Posted by Ooi Teik Bee > 2016-09-27 10:43 | Report Abuse

Will Gamuda get more than the RM250 million offered?

Ans : RM 250 million is only 0.1 of price to book value. In all states of Malaysia, the takeover is done at 1.0 time of price to book value. The former Mentri Besar of Selangor is very unfair to offer the Splash at 0.1 time of price to book value.
Splash is asking for a fair price of 1.0 time of price to book value which is done in all states of Malaysia.
1.0 time of price to book value is > RM 2.5 billion.

Thank you.

Posted by Ooi Teik Bee > 2016-09-27 10:59 |

Post removed.Why?

Posted by hng33 > 2016-09-27 11:18 | Report Abuse

Agreed

Posted by bagan > 2016-09-27 11:53 | Report Abuse

dont worry MB has good relationship with Gamuda...hihihi remember Paya Indah Wet....

Posted by hng33 > 2016-09-27 12:23 | Report Abuse

Splash year profit alrdy reach 250m, and concession still have 15 yr long time. In fact, the best scenario is continue hold these golden goose.

Posted by upsidedown119 > 2016-09-27 12:55 | Report Abuse

Splash cannot be compared with Puncak as per the referred article. Puncak owned all the pipe network for water distribution. Building a whole new piped water distribution system will be too costly. Without a water distribution network, water cannot be sold. Whereas Splash's water treatment plant can be easily replaced. In fact the Government need not take over Splash's plant. The government can build a new plant and cut out or reduce water treatment volume to Splash to a minimum possibly below break-even. So Splash do not have much bargaining power. Please do not listen to those who have bought Gamuda at a low price and may have already secretly sold down! The only scenario for a profitable sale of Splash is for the federal government to buy it for more than RM1 billion. Will the federal government do it?!

Posted by upsidedown119 > 2016-09-27 13:03 | Report Abuse

The RM250 million is likely replacement cost for Splash's plant. At RM250 million, China can likely build a brand new ultra-modern plant. likely that's why both Khalid and Azmin did not offer more than RM250 million. All other Splash's assets are suspect since water business in Selangor had a sorry history of cronyism. Fed govt is nearly broke and cannot offer more. Politically also not feasible given the present controversies. At forced sale price of RM250 million, there will be a divestment loss of up to RM1 billion, Gamuda's profits will be wiped out for the next one and a half years or so. I would wait for the news on Splash's sale.

Posted by hng33 > 2016-09-27 13:21 | Report Abuse

A real funny twisting fact lolll upsidedown119....before even comment on your view, please search properly where is splash water treatment located!!?? it is locate in the Selangor Biggest water catchment dam, Sungai Selangor, the only big enough natural sungai for the state. There are total 3 major water treatment on these water catchment dam, SSP1, SSP2 and SSP3.

Splash control and own two treatment plant, SSP3 (capacity of 1050MLD ) and SSP1 (capacity of 950MLD). In total, SPLASH has a capacity of 2000MLD which is equivalent to 45% of the total water supply capacity in Selangor and the Federal Territory.

The upcoming langat 2 water treatment plant build at sky high cost and need to source and pay raw water intake from pahang only can supply 1130MLD and only ready in next 2 year.

With ever increasing demand for water in most dense state and federal territory , langat 2 new supply only merely can meet future next few year demand.

Even, state step up effort to cut Non revenue water through pipe replacement to cut down NWR from 35% to 25%, its still need to take time and these effort can only translate into better safety in water reserve margin from current critical level <5% to 15% level.

Posted by upsidedown119 > 2016-09-27 14:10 | Report Abuse

hng33, I have already replied to your old assumptions before. To summarise: 1) Water catchments are owned by the state not by Splash. State can divert water and create new reservoirs if necessary; 2) Sungai Selangor is only one catchment area. There are several others. A huge undeveloped one is Sungai Bernam; 3) With all these altenatives, and China waiting to pounce (likely already made offer the fed can't refuse), also with forced takeover under WASIA and a rapidly growing demand for water in Selangor, why should anyone pay more than RM250 million? I see a scenario where Gamuda will have to take the State and Fed govts to court - a long winded process! So for efficiency sake, it's WASIA or RM250 million! I would wait for the outcome of Splash's sale, latest Oct 7 2016.

Posted by upsidedown119 > 2016-09-27 14:15 | Report Abuse

And Splash's current super-profits are due to the generous rates the Selangor government agreed, under previous regimes, to pay. Will this continue? Those profits were squeezed out of the people under policies that amount to kleptocracy. That's why those RM1 billion plus 'receivables' are suspect and should not be paid, at least not fully! For 'normal' and fair profits of virtual water monopolies, please look at the profits PBA of Penang.

Posted by hng33 > 2016-09-27 15:17 | Report Abuse

1). Divert water and create new reservoirs......create another dam !? Create another tunnel !? Money needed lorrrr

2.) sungai selangor is the most and viable source of raw water for selangor....if selangor have alternative, then, why need to source from pahang....paid ink as fees.....build tunnel connect two state !?

3.) allow China to control Malaysia precious natural water !? Wasia..... Lose-lose situation lorrr.....and concession ownership still retain by splash, only operation can take over ....and can counter challenge in court.

4) super profit!? Yes, splash profit margin is between 80-90%, likewise, the took over Puncak niaga also reap 50-60% profit margin for water treatment buiness. Splash more superior profit margin than Puncak niaga is due to its more efficient operation, lower cost, and low borrowing cost incur. Last year, Puncak divest Puncak niaga resultant one off big investment gain to Puncak, all its receiveable and debt are assume by state. Likewise will happen to splash next

In short, upsidedown119.... Get a life, don twisting fact, be clear mind. Anyway, the time is already closer to outcome, either delay allowing splash to continue its concession, or new take offer price.

Posted by upsidedown119 > 2016-09-27 16:09 | Report Abuse

hng33, Answer to:
1) Why not? Alternatives are available. If not, just use WASIA. The people of Selangor will praise the fed govt for using WASIA - cheapest alternative for the people.

2) Sungai Selangor most viable? Maybe. Tunnel from Pahang was a political decision with the usual cronies involved; justified only from very long term perspective which is irrelevant. "In the long term, we are all dead" - Keynes.

3) Just because China builds a project China will control? What have you been smoking to make you jump to such a conclusion? As long as the project is on Malaysian territory, Malaysia will be in control.

3a) WASIA lose-lose? After WASIA takeover, concession will have nil value. Gamuda can challenge in court till the cows come home. In the meantime its share price will...?!

4) Splash's margin of 80% - 90% is daylight robbery of the people of Selangor with a lot going to dedak. PBA of Penang's is only 13%, comparable with overseas utilities. Is Splash more 'efficient' than PBA? I doubt it! As I have posted, Puncak had bargaining power, but Splash/Gamuda?

Please stop smoking what you have been smoking and get back to your medication. My life partly consist of helping people not get burnt by people like Koon and his agents. Koon was investigated in May 2016 for secret disposals of his shares by him and/or his agents without notifying the KLSE despite being a substantial shareholder. The resulting crash in the price of the shares which he recommended to others (e.g. Latitude etc) left him with massive profits and others with massive losses (I was not one of them though). The funds are to date net-sellers of this stock. I would wait for the outcome of the sale of Splash.
27/09/2016 15:58

Posted by Ooi Teik Bee > 2016-09-27 16:09 | Report Abuse

Mr Market is very efficient, any bad news, the stock price will reflect it.
Looking at the chart, the price of Gamuda is getting stronger.
All brokers in Malaysia are upgrading the stock price of Gamuda to a higher price.
Time will tell who is right.
Thank you.

Posted by hng33 > 2016-09-27 16:23 | Report Abuse

Upsidedown.....Get some medication for your ill mind....so that you can have clear mind on what is wasia!? Worse if really wasia involved, It can only to force take over operation, but NOT splash concession right, in which profit after deduct operation cost will still net to splash.

Posted by upsidedown119 > 2016-09-27 16:37 | Report Abuse

Then why funds like Amanah Saham Bumiputra and KWAP are net sellers? Only KWSP, is net buyer. Brokers are brokers, especially those who also trade. They can make you broke if you let them. I am looking at the chart. Gamuda's price is caught in a narrow range in a holding pattern.All the key indicators show a holding pattern. I would wait for the concluding news on sale of Splash. The TP is high. There is time to cash in if the sale price is above RM1 billion. KPS may be a less risky counter to leverage on Splash's sale.

Posted by M168 > 2016-09-27 16:42 | Report Abuse

If wasia provoked, it not about splash anymore, the whole malaysia will be affected. All banks will have to increase borrowing rates due to unprecedented risk of the country. Malaysia will be downgraded right away!

Posted by hng33 > 2016-09-27 16:44 | Report Abuse

1). Alternative dam!? To build another dam incur a lot of cost, and if source of water is not enough, new dam will affect old dam water level....then...affecting existing water treatment plant SSP1, SSP2, SSP3....

2) Apparantly now, state gov is eagerly awaiting new langat2 to supply additional water to meet current shortage and future increasing demand

3) Award new dam, new water treatment plant to China in selangor !? Where is state money cover if without need to grant concession!? Even if state have fund, what is the cost to acquire splash vs cost to build another plant!?

4) as told earlier, wasia even involved, it only can take over operation, it cannot take over concesion right, profit after deduct operation cost still need to payable to concession holder.

5) high profit margin is due to agree traffic rate stated in concession, just like in any concession, like LDP, if wan to reduce, compensation will be reinstated. In addition, Puncak last year divest both entities, syabas and Puncak niaga which is also water treatment plant, and both reap one off divestment gain with all receiveable and debt assume by state.

Posted by ks5S > 2016-09-27 16:46 | Report Abuse

upside down think build dam using Lego bricks.

Posted by upsidedown119 > 2016-09-27 17:02 | Report Abuse

hng33 and M168.

1) If WASIA is invoked, there will very likely be no loss of confidence or increase in interest rates. Water industry is too small and takeover of utilities is common and expected since monopolies like water are sometimes more efficient under government than private control.

2) Selangor can easily grant another concession to China at rates that need not factor in payment for dedak. The concession to Splash can continue but with less and no increase in volume. Increase in volume can all go to the new concessionaire. China can build a plant and reservoir on say the Bernam within 12 months, together with pie links to the Selangor water grid! This way, the overall average cost of water can come down.

3) As I have posted, with Wasia, Splash's concession can lapse. Disagreement can be litigated. State can counter challenge the concession based on unfair practice of the previous regime and the interests of the people. That's likely one of the reasons why both Khalid and Azmin refused to pay more than RM250 million.

4) High profit margin due to agreed rates as in agreement between two thieving parties! That's why new Selangor regime is very unlikely to pay upon those 'receivables'!

I would wait for concrete news of sale of Splash.

Posted by upsidedown119 > 2016-09-27 17:15 | Report Abuse

And hng33, the concession with Splash can continue after Wasia but with lower rates and water volume. Instead of 90%, profit margin it will likely be reduced to 15%. at 90% margin of profit, it is a political bomb. The party that agrees to continue the present rates will likely lose the next election which is near. But I don't see any payment for Splash more than RM250 million. Can compromise to RM500m, which still means a divestment loss of RM750 million for Gamuda! hng33, you should stick with KPS instead of selling at thin margins.

Posted by hng33 > 2016-09-27 17:25 | Report Abuse

Hahahaha, upsidedown119 too negative minded.....loss oriented minded .....no wonder cannot profit in share trading....anyway, As told earlier, just wait for the outcome which is very soon, it can either delay and allow splash to continue exititng concession or revise upward offer price to or close to book value for shareholder approval in EGM

Posted by upsidedown119 > 2016-09-27 17:27 | Report Abuse

And ladies and gentlemen, a reason why brokers are called brokers is that they will make you broke if you follow them blindly. They are trading and they all have vested interest that likely conflict with your own. I would say it is better to break our heads to master the charts and financial statements than let them break our bank by following them blindly.

Posted by mhchai > 2016-09-27 17:41 | Report Abuse

Hi Ooi Teik Bee, If you believe Splash can be sold off at 1.0 time of book value, isnt that KPS will receive much more cash per shares given that KPS so much lesser total outstanding shares and without warrant as well ?

Posted by Ooi Teik Bee > 2016-09-27 17:58 | Report Abuse

I am so sorry, I did not keep track on KPS. I cannot advise you.
I focus on Gamuda only. I know very details about Gamuda.
Thank you.

Posted by Chelsea > 2016-09-27 18:00 | Report Abuse

Hi sifu ooi, thank you very much for the recomendation. I will hold it

Posted by hng33 > 2016-09-27 18:02 | Report Abuse

It's simple, both Gamuda and Kps are stake owner of splash, in which Gamuda control 40% splash, Kps control another 30% stake. The only different is Gamuda also involve in operation and management water treatment plant through Gamuda air, therefore, Gamuda aside derive profit through 40% stake profit sharing in splash, it also derive operation profit in managing splash water treatment plant

Posted by upsidedown119 > 2016-09-27 18:04 | Report Abuse

For the sake of everyone who have followed hng33, I hope I am wrong. Anyway I am here to inform as best as I can, not to 'fight' with anyone. Ok lah hng33, you are right I am wrong. You are the super profitable trader, I am just a sorry loss-making learner. But I am still learning lah.

Posted by Ooi Teik Bee > 2016-09-27 18:11 | Report Abuse

hng33,
You are also very knowledgeable on Gamuda.
Thank you for your input.

Posted by gr980com > 2016-09-27 18:20 | Report Abuse

thanks for sharing

Posted by upsidedown119 > 2016-09-27 19:06 | Report Abuse

Gamuda will get only 40% of the sale price for Splash. KPS will get 30%. KPS acquisition cost is much lower (don't have to pay for dedak) - only RM130 million. Any sale price more than RM434 million, KPS will gain. At sale price of RM434 million, Gamuda will still have divestment loss of RM900 million or thereabouts. Just my 2 sens worth.

Posted by upsidedown119 > 2016-09-27 19:20 | Report Abuse

So if hng33 is expecting a windfall of RM1 billion for Splash, why not bet on KPS? At Rm 1B, KPS will get RM300 million which is 60 sens per share. Gamuda will only get 16.5 sens per share. Fully diluted will be 14.2 sens per share.

Posted by upsidedown119 > 2016-09-27 20:10 | Report Abuse

@ks5S. It's reservoir not a dam as in hydro-electric dam. Reservoir is much easier to build. A hydro-electric dam needs huge volume of water to produce electricity. A reservoir is just to store water.

Posted by excelyou > 2016-09-27 20:32 | Report Abuse

Whoever is believe Gamuda, just add and whoever is don't believe , just sell.

Posted by upsidedown119 > 2016-09-28 10:49 | Report Abuse

Amanah Saham Bumiputra and KWAP have disposed a further 3,223,900 shares. Only Tabung Haji acquired 168,100 shares. All done between 14-23 Sep, but announced on 27 Sep i.e. yesterday. Amanah Saham Bumiputra, the main Bumiputra unit trust was the heaviest seller recently.

Posted by hng33 > 2016-09-28 13:25 | Report Abuse

upsidedown119

Q1: Do you know whose is original and founder of splash in 2000?

Ans: The founder of splash are The sweet water alliance 40%, Gamuda 30% and KDEB 30%


Q2: Do you know what is paid up capital for splash ?

Ans: Splash paid up capital is consist of 170m ordinary share RM 1.00 each + 2.3m preference share RM 1.00 each. Therefore, total equity invested is RM 172.3m


Q3: Do you know how the Gamuda shareholding change ?

Ans: In 2005, Gamuda acquire additional 10% from the sweet water alliance for RM 135m, turning it become largest shareholder from 30% stake into 40% stake.


Q4: Do you know how the KDEB shareholding change to kps ?

Ans: in 2006, KDEB transfer its entire stake in splash to its subsidiary KPS for RM 130m. The move is to help KPS use splash stake as pledge to secure Islamic bond for RM 200m.

The transaction is related party transfer from right hand to left hand as it value 30% stake splash just for RM 130m vs. market transaction value 10% stake for RM 135m deal just a year ago between gamuda and the sweet water alliance.

Q5: Do you know now what is total investment cost for gamuda in splash now?

Ans: Original cost of investment in 2000, 30% stake RM 51.7m + additional 10% stake acquire in 2005 RM 135m = RM 186.7m


Q6: Do you know why gamuda stress it will incur divestment loss if splash deal at RM 250m instead of divestment gain if splash deal at RM 2.5 billion?

Ans: The said loss is refer to current value of the splash. If splash is market fair value at RM 2.5 billion, if sell at RM 250m now, of course it incur loss. In contrast, if splash sell at RM 2.5 billion, then, it will record massive gain from divestment.

In other word, for example, if you own a parcel of land that you bought at cost RM 100m, then, these parcel of land appreciated in 15 year, now, it value at RM 1 billion in accord to fair market value. If people force you to sell at RM 200m, you will alike call its a divestment loss of RM 800m . But, if people offer you some discount and you sell at RM 900m, then, you will book in handsome one off profit gain RM 800m. UNDERSTAND the LOGIC

Posted by Ooi Teik Bee > 2016-09-28 13:39 |

Post removed.Why?

Posted by hng33 > 2016-09-28 13:43 | Report Abuse

Investment is for return, 15 year investment if divest now must record its present value market value as assets appreciate over the time and asset value is BACK by book value. If assets cannot divest at market value or close to market value, in business, it call divestment loss, instead of investment gain.

Posted by imoogi99 > 2016-09-28 14:15 | Report Abuse

October is just around the corner and we will know everything soon....results should be out soon too. Enjoy the flight or enjoy the turbulence...ha ha ha.

Posted by upsidedown119 > 2016-09-28 15:02 | Report Abuse

hng33, you don't understand accounting for fair value. It will be too much for me to explain to you accounting for fair value. Just a hint: Gamuda's equity in Splash is not about land. Gamuda will have to carry in it's books assets like equity in Splash at acquisition costs - a portion of which can be in the form of Goodwill on acquisition (also regarded as an asset to be amortised). As for KPS, whatever the reasons, KPS still acquired 30% of Splash at RM130 million which is a bargain as compared with Gamuda.

And NEVER say never as far as the future is concerned. If a 'fact' needs confirmation/verification, it is NOT yet a 'fact'. I would wait for the facts on the final news on the sale of Splash.

And if I want to bet at less risk, I would bet on KPS.

But hng33's known habit, being a front-running super 'one night stand' trader, is to will sell KPS at thin profit margins. I would say to follow his advice for some stocks, especially the much touted Miss Universe stocks, which can be secretly disposed of, and also have histories of secret disposals!

Posted by upsidedown119 > 2016-09-28 15:08 | Report Abuse

And hng33, even if Gamuda reevaluated its investment in Splash for 'fair value', Gamuda will have booked the fair value adjustments as profits in the past. So now if Gamuda have to book a divestment loss, the loss will have to be written off in one lump sum in the financial year of sale of Splash. This will of course impact Gamuda's profits for the foreseeable future, depending on the size of the divestment loss.

Posted by upsidedown119 > 2016-09-28 15:16 | Report Abuse

And third party evaluation of Splash's value is not arbitration. Third party recommendations will still need to be accepted unlike arbitration which all parties must accept. The question remains: Will Selangor pay more than RM250 million, much less the RM2.5B demanded? If not, will the near-bankrupt fed govt pay? To me, for the fed govt or for any party to pay RM2.5B, is a long shot!

Posted by upsidedown119 > 2016-09-28 15:29 | Report Abuse

hng33, based on the info you provided, KPS acquired 30% of Splash for RM130 million. Sweet Water Alliance sold last year 10% for RM135 million or 3.1154 times more than KPS's acquisition costs. That's why KPS is a less risky bet than Gamuda if want to leverage on windfall from sale of Splash!

Posted by hng33 > 2016-09-28 16:04 | Report Abuse

bought back more gamdua-WE at 1.38

Posted by hng33 > 2016-09-28 17:00 | Report Abuse

last min, all balance order also match at 1.38

Posted by hng33 > 2016-09-28 17:18 | Report Abuse

With today increase back stake, top back volume that sold earlier, Gamuda-we resume back my top holding in portfolio.

Posted by hng33 > 2016-09-28 17:28 | Report Abuse

Gamuda once again closed at 4.90, gestate many time alrdy, due to get ready back above RM 5.00.

Posted by hng33 > 2016-09-28 17:33 | Report Abuse

Upsidedown119

Since you are too negative minded, bias and self center, as told earlier, just wait for the outcome which is very soon, it can either delay and allow splash to continue exititng concession or revise upward offer price to or close to book value for shareholder approval in EGM.

Posted by ymtan > 2016-09-28 18:01 | Report Abuse

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5217065

Posted by ymtan > 2016-09-28 18:02 | Report Abuse

PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY

Posted by Mgician > 2016-09-28 18:20 | Report Abuse

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5217209