Leno, have you ever worry that Dato Sri Thong Kok Kee will privatize Insas?
If let say the offer price is RM1.30, then is no much upside for INSAS-WC d, coz once it privatise, you cannot enjoy the warrant premium anymore.
Personally I think it is very high chances Dato Sri will privatise it, and this is the reason why INSAS share price remain below RM1.00 for so many years.
The price offer must be very Good b4 the world greatest intelligent cat in the world Leno can accept mah!!
Lu tau boh ??
Posted by Albukhary > Aug 12, 2021 1:34 PM | Report Abuse
Leno, have you ever worry that Dato Sri Thong Kok Kee will privatize Insas?
If let say the offer price is RM1.30, then is no much upside for INSAS-WC d, coz once it privatise, you cannot enjoy the warrant premium anymore.
Personally I think it is very high chances Dato Sri will privatise it, and this is the reason why INSAS share price remain below RM1.00 for so many years.
Glaring us right in the face is Insas Bhd, which owns 16.33% or 545.5mil shares in Inari.
At its price of 93.5 sen as of Aug 11, Insas has a market capitalisation of RM648.28mil.
Insas is controlled by Datuk Seri Thong Kok Khee,
Thong, who also serves as the non-executive director of Inari, owns a direct stake of 0.07% or 2.15 million shares in the company.
Insas has started moving since Inari’s uptrend began two weeks ago. From 88 sen on Aug 3, the stock now stands at 93.5 sen.
Nonetheless on its own, Insas is a decent company with strong financial backing.
Based on its latest cash position of RM573.58mil, the stock has cash per share of 82.7 sen. It is also only trading at a price earnings ratio of 2.66 times.
The stock currently offers a dividend yield of 2.13% based on the 2 sen dividend it gave.
For the nine months to June 30, 2021, Insas has so far recorded net profit of RM217.26mil from a previous loss of RM2.42mil last year. The good results were due to the buoyant capital markets last year, and disposal of shares.
For the third quarter to June 30, Insas’ net profit of RM69.72mil from a previous loss of RM51.48mil was also helped by the higher equity contribution from Inari of RM12.6mil.
Currently, Inari contributes roughly 8 sen operating profit to Insas every year.
Based on Inari’s growth guidance by Inari’s management, this 8 sen contribution should then be expected to double to 16 sen over the next two years.
Meanwhile, Insas’ other businesses in the financial sector, namely corporate advisory, stock broking, financial lending and investments are expected to generate another 9 sen to 15 sen per annum to Insas.
For the nine month period, Insas already generated earnings per share (EPS) of 32 sen.
Based on this EPS of 32 sen:
PE 6X = RM1.920
PE 8X = RM2.560
Now even without taking into account the contribution from Inari, Insas’ own assets amount to RM2.36 per share.
If we were to assume that the fair value of Insas is its net tangible asset plus its 16% holding in Inari, thus Insas’ revised net asset value (RNAV) with Inari will be as follows
1. When Inari RM3.60, Insas is RM5.19
2. When Inari is RM4.00, Insas is RM5.50
3.When Inari is RM4.40, Insas is RM5.88.
For now, Insas is only 93.5 sen.
For those who want an even cheaper entry to Insas, they may consider Insas warrant C which came to life on March 5, 2021.
With a five year lifespan, the warrant has an exercise price of 90 sen. The warrant is currently trading at 40 sen.
Insas’ business
Insas is most known for being the owner of M&A Securities Sdn Bhd, a stock broking company providing trading services for securities listed on Bursa Malaysia.
However, it has other principle business segments which consist of:
stock broking, provision of corporate finance & advisory services and structured finance investment holding & trading; technology & IT related services; retail trading and car rental; property investment & development. The group’s main operations are located in Malaysia and Singapore and its principal associate company’s operations are located in Malaysia, Philippines and China.
If Dato Sri Thong (currently with PAC officially hold 32.96%) buy from open market and trigger the 33% conditional MGO. The appointed advisor will definately advice the offer price is not fair and not reasonable and recommend shareholders to reject the offer.
Insas - A hidden gem and cheaper entry to Inari Author: HLInvest | Publish date: Thu, 24 Oct 2019, 9:36 AM
Technology and IT-related division is the anchor earnings contributor. INSAS core activity is investment in high growth technology companies in three broad technology sectors namely electronics manufacturing services (EMS), financial transaction processing (“Fintech’) and bio-technology. The major investee companies in the respective tech sectors are INARI, Numoni Pte. Ltd. (“Numoni’) and Sengenics Corporation Pte. Ltd (“Sengenics”).
INARI is involved in the Outsourced Semiconductor Assembly and Test (“OSAT”) industry for radio frequency (RF) products and tailored EMS contract manufacturing to the semiconductor optoelectronic industry. According to earnings consensus, INARI is expected to report earnings CAGR of 23% for FY19-21 on the back of a 20% hike on revenue, driven by an expected surged in related RF components demand to support the growing need for frequency bands and smartphone sales volume in next 5G generation smartphones sales. Apart from RF, the group expects improving sales from the optoelectronics division, driven by resilient demand for fibre optics transceivers and higher sales volume for sensors.
Numoni was originally formed to bring financial inclusion to the under-banked with its Cash-in Cash-out solutions, coinciding with rapid changes in the financial payment industry with the onset of mobile enabled financial technology (“Fintech”) during the last few years. Numoni’s subsidiary in Malaysia, Numoni DFS Sdn Bhd is licensed by Bank Negara Malaysia to conduct e-wallet and remittance businesses.
Sengenics is a functional proteomics company that was originally spun out from research that was originally carried out at Cambridge University in the UK. The company has a patented technology called KREX and has made good progress engaging world renowned customers and collaborators that include top pharma, biotech companies and ivy league-class academic institutions in the USA, Europe and Asia as it expands its footprint in the biomarker industry.
Riding on INARI’s success (contributed average 50% to INSAS FY18-19 earnings). INSAS main asset is its 19% stake or RM1.23bn in INARI, which already exceeded INSAS market cap of RM586m, implying that the market is valuing its other divisions such as Financial service and credit & leasing division; Property investment and development division; Investment holding and trading division; Retail trading and car rental division businesses for free. Meanwhile, INSAS is also holding a 12% stake in HOHUP (RM23m market cap), 10% stake in OMESTI (RM20m market cap), 25% in DGSB (RM18m market cap) and 8% in SYF (RM10m market cap).
INSAS is a cheaper entry into INARI as it is the parent company, holding an effective stake of 19%. Despite being an associate company, INARI contributed approximately 50% of INSAS FY18-19 PBT while the rest are coming from its financial services and credit & leasing, property investment and development, retail trading and car rental as well as investment holding and trading segments. Based on INARI’s current price level, INSAS RNAV is worth at least RM4.12, trading at a steep 79% discount (refer to Figure 5). Even after applying a 30% discount for its liquidity, there is still a 241% upside to INSAS revised value of RM2.88.
Bullish signs ahead after staging triangle breakouts on the daily and weekly charts. After building base above the support trendline from a low of RM0.695 (23 May), INSAS finally staged a long awaited triangle breakouts on its daily and weekly charts this week. The two triangle breakouts could potentially kick start a new upswing soon, supported by positive technical indicators and trending above the multiple key SMAs. Taking out the immediate resistance at RM0.87 (24 July high) would spur prices higher towards RM0.90 (52-week high) next before reaching our LT objective at RM1.00 psychological barrier. Supports are pegged at RM0.815 (200W SMA) and RM0.80 (20W SMA). Cut loss at RM0.78.
I have a couple of questions that you probably would have answers already.
1) Between 2019 and 2020, sales revenue decreased but receivables went up and, oddly, the current receivables went up as well.
2) The company has received interest income of RM11.442M on deposits of RM671.652M deposits, but paid RM21.452M interest expenses on RM328.087M borrowings. Wouldn't the company save on the interest expenses by using half of the cash balance to pay down the borrowings?
Receivables ____________________________________ 2020 ________ 2019 Neither past due nor impaired ____________ 433,354 _____ 386,097 1 to 30 days past due not impaired ________ 1,121 _______ 1,390 31 to 60 days past due not impaired _______ 1,192 _______ 1,428 61 to 90 days past due not impaired _______ 847 _________ 1,747 91 to 120 days past due not impaired ______ 1,595 _______ 893 More than 121 days past due not impaired __ 59,239 ______ 51,541 ____________________________________63,994 ______ 56,999 Impaired _____________________________ 15,662 ______ 15,315 ____________________________________ 513,010 ______ 458,411
____________________________________ 2020 ________ 2019 Deposits with licensed banks and ________ 491,564 ______ 554,552 financial institutions Cash and bank balances _______________ 180,088 ______ 95,148
Interest income from:- _________________ 11,442 _______ 15,086 - deposits and cash balances with licensed banks and financial institutions
Only M&A, ICL, car rental, stocks investment holding and property rental income contribute to revenue. Revenue will be reduced if less investment holding trading. Most of the profit were from M&A, ICL, share of profit from associate companies (especially Inari) and fair value gain/loss from holding fair value investment assets/stocks.
The receivable increase was from increase loans given out by ICL and trade receivable from increase stocks trading volume by M&A brokering services. Interest expenses used at brokering business is reductable from net income for brokering.
Money deposite at bank did not earned much interest that is why I say the Board/Management of Insas is too conservative and prudent almost to a fault.
Am I to understand that the RM433,354M worth of receivables (not past due and not impaired) is not a traditional form of receivables but is actually loans by ICL and share margin financings by M&A? (Dealer’s representatives’ deposits and clients’ trust monies have been specifically excluded from both assets and liabilities, so M&A's trading volumes will not impact receivables)
So the average interest rate earned by Financial services and credit & leasing will be 7.2% (36,855/513,010)?
Placing almost RM700M in bank deposits at 1.7% per annum is prudent.
However, paying 6.53% for the RM328M borrowings is odd. Might as well use the FD to pay down the borrowings or do share buybacks.
Sslee Only M&A, ICL, car rental, stocks investment holding and property rental income contribute to revenue. Revenue will be reduced if less investment holding trading. Most of the profit were from M&A, ICL, share of profit from associate companies (especially Inari) and fair value gain/loss from holding fair value investment assets/stocks.
The receivable increase was from increase loans given out by ICL and trade receivable from increase stocks trading volume by M&A brokering services. Interest expenses used at brokering business is reductable from net income for brokering.
Money deposite at bank did not earned much interest that is why I say the Board/Management of Insas is too conservative and prudent almost to a fault. 13/08/2021 5:26 PM
Analysis on Insas profit come from for the past 3 quarters.
M&A is into advisor, undertaking for IPO, PP, RI and GO need strong standby financially credit line of hundreds million for the offeror.
The Board of Directors ("Board") of Rubberex Corporation (M) Berhad ("Rubberex" or "Company") wishes to announce that the Company has on 22 June 2020 received a notice of unconditional mandatory take-over offer ("Offer") from Hextar Rubber Sdn Bhd (formerly known as ERP Star Inc. Sdn. Bhd.) and Dato' Ong Choo Meng, being the Joint Offerors for the Offer, through M&A Securities Sdn Bhd.
@PSAi3alert : However, paying 6.53% for the RM328M borrowings is odd. Might as well use the FD to pay down the borrowings or do share buybacks.
Insas cannot do share buyback because currently Dato Sri' Thong and PAC hold 32.96% any share buy back resulting in Dato Sri Thong and PAC holding to reach 33% will required Dato Sri Thong to offer conditional MGO.
Since Dato Sri Thong will not vary his shareholdings, Leno should do a hostile takeover.
Sslee @PSAi3alert : However, paying 6.53% for the RM328M borrowings is odd. Might as well use the FD to pay down the borrowings or do share buybacks.
Insas cannot do share buyback because currently Dato Sri' Thong and PAC hold 32.96% any share buy back resulting in Dato Sri Thong and PAC holding to reach 33% will required Dato Sri Thong to offer conditional MGO. 13/08/2021 11:12 PM
The last time Insas do share buyback in on Jan 2015 and now hold 30,327,291 treasury share.
INSAS] Share Buyback (Form 28A) on 30-Jan-2015 Stock [INSAS]: INSAS BHD Announcement Date 30-Jan-2015 Date 16-Jan-2015 to 16-Jan-2015 Number of Shares 200,000 Currency Malaysian Ringgit (MYR) Price (per shares) 0.890 - 0.895 Total Amount 179,268.05 Total Treasury Shares 30,327,291
PSAi3alert Since Dato Sri Thong will not vary his shareholdings, Leno should do a hostile takeover
The recent cash call Insas-PB with free WC are actually for Dato Sri Thong to collect more WC as a way to ensure his controlling shareholder status and to fight off any hostile takeover.
Small wheel turn big wheel is always a vulnerable situation.
Sslee PSAi3alert Since Dato Sri Thong will not vary his shareholdings, Leno should do a hostile takeover
The recent cash call Insas-PB with free WC are actually for Dato Sri Thong to collect more WC as a way to ensure his controlling shareholder status and to fight off any hostile takeover. 13/08/2021 11:43 PM
Just imagine without the WC Dato Sri Thong is more vulnerable to hostile takeover.
A very simple question why pay RM1.023 billion to own 330 million of inari when you can use the same amount to take over Insas ( 545.5 inari share and everything inside Insas)?
Gordon Gekko would have said 'Blue horseshoe loves Insas'.
Why isn't he?
Sslee Just imagine without the WC Dato Sri Thong is more vulnerable to hostile takeover.
A very simple question why pay RM1.023 billion to own 330 million of inari when you can use the same amount to take over Insas ( 545.5 inari share and everything inside Insas)? 14/08/2021 12:00 AM
Global GDP dives down as World's Third Biggest Port is shut down. Without any trade, Global profits of anything, including but not limited to condoms goes down.
Condoms are no longer required for birth controls. Covid has done the job by inducing orchitis and/or decreasing testosterone levels, sperm counts, and motility
i3lurker Global GDP dives down as World's Third Biggest Port is shut down. Without any trade, Global profits of anything, including but not limited to condoms goes down.
-->> 2) What sort of nuclear science business is Insas running that requires Directors remuneration as a percent of revenue at 5.629% and Directors remuneration as percent of staff costs at 40.67%?
-->> 3) I assure you that you do not want me to look at Inari. You be courteous and I will look away.
leno This year and last year is bad for most company. Among the few very profitable business is the AH LONG business.
Inari Credit Leasing (ICL) is in a very the NICHE market. They stand in between the bank and ah long. Bank don't want lend, ah long too high interest, then u go to ICL.
The Receivables are all co-lateralised, ballooning because of very GOOD BUSINESS during this trying period, and ICL has "secured" all this business which going to pay good money for many many years to come. We are talking about 5 years, 10 years of SECURED profit.
And until now, we have not go into Inari share price of RM 3.50 !! FAK U if u still cannot understand !
14/08/2021 9:41 AM
leno U must be able to manage the company. U take over, then all the staffs resign, how leh ? U think this is glove company ? any bangla or indon can be replaced aa ?
Trade receivables are mainly made up of outstanding share purchases by the stockbroking clients which are still within the Bursa Malaysia’s settlement period, margin debts granted to clients of the stockbroking unit, and the structured finance and loans granted to clients by Insas Credit & Leasing Sdn Bhd, a licensed money lending company. The loans are performing and the securities provided by the clients are sufficient to cover the trade receivables. The impaired trade receivables related to old trading and margin losses incurred by clients of the stockbroking unit and all the impairments have been fully charged out to income statements in the earlier financial years.
The interest rate charged by ICL is in accordance with the Moneylending Act, which is not more than 12% p.a. for secured loans and not more than 18% p.a. for unsecured loans.
Moneylending subsidiary company: Insas Credit & Leasing Sdn Bhd Paragraph 8.23(2)(e) Appendix 8D(1) - Aggregate amount of outstanding loans as at 30 June 2020 Category of loan receivables: Secured: Unsecured: Total RM'000: RM'000: RM'000 (a) Corporations: 230,309: 25,942: 256,251 (b) Individuals: 10,135: 32: 10,167 (c) Corporations within Insas Berhad: Group: 4,035: - :4,035 (d) Related parties - - - Total 244,479: 25,974: 270,453
Agreed many Thong are director of INSAS subsidiary companies,
As at 30 June 2020, the Group has a total of 225 (2019: 279) employees (excluding directors) which consists of 63% (2019: 45%) female and 37% (2019: 55%) male. Staff cost: RM 27.4 million (2020): RM 26.5 million (2019). Exclude directors
The Directors who held office during the financial year and up to the date of this report are as follows:- Y.A.M. Tengku Puteri Seri Kemala Tengku Hajjah Aishah Binti Almarhum Sultan Haji Ahmad Shah, DK(II), SIMP* Dato’ Wong Gian Kui* Dato’ Dr. Tan Seng Chuan* Ms. Soon Li Yen* Mr. Oh Seong Lye
* Directors of the Company and certain of its subsidiary companies. The Directors of the subsidiary companies since the beginning of the financial year and up to the date of this report, excluding those who are already the Directors of the Company are:- Dato’ Sri Thong Kok Khee Mr. Sundararajah A/L Ramasamy Datin Sri Yeoh Kwee See Dato’ Ng Jet Heong Ms. Thong Mei Chuen Datuk Tan Choon Peow Mr. Thong Weng Sheng Mr. Monteiro Gerard Clair Dato’ Thong Kok Yoon Ms. Winnie Ng Yee Ching Datin Tan Few Teng Dato’ Jaganath Derek Steven Sabapathy Mr. Goh Hock Jin Mr. Albert Jayaraj A/L Thanimalai Ms. Yu Hong Tin Mr. Wong Yew Kiang Mr. Seet Hon Chiew Mr. Melwani Ashok Bhagwandas Ms. Mun Nga Lai Mr. Tan Wen Jie** Ms. Chow Yuet Kuen Mr. Lee Chee Full** Ms. Boon Yat Mee Mr. Sylvester Martin Emuang (resigned on 29 June 2020) Ms. Yong Mee Yan ** Up to 7 February 2020 - as disclosed in Note 44(a)(ii) to the financial statements. Remuneration Executive Directors: Directors of the Company: RM 3,349,000 (2020): RM 5,544,000 (2019) Directors of subsidiary companies: RM 7,052,000 (2020): RM 5,399,000 (2019) Non-Executive Directors: RM 649,000 (2020): RM 622,000
By the way year end 30th june 2020. Investment holding & trading make a loss of 49 million was mainly book losses from fair value investment. OCBC, Omesti, SYF and etc.
M&A, ICL and share of profit from associate companies will contribute stable profit,. The addition profit will depend on how Insas employs the cash hoard to generate profit from Investment holding & trading or just sell some inari share for the addition profit.
** Up to 7 February 2020 - as disclosed in Note 44(a)(ii) to the financial statements. Disposal of the Group's Singapore car rental division. Hopefully with the disposal will save on director and staff cost
New IPO: Building management systems (BMS), solar thermal systems and energy-saving services provider, Solar District Cooling Bhd aims to list on the Ace Market!
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....
stockraider
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Posted by stockraider > 2021-08-11 07:46 | Report Abuse
Good luck!