursa Securities") that pursuant to Paragraph 14.09 of the Main Market Listing Requirements of Bursa Securities, the Director, Mr. Leong Keng Yuen had given notice informing the Company in relation to his dealing in the securities of HEXZA. The details are as follows: Type of Securities
Type of Transaction
Date of Change
No. of Securities
Consideration (RM per share)
% of Change Against Issued Shares of HEXZA Ordinary Shares
(Direct Interest)
Acquired
29.11.2017
35,000
0.835
0.02
This announcement is dated 30 November 2017.
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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....
OngLiao99
268 posts
Posted by OngLiao99 > 2017-11-13 13:49 | Report Abuse
One off provision on the power business which is good. It is well protected by the right guarantees and contracts. In the worst part, the equipment could be sold to other players. Power generation and distribution is required by industrial players in Myanmar, Cambodia and parts of Vietnam. I am sure they would be able to recoup the investment and learn from this miscalculated investment. Recovery of investment will then add to future one off gain. Its just a timing game now.
Up side is that Hexza is now looking at small scale development to spruce up the bottom line.