Posted by txj89 > 2017-03-24 14:45 | Report Abuse

given their steady track record, decided to support abit hahahaha...

Posted by stulai2008 > 2017-03-24 19:03 | Report Abuse

Yesterday Someone very confidence said today the share will FLY ........

Posted by stockmanmy > 2017-03-24 19:33 | Report Abuse

fly wrong direction


but for me, I get chance to buy in at $ 15.80

Posted by vvvv > 2017-03-24 20:50 | Report Abuse

buy in done

Posted by paperplane2016 > 2017-03-24 23:36 | Report Abuse

Fly to 17,but some idiot sell down after reading some useless report.

Posted by paperplane2016 > 2017-03-24 23:36 | Report Abuse

I will buy more Monday.hehe

Posted by stockmanmy > 2017-03-25 00:34 | Report Abuse

scared of rights issue is quite understandable.

two kinds of rights issue, the bad kind and the good kind.

those selling believe it is the bad kind due to asset quality issues.

the good kind is when business so good they want more more money to do business.

place your bets.

Posted by Patrick Ngian > 2017-03-25 00:44 | Report Abuse

I think the right issue for raising Rm 432M is reasonable, mostly will convert to shares once I got it as the dividend yield now is higher than 3.5%( higher than coupon price)

Posted by paperplane2016 > 2017-03-25 00:52 | Report Abuse

Let me try understand why right issues now. AEOncr is an FI, they need to maintain certain regulation.
With mfrs9 adoption soon, they might have foresee higher reserve required. So they are doing pre steps now to pump up CAR. To avoid unnecessary cash call when next yr adoption happen. I believe most banks might do cash call next yr, or this yr end.

Posted by cyeec2000 > 2017-03-25 06:27 | Report Abuse

Aeoncr is non bank financial institutions will be subjected to mfrs9? also?

Posted by Patrick Ngian > 2017-03-25 07:48 | Report Abuse

Just want to clarify the proposals, assuming i have 1000 shares of Aeoncr , after the bonus issue( assuming approved by shareholder) , my shares become 1500 and i can choose to pay Rm 3000 to subscribe 3000 units of ICULS ( if i choose not to buy the ICULS, other ppl convert the ICULS my share will be diluted) . And i can choose convert 3000 to Aeoncr shares anytime before the maturity or wait for 3 years to collect 3.5% p.a and it will be convert to aeoncr shares on the conversion rate will decide later. I dont need to pay extra for the conversion to Aeoncr shares . Am i understand the proposal correctly?

Posted by pputeh > 2017-03-25 11:10 | Report Abuse

Good Morning Patrick. I think all you said is correct esp the dilution as if you don't take up the ICULS. you stand to loose out. However the conversion price for ICULS has not been fixed yet. Reading through seems its going to be anywhere between rm8.50 and rm10. This amount will deter many a small investor to raise . My 2 sens worth. Will be happy if others can advice

Posted by Patrick Ngian > 2017-03-25 11:21 | Report Abuse

Thank you for the reply. For the conversion price between 8.5 - 10 will be reduced to half after bonus issue right( if approved) so the conversion price will be between Rm4.25 - 5 . Assuming it's fixed at Rm 5 . For my 3000 units of ICULS can be converted to 600 units of Aeoncr shares after bonus issued right? I don't need to come up cash to do the conversion I supposed since I already paid Rm 3000 for the ICULS.

Posted by Patrick Ngian > 2017-03-25 11:56 | Report Abuse

Sorry the conversion price will be Rm 5.67 - Rm 6.67 ( after adjusted for bonus issue, assuming conversion price 8.5-10 before bonus issued) . So for my 3000 units of ICULS , if it fixed at 6.67 then I can get 450 units of AEONCR.

Posted by cyeec2000 > 2017-03-25 13:08 | Report Abuse

I think aeoncr still is good target to be invested, since their performance is better than bank. ICULS can provide opportunities for me to get more aeoncr shares with cheaper prices. If ICULS is subscribe,there is no dilution issue..

Posted by Patrick Ngian > 2017-03-25 13:43 | Report Abuse

For disscussion purpose , current the major shareholder Aeon financial japan hold 61.85% of aeoncr. If all other investors dont Subscribe ICULS, then the dilution effect will benefit AEON financial japan more.and will their shareholding will increase in percentage term? From 61.85% to maybe 70%?

Posted by SpaceNeedle > 2017-03-25 13:57 | Report Abuse

The illustrative price RM8.91 in the announcement has been adjusted after bonus issue. Yes, no payment needed to convert ICULS to ordinary share. The ordinary share unit gotten is the ICULS unit divided by conversion price.

Posted by Patrick Ngian > 2017-03-25 14:08 | Report Abuse

Hi spaceneedle . Thanks for clarifying . If the conversion price set at Rm 8.91, then I can get around 336.7 units of Aeoncr for 3000 ICULS. If the shares price at the time of ex-date is above 8.91 then it will be worth to susbscribe, if the shares price below 8.91 then I can always back cheaper at the market right?

Posted by stockmanmy > 2017-03-25 14:15 | Report Abuse

conversion has not been fixed yet....but whatever it is , there is dilution issue as long as you take up the Iculs.

the share price and the Icul will be adjusted ex all.

for illustration

1 share $ 17
3 ICULS 3
total $ 20

you get 4.5 share after conversion.

assuming no icul discount....the theoretical ex all price is....$ 4.44.

what about eps dilution?

eps comes down, but you get more shares....no problems there.


some more, the proceeds will immediately be put to good use and the roe is better than 3% ICUL interest so....taking into account ex all price, the eps will be enhanced.

the reported earnings will in future show basic eps and also fully diluted eps assuming full conversion of iculs.


in summary, no issue at all.

Posted by SpaceNeedle > 2017-03-25 14:17 | Report Abuse

The concept is correct. Bare in mind, this conversion price has been given 15% discount. So if the market price at that time is below 8.91+15% only you will loss.

Posted by stockmanmy > 2017-03-25 14:17 | Report Abuse

conversion has not been fixed yet....but whatever it is , there is no dilution issue as long as you take up the Iculs.

the share price and the Icul will be adjusted ex all.

for illustration

1 share $ 17
3 ICULS 3
total $ 20

you get 4.5 share after conversion. (assuming conversion ratio is 1:1)

assuming no icul discount....the theoretical ex all price is....$ 4.44.

what about eps dilution?

eps comes down, but you get more shares....no problems there.


some more, the proceeds will immediately be put to good use and the roe is better than 3% ICUL interest so....taking into account ex all price, the eps will be enhanced.

the reported earnings will in future show basic eps and also fully diluted eps assuming full conversion of iculs.


in summary, no issue at all.

Posted by SpaceNeedle > 2017-03-25 14:21 | Report Abuse

Yesterday, this stock was top 1 gainer in the morning and it became top 1 loser at close. Can't believe the sentiment of good or bad to a company can be changed so fast. It should be nothing regarding the right issue announcement. One of the possibility of this can be understood as this stock was sold-short by someone. If this was the case, in order to return the stock that borrowed, the one will buy them back in next few trading days gradually. As an investor, we should stand together not to sell stock to it.

Posted by Ricky Yeo > 2017-03-26 06:43 | Report Abuse

I don't know much about ICULS so I had a read through some papers.

https://mpra.ub.uni-muenchen.de/12764/1/MPRA_paper_12764.pdf

So the basic characteristics of ICULS is the annuity feature - you get 3.5% p.a for the next 3 years, and it is converted back to the mothershare upon maturity, hence called 'irredeemable'

The key point of the paper is that - they found that most ICULS issued in Malaysia are either overpriced and underpriced, or 50/50. Buying underpriced ICULS by right should result in superior return however that's not the case.

"First, not only do we not get superior returns, the returns are hugely negative. The simple, buy, hold and sell stock strategy is much superior...This we believe, is testimony to how inefficient the
market for ICULS are....why are the returns to the ICULS strategy so disastrous relative to their stocks eventhough they are underpriced?.. this must be because the ICULS are mostly out of the money, i.e., their exercise price is higher than the current stock price. Thus, a strategy of buying the underpriced ICULS though sensible, incurs losses when we then convert them to stock, by buying at the predetermined exercise price and selling them at the lower market prices. As such, while their being underpriced should provide positive returns, the substantial loss incurred on exercise leads to overall negative returns."

They did the same to overpriced ICULS by shorting them and buying it back later and produce the same negative results.

Although I must say the sample size is very small, only 34 ICULS are studied.

The main risks here are 1) Conversion price 2) Prolonged mispricing 3) Forced conversion.

Although they are likely to set the conversion price at 15% discount to market price, which at first, might sounds safe, cheap or whatever you want to call it. But i think the current price should not be used as an anchor given that outstanding shares will almost doubled when all ICULS are converted. Not to mention you will be forced to convert all ICULS regardless of the price at the time upon maturity, and dealing with mispricing.

Thoughts?

Posted by Tai KT > 2017-03-26 08:25 | Report Abuse

my understanding, iculs is a type of loan with interest after maturity it will auto convert to Mather share. You have to subscribe before ex. for the price rm1 with the way you entitled.
example, the iculs you have 3000 units and cost at rm1 per unit. so rm3000 cash value for the LA.At that time if share price is rm12 per unit. then discount 15% of rm12 is rm10.2. you 3000 unit of LA (rm3000 cash) allow to convert to 294units of mother share. No need to cash out extra money.

Posted by Tai KT > 2017-03-26 08:32 | Report Abuse

please correct me if I am wrong or I missed any info.

Posted by Patrick Ngian > 2017-03-26 11:43 | Report Abuse

It is all depends on the conversion price which they will decide later. According to the proposal is 15% discount from TEAP price. Indicative it was set to 8.91, so 432Million / 8.91 = 48Millions of new Aeoncr shares .

Posted by pputeh > 2017-03-26 11:45 | Report Abuse

Most of us here are speculating on the conversion price of the ICULS. This will only become clearer nearer to the ex date for the bonus. Lets wait. In the meantime the market will determine the price of Aeon Cr. Looking at hat happened on the first day it was euphoria on the first hour as there was a bonus. As the day progressed most players realized there was much money to be used to take up the ICULS. Hence the unhappiness and drop in share price. I see the share price dropping further as most retail investors are quite disappointed with this coperate exercise. However for institutions and long term investors it will be a plus

Posted by Patrick Ngian > 2017-03-26 13:21 | Report Abuse

I agreed with for institutional and Aeon Japan is a plus as they can pay no broker fee to subscribe more AEONCR shares by converting the ICULS.

Posted by Starynightccc > 2017-03-27 08:12 | Report Abuse

I think price will fly today
Rm17

Posted by OrlandoOil > 2017-03-27 08:43 | Report Abuse

Operating in difficult situation nid higher capital bt roe squeeze

Posted by SpaceNeedle > 2017-03-27 09:55 | Report Abuse

What you mentioned is correct. The good point is that this company is penetrating to the very very retail consumer market that is largely ignored by commercial banks. This creates enormous potential of growth to it, and we can see the company is aggressively to raise fund from everywhere including this time ICULS. The growth of relatively cheaper funds is proportion to company profit growth provided the NPL is well controlled.

Posted by Ricky Yeo > 2017-03-27 10:10 | Report Abuse

I think the potential and the growth of Aeoncr is not the issue here. The risk here is conversion price and mispricing. But it is far from saying buying ICULS is same as riding on the growth of the business because basically you are converting or 'selling' the ICULS after 3 years. The risk is on selling price. Put it to the extreme, if there's a big bear 1 week before conversion, and price becomes $3. convert you must at a loss.

And as the paper, if there's a high probability of mispricing, the ICULS will be out of the money for the entire 3 years compare to mother share, thus you won't have the chance to convert it, and upon conversion, you are actually losing money as compared to buying mother share.

Posted by face > 2017-03-27 10:12 | Report Abuse

shopping jusco

Posted by stockmanmy > 2017-03-27 10:15 | Report Abuse

ricky


where in the announcement is it stated that conversion price is to be fixed at 15% discount to share price?

why can't conversion be at 1 : 1 ratio?

Posted by SpaceNeedle > 2017-03-27 10:29 | Report Abuse

No right or wrong, because some are talking about Mr Market and some referring to Mr Business.

Posted by Ricky Yeo > 2017-03-27 10:36 | Report Abuse

http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=78532&name=EA_GA_ATTACHMENTS

Page 4, just hypothetical, not confirmed

Posted by Ricky Yeo > 2017-03-27 10:39 | Report Abuse

Exactly, if the market is efficient and the ICULS is priced correctly, and conversion price is 'right', then buying ICULS = buying normal share, since business value = market price. But this may not always be the case.

Posted by stockmanmy > 2017-03-27 10:47 | Report Abuse

ricky

what is wrong if you are given a chance to buy a share at 15% discount to the market?

there is no guarantee you will make money under all circumstances, but it is a head start.


in cases of projects with long gestation periods, rights issues some times results in eps dilutions for the gestation periods......in the cases of AeonCr where money is stock in trade.....the rights issues money will be put to good use immediately.

Posted by SpaceNeedle > 2017-03-27 10:55 | Report Abuse

The theory is absolutely correct. And I believe majority shareholders are still keeping the stock here because the company stock price is inefficient, undervalued with looking forward good future prospect, if not they have already sell them.

Posted by cyeec2000 > 2017-03-27 11:14 | Report Abuse

If their ICULS pricing is too high and mispricing.. The major shareholder won't be affected?

Posted by Ricky Yeo > 2017-03-27 11:53 | Report Abuse

There's nothing wrong, but there's opportunity cost. If the gain from subscribing to ICULS is unlikely to exceed (not equal or less) the gain in mother share upon maturity, there's no reason to subscribe, make sense?

Posted by cyeec2000 > 2017-03-27 12:03 | Report Abuse

But this will be same to apply to major shareholder right?

Posted by Patrick Ngian > 2017-03-27 16:22 | Report Abuse

Ricky I think you may miss out one feature about the ICULS , you can convert it to mother shares once you got the ICULS , no need to wait till 3 years for the maturity . And the conversion method is not by cash. Meaning you don't need to top up to convert to Aeoncr. It's just the money you pay to susbsribe the ICULS. For example , if you have 10000 Aeoncr now , you will need to pay Rm 30000 for ICULS . And how much shares you can convert for Aeoncr , it really depends on the market price they ex-date the ICULS and it said 15% discount from the market. So now I think they will be more seller then buyer in the market as ppl can rather wait to susbscribe the ICULS than buying Aeoncr now.

Posted by teoct > 2017-03-27 18:23 | Report Abuse

The (minimum) 15% discount to the TEAP for the conversion price is confirmed as page 4 of announcement said "shall". And it could be more, as it mentioned minimum and also the coupon rate 3.5% is also a minimum. So, both the discount and coupon rates can be more depending on the prevailing condition just prior to the announcement. Of course after announcement, the market can crash and the ICUL can be out of money.

But as a business, AEON Cr want to borrow money at about 3.5% to maybe not more than 4.5% (my guess). This is much lower than the 6.5% of the perpetuity (400m) or sukuk (400m) bonds of which AEON Cr only took (subscribed) 276m. So on worse case AEON Cr can still get 524m from this two bonds should the ICULs not go through. BUT I think, the ICUL make good business sense (lower interest compared to the bonds). So as shareholders, we should support and subscribe to grow the business (hence value thus higher share price). And if there is a market crash after the setting of the conversion price, buy more as it will be CHEAP SALE!!

Posted by Patrick Ngian > 2017-03-28 00:36 | Report Abuse

i think this ICULS proposal will get 100% support from AEON Japan firstly bcos i think their came out with this idea, secondly they hold 61.85% shares and it is like asking money from their parent to expand. Total raise fund RM432M ,minimum they will get RM267.19M from AEON Japan even without any investors to subscribe. Given japan yen interest rate is at negative rate now , it only make sense for AEON Japan to invest more oversea and 3.5% is very attractive to them( assuming ringgit will not weaken further against jpy). but to us local investors are not very attractive , as some banks offer FD rates higher than 3.5% p.a. I think the more discount they set for the conversion price also meaning that they desperately need the fund from the public. then market might react to crash the price as investors can also go out to buy later. personally i don't wish they set the conversion price higher than 15% discount. it will only make aeoncr price cheaper.

Posted by invest_101 > 2017-03-28 01:57 | Report Abuse

I think the multiple and discounts are quite irrelevant to my mind. Its the market capitalisation that matters. No reason for capitalisation to increase or decrease purely based on the matrix mentioned above.

Posted by Ricky Yeo > 2017-03-28 04:40 | Report Abuse

It is a good move for Aeoncr from business point of view, but business point of view can be different from ICULS holders point of view. ICULS holders are getting a bond + equity hybrid. First 3 years you get fix 3.5%, a bond like feature and not entitle for dividend or capital gain unless you choose to convert, and after conversion, you become a normal equity holder like the rest.

As a normal shareholder, if I can reasonably predict Aeoncr will become a $5 bil market cap company in the next 5 years, I can sit tight and don't worry about a thing. ICULS holder is different. The variable introduced to ICULS holders are conversion price and a 3 years timeframe which you hope the ICULS will be 'in the money' some point within the 3 years or you are not better off compare to a normal shareholder.

Think it differently, the 15% or whatsoever discount you are getting + the 3.5% p.a guarantee for ICULS is essentially a 'compensation' for those variables (uncertainty) - Conversion price and the market price over next 3 years. As a normal shareholders, you don't need to worry abt conversion price or what is the share price in 3 years time, because you will not be forced to convert. Or sell is another word to put it.

But on a side note, I suppose if you plan to hold Aeoncr for the next 10-20 years, whether you decide to subscribe or not to, and whether the outcomes turn out favourably or unfavourably, it is unlikely to be significant. Since as all put it, it is a weighting machine in the long term.

There are many that says Aeoncr price is inefficient, personally I like it, or else you won't get a swing of close to 30%, twice from $15 down to $10 over the past 2-3 years

Posted by Patrick Ngian > 2017-03-28 07:40 | Report Abuse

Hi Ricky. I also think that the market capitalisation for Aeoncr will increase for the next 5 years based on its earning and dividend growth . But this ICULS thing, if existing sharesholder don't subscribe then they will tend to lose out due to the dilution effect for those who susbsribed and got convert to new shares of Aeoncr with discount. If you wanted to support the growth by all mean susbsribe the right,as for me I choose to hold position on Aeoncr , so it's better for me to sell the amount they wanted to borrow from me in the market and use the proceed to susbsribe the right later to maintain my shareholding .

Posted by paperplane2016 > 2017-03-28 08:16 | Report Abuse

Just subscribe lah. Aeoncr is super well managed.

Posted by paperplane2016 > 2017-03-28 08:17 | Report Abuse

I rather trust Japan management than local low par manager here. Local all retard mind. Smart ones all migrate to Singapore, Australia and England