Posted by shareinvestor88 > 2018-02-25 12:28 | Report Abuse

Sell TP 50c

Posted by bluebiznet > 2018-02-25 12:41 | Report Abuse

Sell to me please 0.60 ok

Posted by shareinvestor88 > 2018-02-26 00:08 | Report Abuse

ok ok sell to u 50c

Posted by bluebiznet > 2018-02-26 00:39 | Report Abuse

Paiseh lah... We dont know each other... Your offer is too good. 0.55 ok already. Deal!

Posted by Jon Choivo > 2018-03-08 01:54 | Report Abuse

I just did the IRR and NPV for WCEHB.

Wow, just wow. Now i know why felicity dare to hold for 3-4 years with no movement.

Posted by CK888 > 2018-03-08 15:19 | Report Abuse

Would you be kind enough to elaborate a little bit of your findings? Thanks.

Posted by Jon Choivo > 2018-03-08 19:15 | Report Abuse

Using my conservative calculation. NPV or FV is 2.61.

This assumes that the highway is not as good as litraks, plus or duke.

It also assumes zero growth in traffic. 4.5% discount rate.

Its one of the better bargains KLSE. One of the best actually if you don't just look at quantitative value but the business as well.

I may write a blog post on this some time. But we'll see. Not like it needs any catalyst. 2019 will start to shoot. Ill build my position in the meantime.

If we think this highway got an IRR of PLUS for example. And add in 2-3% growth per annum (in line with economy).

The valuation for it goes absolutely insane.

Of course malaysia could just die and go bankrupt, like Venezuela, in which case, we all gg anyway.

My bet, this is one of those, it takes longer than you think to happen. But when it happens, it happens faster than you think it could. Once you really understand this business and the NPV.

You wont sell. Even if it go up to 1.6 suddenly. Because you know what its really worth, and you're scared it wont come down but keep going up without you. Unless you are a trader of course.

Posted by CK888 > 2018-03-09 14:41 | Report Abuse

Thank you for your kind explanation.
Very much appreciated.

Posted by paperplane > 2018-03-09 14:44 | Report Abuse

Jon, I like your analysis, not bad

Posted by paperplane > 2018-03-09 14:44 | Report Abuse

I just did the IRR and NPV for WCEHB.

Wow, just wow. Now i know why felicity dare to hold for 3-4 years with no movement.

Exactly.

Felicity recommended Airasia, Ekovest, WCE. Just hold longterm will do. no need trade in and out

Posted by paperplane > 2018-03-09 14:56 | Report Abuse

It might not generate profit so fast as first few years still got maintenance this n tht. 2020 might be the bull year for it

Posted by veln82k6 > 2018-03-10 20:23 | Report Abuse

New high way unlikely to have high maintenace cost ..just look at ekovest new highway aldy know...The problem is traffic volume only

Posted by trulyinvest > 2018-03-18 22:44 | Report Abuse

Tomorow gap up

Posted by trulyinvest > 2018-03-18 22:45 | Report Abuse

New undersea highway from bagan dato to sumatra wil link to wce

Posted by sheep > 2018-03-27 01:51 | Report Abuse

finally,

WCE Holdings makes cash call to fund additional cost of West Coast Expressway

http://www.theedgemarkets.com/article/wce-holdings-makes-cash-call-fund-additional-cost-west-coast-expressway

Posted by tiptop168 > 2018-03-27 08:58 | Report Abuse

Is good news?

Posted by trulyinvest > 2018-03-27 10:38 | Report Abuse

sold all 1.09. thx

Posted by trulyinvest > 2018-03-27 10:39 | Report Abuse

in this tough market, still need shareholders money.. useless.

Posted by Jon Choivo > 2018-03-27 14:35 | Report Abuse

It was expected.

tiptop168 Is good news?
27/03/2018 08:58

Posted by Jon Choivo > 2018-03-27 14:40 | Report Abuse

1 Warrant for 3 RCULS
5 RCULS for 6 shares.

So if you buy, you need to buy shares in 1,800 sizes, Ensuring you get all the RCULS and Warrants. Which in this case will be 1500 rculs, and 500 warrants.

So at 0.5 per RCUL. You need to pay RM750 per 1,800 shares.

Posted by Mar Yung Chern > 2018-03-27 15:08 | Report Abuse

Hi job choivo,

thanks for sharing,

May i have some question about it? Let's say if i have 72000 unit, i can get 60000 rculs and 20000 warrant if i pay 60000*0.5=RM30000 to subscribe LA is it?

So if i want convert to share, i need to pay 60000*0.34= RM 20400 within 2years, is it correct?

Posted by Jon Choivo > 2018-03-27 15:14 | Report Abuse

Yes may, exactly.

Posted by Mar Yung Chern > 2018-03-27 15:19 | Report Abuse

Thanks,

so do you think it is worth for this rculs? but why market reaction to is as negative

Posted by sheep > 2018-03-27 15:21 | Report Abuse

wait for 0.90

Posted by sheep > 2018-03-27 15:32 | Report Abuse

means now company wants ur money (ex date) and korek from you again two years later...
you all got influenced by so so blogger.

Posted by Jon Choivo > 2018-03-27 15:48 | Report Abuse

https://klse.i3investor.com/blogs/PilosopoCapital/150357.jsp

From my calculation here, it is worth RM2.35 per share at minimum. I may need to recalculate it to take into account the potential dilution when the RCUL and warrants are converted.

If it truly is worth that much. I can see why all the major investors are ok with the 2-3 cash calls over the last 3 years.

Imagine, if 2-3 years from now, each share is worth 2.35 or more. This is a chance for the investors to buy more shares at a cheap price.

I dont mind the cash call, as i meant to increase my position from 3% to 10% anyway. I'll probably round up my shares for the cash call. And fill up the rest with the issued warrant or RCUL.

As always, if you think any of my assumptions in it is too rich, or i am coming from the wrong perspective, or discounting any potential risk too much.

Let me know. If i'm wrong, id rather sell now.



Posted by Mar Yung Chern > Mar 27, 2018 03:19 PM | Report Abuse

Thanks,

so do you think it is worth for this rculs? but why market reaction to is as negative

Posted by Jon Choivo > 2018-03-27 15:49 | Report Abuse

Market reaction is negative, because nobody likes cash calls, unless you have a proven track record at making alot of money. Like aeoncr.

WCEBHD, does not have that, at least explicitly. I think it does. So ill wait.

Posted by Mar Yung Chern > 2018-03-27 16:04 | Report Abuse

drop 12.5%,over reaction..

Posted by sheep > 2018-03-27 16:11 | Report Abuse

not over react. they got stuck with big number of shares and now got worried as they need to dump much much more money into it. no guarantee that the future is bright...

cash is king

Posted by sheep > 2018-03-27 16:41 | Report Abuse

after ex date, price will average down

Posted by newbie911 > 2018-03-27 19:00 | Report Abuse

Jon choivo, ur portfolio very heavy with wce, will u suggest to buy on weakness?

Posted by traderman > 2018-03-27 19:32 | Report Abuse

lol. is not over react. is smart people throw to pretend smart one

Posted by PotentialGhost > 2018-03-27 20:16 | Report Abuse

Najix umnx need money to election ， they black money private fund sell out in stock market just wan money to election,will continue to drop

Posted by sell > 2018-03-27 20:32 | Report Abuse

Toll still no income so RI easiest way out to ask for money?

Posted by Jon Choivo > 2018-03-27 21:01 | Report Abuse

WCEHB is only 3% in my current portfolio. Its very heavy on RCECAP and Timecom ahah.

I'm not a fan of this structure. Assuming all the warrants and RCULS is to be converted, which it will considering the timeline, the price and the prospects of the company. You are looking at a 111% dilution.

Using my most conservative estimate. And assuming all RCUL and Warrant conversion done at RM0.84 and RM1.04.

Intrinsic value of RM2.35 per share, turns into RM1.58, fully diluted.

Previously, lets say you hold 1,800 shares. At a cost of say 1.11 each. You paid RM2,000 for what is worth intrinsically, RM4,230. Margin of safety of 53%.

Lets say you fully subscribe to the cash call, convert RCUL and Warrants.

You now hold 1,800 shares, 1500 RCUL and 500 Warrants.
Your cost is now,

RM2000 for the shares
RM750 (0.5*1500) for the RCUL and Warrants
RM510 (1500*0.34) for the conversion of RCUL
RM520 (500*1.04)for the conversion of Warrants.

You paid RM3,780 for what is potentially worth RM6,042 (3,800 shares X RM1.59). Margin of safety of 38.5%. Much less lucrative imho.

But lets say, you manage to buy up more of the warrants and RCULS during the issue. Could be worth quite a bit.

The 5 year tenure of the RCUL and 10 year tenure for the warrants is insane.

Id much much rather, they just do a bog standard RI share placement. Or, sell the rimbayu and make this a pure highway co.





Posted by newbie911 > Mar 27, 2018 07:00 PM | Report Abuse

Jon choivo, ur portfolio very heavy with wce, will u suggest to buy on weakness?

Posted by Jon Choivo > 2018-03-27 21:03 | Report Abuse

I wish more people would do right issue like how aeoncr did. So little dilution.

Posted by veln82k6 > 2018-03-27 23:26 | Report Abuse

If i dont want to subscribe to right issue just sell or what ?

Posted by newbie911 > 2018-03-27 23:30 | Report Abuse

111% dilution...better run.

Posted by Felicity > 2018-03-28 00:13 | Report Abuse

Jon

If I create another structure:

For every 12 shares owned, the rights is to purchase 5 RCULS at nominal value of RM1.00 and conversion price is RM1.68. No warrants.

Is there less dilution? No, it is similar.

It is same just that there is no sweetener (warrants).

The structure is much the same, whether more shares or less shares is the same. What WCE needs to have is to raise RM634.44 million as in Page 7 of the announcement. However structure it creates, it needs to raise that amount. In fact, through this it allows the group to raise 2 to 3 times in one exercise. 1st the 50 sen, 2nd the 34 sen and perhaps warrants.

Hi Vein82k6

If one does not want to subscribe, there is a period where you can sell the "excess" shares.

Of course, do not listen to me as I have caused many not to make money through this shares.

Posted by Jon Choivo > 2018-03-28 01:34 | Report Abuse

Felicity,

Hmm, I think you are right. Using your structure

For every 12 shares owned, the rights is to purchase 5 RCULS at nominal value of RM1.00 and conversion price is RM1.68. No warrants.

FV of 2.35, diluted will be RM2.15 ((2.35*1200)+(1.68*500)/1700)

Cost of investment:
1200 shares at RM1.11 = RM1332
500 RCULS at RM1 = RM500
Conversion of 500 RCULS RM0.68= RM340
Total: RM2171

FV after dilution: RM3660 (1700*2.15)

Margin of safety: 41%

The margin of safety remaining after using your structure is higher probably due to less cash called on a percentage basis 63% vs 89%.



In my research, when I provided for the additional funding. I did not specify if it is borrowings or equity based.

This i think, fattened up the margin of safety in my calculation a bit. Since it did not take into account the intrinsic value per share and how it will be affected if money was raised via equity while prices are at low valuations versus a loan.

This is why ladies and gentleman, you always make sure you have a large margin of safety, so that when you screw up your calculations, its still a good investment!

Having said that, I think the sheer margin of safety (37% despite using only 8%IRR and other conservative estimates such as zero growth etc) still makes this a really good investment.

I think ill buy some tomorrow. Felicity, would you prefer the warrants after the cash call, or would you rather buy more now and go through the cash call?

Posted by newbie911 > 2018-03-28 08:29 | Report Abuse

Waiting at Rm0.5 to buy, safer.

Posted by paperplane > 2018-03-28 08:33 | Report Abuse

felicity, you are GUY or LADY. people keep questioning, address you wrongly...miss or mr.

Posted by Mar Yung Chern > 2018-03-28 08:53 | Report Abuse

hi jon,

If decide not to subscribe right issue, is the fv dilution same as your calculation or even worse?

Posted by trulyinvest > 2018-03-28 09:45 | Report Abuse

bought 0.90 sold 0.915. thx

Posted by Jon Choivo > 2018-03-28 10:01 | Report Abuse

If you dont subscribe.

Purchase cost: 1800*RM1.11 = 2000
Value of your shares: 1800*Rm1.58 = 2844
Margin of safety:30%

You will be diluted to the favor of shareholders who subscribe.



Mar Yung Chern hi jon,

If decide not to subscribe right issue, is the fv dilution same as your calculation or even worse?
28/03/2018 08:53

Posted by veln82k6 > 2018-03-28 10:15 | Report Abuse

Since the warrant can be sell i think the margin is higher..

Posted by Jon Choivo > 2018-03-28 10:17 | Report Abuse

yeah, mine takes only the super long term investor perspective.

For the traders etc, theres alot to be made selling the warrants etc when sentiment turn good during when the highway is completed.

Posted by uptrending > 2018-03-28 10:23 | Report Abuse

Just because the company needs to raise equity for the project as expected, those "investors" threw out their shares.

Ha!

It is real opportunity for real investors..

Bought yesterday afternoon and this early morning!

Cheers!

Posted by Felicity > 2018-03-28 10:50 | Report Abuse

Basis of determining and justification for the conversion price of the RCULS
The RCULS will be issued at 100% of its nominal value. The conversion price of the RCULS for each conversion period (“Conversion Period”) will be determined and fixed by the Board, and announced by the Company at a later date (“Price-Fixing Date”) after the receipt of all relevant approvals for the Proposed Rights Issue but before the Entitlement Date.
The conversion price will be determined after taking into consideration, among others, the following:-
(i) the theoretical ex-rights price (“TERP”) of WCEHB Shares, calculated based on the five (5)-day volume weighted average market price (“VWAMP”) of WCEHB Shares immediately preceding the Price-Fixing Date;
(ii) the conversion price for each Conversion Period will be at a discount of at least 15% to the TERP;
(iii) the historical share price movement of WCEHB Shares;
(iv) the earnings potential of WCEHB and its subsidiary companies (“WCEHB Group”) as well as its 40% associate company, namely Radiant Pillar Sdn Bhd (“RPSB”); and
(v) the overall funding requirements of WCEHB Group over the next five (5) years.

Look at Item (ii) - conversion price will be at discount of at least 15%.

Posted by Felicity > 2018-03-28 10:54 | Report Abuse

If WCEHB drops below 80 sen, the exercise structure has to be changed.

This exercise is a fair one for all investors with a tinge of creativeness and cheekiness.

If the company does a private placement, it will be even more unfair. This exercise calls for participation from all.

The fund raising is non-negotiable.