assets play may take a long time for value to emerge, it could be 10 years or 20 years down the road, and some never will (get privatized at a pittance).
if u keen to invest based on assets, best do it with a diversified portfolio. opportunity cost and value trap are key risks.
If that’s the case, it’s better shareholders request the return of capital and assets value to shareholders:
Cash - RM528mil - approximately 25 sen each share RHB shares - 5 OSK share give 1 RHB share OSK shares buyback in treasury - 115 OSK share give 1 OSK RHB dividend 2.5 sen per OSK
The rest can keep with the stock. Where’s Corporate Governance from Bursa.
If one read through the AR, it is interesting to note the following figures:
OSKH: revenue -1,204 M, PAT - 352 M
Contributions from OSKP: revenue - 192 M, PAT - 6 M PJDH: revnue - 966 M, PAT - 178 M
OSKH now owns 99.93% of OSKP, and 96.96% of PJDH
The non-RHB revenue and profit was mainly contributed by PJDH.
AR stated " There were significant restrictions on the Group's ability to use or access assets and settle liabilities of subsidiary companies with material non-controlling interest."
It seems the merger of OSKP and PJDH has not been totally successful as intended.
The normal distribution curve of OSK that the current price of RM 0.96 is as the tail of the curve, only very small percentage of share will trade at this level. The mean or the belly of the curve is at around RM 1.6 where the most likely of most of the share will trade. The fin of the distribution curve currently at RM2.2
Reading through details of the AR, it is clear that Faber Tower belongs to PJD which OSK owns 96.96%. Even if FT is sold, PJD must declare SD before OSK can have the money. The recent one-off gain of OSK came from selling PJD's Swiss-Garden Hotel at Pudu Road.
PJD is not declaring dividend for 2018 most likely because of the working capital required to develop Melbourne Square.
OSK holds 129 million PJDEV-WC which is expiring in Dec 2020 and will need RM129,000,000 for conversion. Hence SD is remote.
Truth that OLH is not visionary, focused to much on stock rather than business growth without release the truth value, shareholders value will go nowhere if not changed. But it’s not to late for him to change his mind to think a bit more visionary like to focus on business growth and same times let the shareholders values expand. The OSK still in a very good business fundamentals. No reason that he didn’t hope for the shareholders value to expand as he actually will get the most. Think win-win2 is what he need to get his double wins.
The supply and demand curves of OSK will be will weak below RM1, it’ll only able to get the most excited trading when moving forward to around RM1.25 then only able to get the excitement and attention from investment communities
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Fabien Extraordinaire
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Posted by Fabien Extraordinaire > 2019-03-26 17:56 | Report Abuse
assets play may take a long time for value to emerge, it could be 10 years or 20 years down the road, and some never will (get privatized at a pittance).
if u keen to invest based on assets, best do it with a diversified portfolio. opportunity cost and value trap are key risks.