@nixonteh85 spoken like a true pro. Except it's very hard to catch the timing. Better to buy companies that open straight away limit down. Then wait til noon session recover.
Size does matter in this industry. The bigger market share you have, the more say and control on pricing ( subject to some control from MCMC), delivery channels, and resource sharing.
No wonder Digi shoot up today, only thing is whether can materialise or not, still got hurdles 1) shareholder approval 2) regulatory approval.
Shareholder approval is more or less a done deal.
If regulatory approval is obtained, another leg up.
Should sell once news of regulatory approval is obtained..now holding and enjoy the up ride.
When merged, many cost savings will be met. Share price will then rise.
One example is the digi and celcom stores at nearby shopping centers. At puchong, Celcom is renting at setiawalk's ground floor and digi is renting at ioi mall's ground floor. Both is nearby. Monthly rental is at least rm15,000 to rm 20,000 per location.
Digi ebitda is 800m from annual report. Celcom is sightly lower but almost the same as well.
Now when both merged into one company, the subscribers are lumped together. The earnings are combined as well, which makes it just a little less than double. The dividend will also increase almost double.
Blind man also can tell you shares will rocket to the moon. Shareholders confirm will approve this no brainer. The only hurdle is MCMC approval lo..
Price rise today will not fall next week. At worst, price remains the same. Today rise 0.70, It would suprise if next monday drop 0.70. Even if no worker is retrenched as promised by axiata, savings can be made as follows.
1) Reduced rental - Digi renting at ioi mall, puchong. Monthly rent rm 30,000 for 2 lots at ground floor. Axiata renting at setia walk, puchong one lot. Monthly rent 12,000. When merged , no need to rent the above 2 locations. Just rent one. Above is for puchong only. If you add whole of malaysia, substantial savings can be made.
2) Advertising. No need to advertise twice at tv/ newspaper etc. Just advertise one time for merged company.
3) I.T. costs. No need to maintain 2 I.T. systems. When merged , just need one I.T. system.
4) Office/ warehouse costs. No need so many warehouse and office.
Means they will further cut redundant cost which will help earnings. Look at today volume, epf and big funds sapu, surely have high probability of merger. It will hover until June then u will see rocket reach the moon when MCMC announce confirmation.
If going by latest reported earnings from 2020 covid, the merger would most probably push share price above double the current value because both telco earnings almost the same, meaning double profit = double dividend. The question is, after merger and reissuance of new shares, what's the par value and what's the quantity of new shares issued. Now too early to tell, but the value will double, just don't know the price per share until they reveal the quantity and new capital of the merger.
dompeilee Bought 8 lots of DIGI for the dividend. 23/02/2021 3:01 PM
Now got a fat floating capital gain to accompany the fat dividend earned in March...plus SOLD most of my short-term Supermax holdings bought in March near the TOP this morning...will sleep very well this weekend! =)
I know Stockisnotfun wants down because he sold his shares already. Want down because buy back cheaper. This type of analysys, early morning wet market got a lot of experts there. Zzzzzzzzzzzz
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....
Stockisnotfun
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Posted by Stockisnotfun > 2021-04-09 12:06 | Report Abuse
I am more interested what happened for both digi and axiata shares after merge? Both market shares combined based on last closing price?