Posted by observatory > 2021-09-29 13:31 | Report Abuse

I just read the CGS CIMB report, written by the analyst who has abruptly changed his position after Scientex's offer on 9/13. To recap:

6/23: TP RM3.83 based on 18.6X CY22F P/E
9/13: TP RM2.75 after cutting FY7/22-23F EPS by 21-34%
9/23: TP RM2.70 based on Scientex's offer price.

Now the TP trajectory is complete.

The title of today report is "short of expectations". But further down it wrote "FY7/21 core net profit was 6% short of our full-year estimate". Usually analysts will consider results within +/- 10% of their forecast as within expectations. This is another example of conclusion driving the headline.

Supporting Scientex's offer, the report has added warning that "Even if Scientex does not manage to attain 90% of Daibochi’s shares, the former will not look to comply with Bursa Malaysia’s public shareholding spread, and investors could be stuck with illiquid shares"
(Note: Low liquidity concerns are more for the institution clients. Typical retail investors don't hold millions of shares and therefore can get in/ out without moving the share price)

But the analyst failed to notice that after two weeks of offer, until yesterday Scientex only managed to get a miserable 4.47% shares, increasing its holding from 61.88% to a mere 66.35%.

Besides, if the analyst is concerned about the low liquidity, why would he has recommend a buy call just three months ago while the public float only differ by a few percent?

Posted by hpcp > 2021-09-29 13:43 | Report Abuse

Investor420: Besides, you can still own daibochi by buying Scientex...

Hello... Do you know Scientex's biggest earnings contributor in recent years is property and not packaging. Not all investors like property business.

Posted by dragon328 > 2021-09-29 15:34 | Report Abuse

As I expected, CIMB analyst lowered its target price for Daibochi to RM2.70 very conveniently in his update report on Q4 results.

However, what bewilders me is his change of stand from a supposingly neutral position to a strong advice for investors to take the offer from Scientex. What has changed in Daibochi's fundamentals in past few weeks that renders a drastic change in his recommendation from a high conviction Buy call to an Accept Offer call? It is a big slap on his own face. If Scientex raises the offer price next week, would he change his projections and target price again?

He did not bother analsying the drop in EBITDA margin nor updating the cash flow projections with latest capex spent, but just the easy route of asking clients to accept the offer. Lazy fellow.

Posted by dragon328 > 2021-09-29 15:47 | Report Abuse

@observatory, well said about the liquidity issue below.

I agree with you that it will not make any difference in terms of liquidity for retail investors of Daibochi even Scientex raises its stakes to 70% by end of the offer period, compared to a stake of 61.88% before the offer.

I do not mind for Scientex to raise its stakes in Daibochi as much as it likes but I just hope that it will maintain the listing status of Daibochi even with 25% - 30% free floats. After the offer period ends, Scientex please withdraw the privatisation offer and let the market decides the fair value of Daibochi.

If it drops back to RM2.20-2.30 level, then everybody including Scientex would be free to add more positions. If it goes past RM3.00 then it simply indicates the worth of Daibochi and makes many shareholders (including Scientex that will have higher stakes then) happy.



Supporting Scientex's offer, the report has added warning that "Even if Scientex does not manage to attain 90% of Daibochi’s shares, the former will not look to comply with Bursa Malaysia’s public shareholding spread, and investors could be stuck with illiquid shares"
(Note: Low liquidity concerns are more for the institution clients. Typical retail investors don't hold millions of shares and therefore can get in/ out without moving the share price)

But the analyst failed to notice that after two weeks of offer, until yesterday Scientex only managed to get a miserable 4.47% shares, increasing its holding from 61.88% to a mere 66.35%.

Besides, if the analyst is concerned about the low liquidity, why would he has recommend a buy call just three months ago while the public float only differ by a few percent?

Posted by observatory > 2021-09-29 16:24 | Report Abuse

@dragon328, the CIMB analyst has covered himself with the statement "a higher offer price from Scientex is an upside risk". So he will never go wrong :)

Posted by dragon328 > 2021-09-29 17:51 | Report Abuse

Haha his image is already tarnished anyway.

I thought he was pretty sure of no revised offer from Scientex when reading the headlines of his report, until I saw this sentence.

I am afraid he might need to shoot a bullet on his own foot again in 2 weeks time.

I am pretty sure now Scientex will revise up the offer price as it will not be contented with just additional 5%-7% stakes from this privatisation exercise. I remember Scientex did offer the offer price of RM1.60 for months after it acquired the controlling block from Daibochi's original major shareholder but did not receive much acceptance. Would it want to go through the same long but unfruitful process again for another few months?

It will be disruptive to the daily operations and expansion efforts of Daibochi while such a privatisation attempt is prolonged.

Posted by Skyfriend > 2021-09-29 18:06 | Report Abuse

Hi i am new , is it now have to wait for new offer from scientex ?

Posted by observatory > 2021-09-29 19:35 | Report Abuse

Haha, have to ask Lim Peng Jin. Nobody knows. But long term investors wouldn't be bothered. How's your JAG?

Posted by Skyfriend > 2021-09-29 20:01 | Report Abuse

Jag what ?

Posted by observatory > 2021-09-29 21:26 | Report Abuse

I read past comments to tailor my replies

Posted by anti_colonialists > 2021-09-29 21:55 | Report Abuse

Agree with @Investor420 that Daibochi performance improved a lot under Scientex.

I am just an observer here to enjoy good argument. @dragon328 claimed "I do not really see any improvement in Daibochi operations since Scientex took over control in 2019." Your claim doesn't make sense.

Beg to differ. For 5 years, 2013 to 2017, Daibochi profit gone no where up and down RM23 million to RM27 million. No growth for 5 years! After Scientex came in, look, net profit now consistently RM47 million for 2 years!.

In other words, Scientex took a 0 growth company, gave shareholders 70% net profit growth in 1 year. Now offer to buy over at much higher than original 2019 offer. Offer price is also around highest price for last 1 year.

Acquisition rationale in take over announcement said take over needed to restructure Daibochi and enhance operations because of COVID-19 challenges.

@dragon328, since you said "nobody is saying Mr. Lim cheating his shareholders", then is it possible that Mr. Lim is bailing out shareholders and trying to bring a win-win deal? As @Investor420 said "I believe under PJ Lim, it’s for the greater good, or Scientex wouldn’t have this run for the past 20 years".

The difference between both of your opinions, one seeing the world with broken lens and being taken for a ride, the other a level headed investor that trusts in a 20 year performance.

Back to Daibochi profit, how did RM20 million extra profit appear magically? @dragon328, your post trying to discredit @Investor420, saying there was no improvement under Scientex, does not make sense, and raises a question similar to @Investmon's concern of moles.

Are you one of Apollo's hired moles trying to create negative stories to sway the opinion of shareholders?

Posted by observatory > 2021-09-29 23:32 | Report Abuse

Wow. Another newly registered i3 forum user joining the discussion. Daibochi is getting popular. Welcome!

Note a big part of Daibochi's growth has come from the acquisition of Mega in 2019. Mega's earnings were immediately accreted to Daibochi's. This was the one off jump in revenue and earnings that was largely responsible for the recent growth story. Growth has mostly plateaued in the past 8 or 9 quarters since Mega's acquisition (partly due to the pandemic situation).

Still my compliment to the management and board then for the right acquisition decision and subsequent integration efforts. They have also embarked on major capacity expansion that should pay off in the next few years.

However, as in any major acquisition and expansion, it involves operational and financial risks. So the point is, after getting minority shareholders to share the risks, and now as the integration seems to be working out and risk receding, just when the capacity expansion is going to deliver results, the minorities are asked to get lost?

Do you mean the minorities should thank for a job well done by selling off their shares at an unfair price under the threat of delisting?

Don't the management and board members get paid for doing their jobs? Are they doing their jobs so well that those "ungrateful" shareholders should surrender their shares?

And now this is called a "bail-out"? Who has asked for the "bail-out" in the first place?

Just for disclosure again. While I'm a so called stubborn billis, rest assure I'm no mole of Apollo :)
You may check out my comment history. I'm passionate on many subjects, especially on the subject of fairness!

Posted by dragon328 > 2021-09-30 13:18 | Report Abuse

As observatory correctly pointed out, the increase in revenue and profits of Daibochi from 1QFY2020 onwards was clearly from the contribution of MPP acquired in August 2019.

A summary of Daibochi financials is listed below:

Quarter Revenue EBITDA Net Profit (RM million)
1Q2018 104.7 12.6 6.4
2Q2018 106.4 12.8 6.8
3Q2018 109.2 10.8 7.9
4Q2018 110.5 8.1 4.3
5Q2019 110.8 9.5 4.3
7Q2019(Jul) 123.3 12.1 7.6 (4 months as FY changed to July)
1Q2020 152.6 22.3 11.8 (first quarter after MPP)
2Q2020 159.0 26.4 14.6
3Q2020 152.0 22.5 11.9
4Q2020 155.8 23.6 15.2
1Q2021 156.7 23.3 12.8
2Q2021
3Q2021 150.1 18.9 10.3
4Q2021 133.7 10.9 8.9

In a note after the acquisition of MPP, the management indicated that Daibochi revenue was expected to increase to RM600 million and EBITDA to RM70 million within 1 year of integrating MPP. Credits to the management to have achieved what was indicated in Aug 2019. Possibly some credits to Scientex too as a big brother backer to Daibochi for this acquisition.

MPP financials were not bad with revenue of RM131.7m and net profit of RM7.0m in 2018, and revenue of RM128.8m and net profit of RM7.8m in 2017. The revenue increase for Daibochi from RM430.8m in FY2018 to RM619.4m in FY2020 was RM188.6m, way higher than the normal annual revenue of MPP before integration. EBITDA jumped by a larger quantum of 114% from RM44.3m in FY2018 to RM94.8m in FY2020 simply shows the cost synergies from integration (in areas such as bulk purchase of raw materials and sharing of marketing and distribution costs as per CIMB analyst report on 26 Sep 2019).

CIMN analyst then Ivy Ng in her report on Daibochi 7Q2019 quarterly results reported that since Scientex took over in Mar 2019, Daibochi management has managed to reduce inventory from RM93.9m in end Mar 2019 to RM62.4m as at end July 2019. That was probably one area where Scientex has helped Daibochi to improve on its working capitals.

In the same report, Ivy NG reported that Daibochi had been working with a domestic MNC F&B company on environmentally firendly packaging materials that do not use polyester. Then she reported on 6 Dec 2019 that Daibochi had commercialised its first sustainable mono-material laminate packaging material (MNL) for a major domestic beverage customer in Q1FY2020. Daibochi started using this new 3-layer MNL (polypropylene-based) compared to the earlier complex 5-layer structure and expected to secure more customers using this new MNL material by 4QFY2020. To me this is good reporting by Ivy Ng and good efforts by the management to develop new environmental friendly products.

Now, anti_colonialists, please highlight to me where else Scientex has possibly helped Daibochi to improve on its performance.

CIMB analyst Nigel Foo in his report dated 15 May 2019 reported management as saying that the potential synergies to be derived from integration into Scientex are:
1) lower material costs due to economy of scales and central buying at Scientex
2) improved efficieny at Daibochi's two factories in Ayer Keroh and Jasin Melaka, and
3) reduction in wastages at Daibochi's factories

Looking at the declining EBITDA margin of Daibochi in its quarterly results from Q1FY2020 to Q4FY2021, I do not see much cost saving in raw material procurement with Scientex, nor improved efficiency at its factories. Please prove us wrong here.




Posted by anti_colonialists > Sep 29, 2021 9:55 PM | Report Abuse

Agree with @Investor420 that Daibochi performance improved a lot under Scientex.

I am just an observer here to enjoy good argument. @dragon328 claimed "I do not really see any improvement in Daibochi operations since Scientex took over control in 2019." Your claim doesn't make sense.

Beg to differ. For 5 years, 2013 to 2017, Daibochi profit gone no where up and down RM23 million to RM27 million. No growth for 5 years! After Scientex came in, look, net profit now consistently RM47 million for 2 years!.

In other words, Scientex took a 0 growth company, gave shareholders 70% net profit growth in 1 year. Now offer to buy over at much higher than original 2019 offer. Offer price is also around highest price for last 1 year.

Posted by dragon328 > 2021-09-30 13:33 | Report Abuse

No shareholder here needs Mr. Lim to bail out. Daibochi was doing just fine without Scientex offering to privatise it.

I am not sure what your intention here is. I am just a minority shareholder of Daibochi and have been tracking this great company for years. Apollo does not need to place any mole here to sway investors' opinion, the fund is in good hands of Claire who had invested in Daibochi way before Scientex started big on its stretchable film business.

I just want to stay invested in Daibochi and ride on its expansion plan. Scientex is trying to get everyoeg off the plane with such a below-par offer. I cannot possibly influence other big investors by posting some comments here. The fact is that many others feel the same way as me, and not selling at this unfair offer price. As I write, some other big investors are queuing big buy volumes at RM2.71. I wish I had the capital to buy so much.



Posted by anti_colonialists > Sep 29, 2021 9:55 PM | Report Abuse

@dragon328, since you said "nobody is saying Mr. Lim cheating his shareholders", then is it possible that Mr. Lim is bailing out shareholders and trying to bring a win-win deal? As @Investor420 said "I believe under PJ Lim, it’s for the greater good, or Scientex wouldn’t have this run for the past 20 years".

The difference between both of your opinions, one seeing the world with broken lens and being taken for a ride, the other a level headed investor that trusts in a 20 year performance.

Back to Daibochi profit, how did RM20 million extra profit appear magically? @dragon328, your post trying to discredit @Investor420, saying there was no improvement under Scientex, does not make sense, and raises a question similar to @Investmon's concern of moles.

Are you one of Apollo's hired moles trying to create negative stories to sway the opinion of shareholders?

Posted by dragon328 > 2021-09-30 15:24 | Report Abuse

The current privatisation offer from Scientex is not doing any good to Daibochi nor its shareholders.

Recap that the senior management of Daibochi was rewarded with RM4.9 million for making through the acquisition of controlling stakes by Scientex in 2019.

As anti_colonialists and Investor420 seem to be speaking for Scientex, can you both please reveal to us how much reward will be paid to the senior management of Daibochi or parties in concert for making this privatisation deal through?

Please make sure any of such reward money should come from Scientex, and not charged to the accounts of Daibochi. It is a complete waste of money and time to Daibochi for such a non-sense privatisation offer to appear and drag on.

As shareholoders of Daibochi, we would be grateful for Scientex to withdraw its offer soonest and maintain the listing status of Daibochi.

Posted by cbkia4896 > 2021-09-30 16:07 | Report Abuse

2.71 B , 2.72 S... interesting, maybe an updated offer price soon?

Posted by iknownuts > 2021-09-30 16:35 | Report Abuse

@dragon328 are u referring to this announcement when u say Rm4.9m was paid to snr mng?

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=2929856

Posted by dragon328 > Sep 30, 2021 3:24 PM | Report Abuse

The current privatisation offer from Scientex is not doing any good to Daibochi nor its shareholders.

Recap that the senior management of Daibochi was rewarded with RM4.9 million for making through the acquisition of controlling stakes by Scientex in 2019.

Posted by observatory > 2021-09-30 20:04 | Report Abuse

Just now I read a comment from from yet another newly registered new user Censorship, claiming that his earlier user account anti_*** has been deleted. He accused manipulation of to suppress pro-Scientex view.
https://klse.i3investor.com/servlets/cube/post/censorship.jsp

Just when I got the time to reply, he has deleted his own comment.

This is my opinion. The arguments from both sides, whether in favor of the offeror (Scientex) or the aggrieved minority shareholders, should be most welcome as long as no abusive language is used. But there is no need to keep creating new user accounts for that purpose (Otherwise accounts could have been blocked for that reason, if they are indeed blocked).

Just disclose your interest for the benefits of all. Argue for all you can with numbers and reasons. Perhaps even come up with a valuation exercise to show that the offeror's price is fair. The healthy debate will benefit all, including myself.

No one should be paranoid about comments in this little forum could move the market! The market is more rational than a small group of retail investors. Even many of these so called billis are capable to think for themselves!

Posted by observatory > 2021-09-30 20:36 | Report Abuse

@cbkia4896, yes, I just checked the transaction volume. 1,262,500 shares changed hands at RM2.71 or even RM2.72, bought by parties other than Scientex given that Scientex is barred from bidding above its own offer price of RM2.70. Today transaction volume is larger than the past three days combined. Scientex acquired zero share today.

Not sure if any of the substantial shareholders were involved. If they did they would have to disclose their position soon. There could be other funds or deep pocketed parties.

However, this may or may not be the sign that Scientex will update its offer price anytime soon. It could be just speculative buying as other market participants see that this privatization exercise is failing.

Even though I myself have topped up since the first day of the offer period (I've disclosed that in my comment earlier), my opinion is anyone without sufficient understanding and conviction on Daibochi's long term prospect may want to stay at the sideline. Who know how long the process could take and whether Scientex may announce no revision in offer price, at least for time being, so as to encourage short term holders to sell out.

Posted by dragon328 > 2021-09-30 21:12 | Report Abuse

@iknownuts, yes the reward payment of RM4.86m was mentioned in this bursa announcement.

That reward payment (which was labelled as M&A transaction cost) was questioned by fund managers during the result briefing on 25 Feb 2019 attended by 40 analysts and fund managers. Such reward was rather unusual to the senior management of a company for selling the company controlling stakes at way below market price. That payment effectively dragged Daibochi into a loss for that quarter. What an outrage to Daibochi shareholders then.



Posted by iknownuts > Sep 30, 2021 4:35 PM | Report Abuse

@dragon328 are u referring to this announcement when u say Rm4.9m was paid to snr mng?

https://www.bursamalaysia.com/market_information/announcements/company...

Posted by dragon328 > Sep 30, 2021 3:24 PM | Report Abuse

The current privatisation offer from Scientex is not doing any good to Daibochi nor its shareholders.

Recap that the senior management of Daibochi was rewarded with RM4.9 million for making through the acquisition of controlling stakes by Scientex in 2019.

Posted by dragon328 > 2021-09-30 21:22 | Report Abuse

A good bonus could be rewarded to the senior management for a job well done in integrating MPP and delivering the revenue & profits growth, and possibly so for expanding the capacity by 60% within budget and delivering another wave of revenue & profit growth in next few quarters.

But it should have not been rewarded for selling the company controlling stakes to Scientex at RM1.60 in 2019 then, and now for helping Scientex to privatise it at again another sub-par offer price.

Posted by iknownuts > 2021-09-30 21:24 | Report Abuse

@dragon328 thank you for confirming this. I assume you are part of the select 40 analyst/fund managers, hence access to this “inside info”? Or you could be an existing/ex employee in diabochi? ;)


Posted by dragon328 > Sep 30, 2021 9:12 PM | Report Abuse

@iknownuts, yes the reward payment of RM4.86m was mentioned in this bursa announcement.

That reward payment (which was labelled as M&A transaction cost) was questioned by fund managers during the result briefing on 25 Feb 2019 attended by 40 analysts and fund managers. Such reward was rather unusual to the senior management of a company for selling the company controlling stakes at way below market price. That payment effectively dragged Daibochi into a loss for that quarter. What an outrage to Daibochi shareholders then.

Posted by iknownuts > 2021-09-30 22:26 | Report Abuse

@dragon328 i agree with what you said. This is just me thinking out aloud:

- if what you said re this 4.86m being paid by daibochi to snr management is true, it was done on or before 31/12/18. Scientex completed the share sale agreement on 19/3/19. So this was paid by daibochi to their management before scientx came into the picture. Meaning, the ex shareholders of daibochi (which was also the main decision makers in daibochi then) sanctioned this payout, and effectively screwed the shareholders of diabochi?

- as we all know when we sell a business, or even a normal property transaction, the seller always pay commission to a middleman/agent. Scientex bought daibochi shares from the ex shareholders in 2019 at RM222,500,425.60. Assuming a standard 2% commission, this equates to rm4.45m. Assuming other costs of legal, IA fees etc etc of 400k, could this be the “m&a” fee of rm4.86m you mentioned earlier? If this is true,why are the ex shareholders not paying out from their pocket, but instead from the books of daibochi?


Posted by dragon328 > Sep 30, 2021 9:22 PM | Report Abuse

A good bonus could be rewarded to the senior management for a job well done in integrating MPP and delivering the revenue & profits growth, and possibly so for expanding the capacity by 60% within budget and delivering another wave of revenue & profit growth in next few quarters.

But it should have not been rewarded for selling the company controlling stakes to Scientex at RM1.60 in 2019 then, and now for helping Scientex to privatise it at again another sub-par offer price.

Posted by observatory > 2021-10-01 01:10 | Report Abuse

@Collusion aka @Censorship aka @Anti_***,

Sorry to hear that your posts keep disappearing. You've implied someone exercising the i3 system administrator power to silence you.

That's your words. Readers like me have no way to tell whether it's true. I don't have such power nor connection. Whatever "collusion" that you may have imagined on my part can all be read in my prior comments. They are open for all to read!

Frequent i3 users also know how a post that has been deleted by system administrator looks like. The post does not disappear out of the thin air, just like when it's deleted by the user himself. Instead only the content is removed by the system administrator, marked with the message "Post removed." I don't see such sign in earlier comments. Check out other part of this forum you'll know what I mean.

Alternatively, it's possible that websites may have created safeguard measures that prevent newly created user accounts like yours from posting long messages right after account creation. I know certain websites have such control in place to prevent spamming. I suggest you write to the website support people to clarify.

Anyway, instead of getting distracted by your comments being removed, I look forward to your opinion and analysis in support of Scientex's offer.

Posted by observatory > 2021-10-01 01:15 | Report Abuse

@Collusion, I notice your post above stayed in the forum for over an hour. I also notice it was dated 01/10/2021 12:04 AM

Presumably you've created your account the day before and your current post is considered the next day posting. Let's see if it stays.

Posted by Investmon > 2021-10-01 10:21 | Report Abuse

thanks guys for the good analysis, now I am not sure if I should give in to the offer of RM2.70

Posted by dragon328 > 2021-10-01 10:24 | Report Abuse

@iknownuts, I was not among the 40 analysts and fund managers who attended the briefing by Daibochi on 25 Feb 2019. I am also not an employee or former staff of Daibochi, and I do not have any insider info. I got to know this info from an update report written by Nigel Foo, the CIMB analyst then who covered this stock. An extract of the report is reproduced below:

----------------------------------------------------------------------
4Q18 briefing highlights
● Daibochi’s 4Q18 results briefing was led by Managing Director Thomas Lim, Executive Director Low Jin Wei and CFO Tan Gaik Hong. Around 40 analysts and fund managers attended the briefing, similar to its 3Q18 results briefing. We believe investors are interested in the potential synergies with its new major shareholder Scientex (SCI MK). Scientex owns 42.4% stake in Daibochi and is undertaking a mandatory takeover for the remaining Daibochi shares not owned by Scientex.

Daibochi’s directors proposed to reward senior management
● One year ago, a European company was negotiating to acquire a majority stake in Daibochi. To allay senior management’s job security concerns with the emergence of a potential new major shareholder, Daibochi’s board of directors agreed to reward its senior management RM4.9m if there was a takeover of the company. Negotiations with the European company failed last year.
● However, in Nov 2018, Scientex Bhd proposed to buy a 42.4% stake in Daibochi, which led to a mandatory takeover of the remaining Daibochi shares not owned by Scientex. This led to Daibochi giving its senior management the RM4.9m reward, recognised as M&A costs in the 4Q18 results, it said.
-----------------------------------------------------------------------


Posted by iknownuts > Sep 30, 2021 10:26 PM | Report Abuse

@dragon328 i agree with what you said. This is just me thinking out aloud:

- if what you said re this 4.86m being paid by daibochi to snr management is true, it was done on or before 31/12/18. Scientex completed the share sale agreement on 19/3/19. So this was paid by daibochi to their management before scientx came into the picture. Meaning, the ex shareholders of daibochi (which was also the main decision makers in daibochi then) sanctioned this payout, and effectively screwed the shareholders of diabochi?

- as we all know when we sell a business, or even a normal property transaction, the seller always pay commission to a middleman/agent. Scientex bought daibochi shares from the ex shareholders in 2019 at RM222,500,425.60. Assuming a standard 2% commission, this equates to rm4.45m. Assuming other costs of legal, IA fees etc etc of 400k, could this be the “m&a” fee of rm4.86m you mentioned earlier? If this is true,why are the ex shareholders not paying out from their pocket, but instead from the books of daibochi?

Posted by anti_colonialists2 > 2021-10-01 10:39 | Report Abuse

I am back from censorship again. My second short post from new account 'Collusion' disappear immediately even after 8 hour wait before post and first post disappear with it.

I am not saying you @observatory are colluding with the website to censor my post. I am highlighting to level headed observers, how one sided story and main voice here to create perception that Scientex is unfair, can be engineered by master puppeteers.

Before I continue in new post, must share my disappointment some posts here are made to discredit me while I was censored.

Seem @observatory you are jumping at any opportunity to create perception that Scientex attempt to sway opinion and manipulate user accounts. Same as @dragon328 jump at opportunity to say I am speaking for Scientex.

Perverted sense of justice by putting me on trial in the court of public (collusion) opinion to discredit for merely questioning worrying claims that are made the main voice on this website by those claiming to be passionate protector of minority.

Ironic but unsurprising acts by same people claiming to be victim of unfairness and masquerading as holy champions of greater good. Creating more posts to generate more confusion and cover tracks.

Seem like master puppeteers and their loyal online army "activists" dislike contrarian posts currently to make sure some plan go smoothly. Very fishy. Seasoned observer can see through the web of collusion. Shareholders beware.

I will use new name number for all new post. The solution currently. Until they find new way to censor.

Posted by dragon328 > 2021-10-01 10:48 | Report Abuse

The directors tried to explain that the reward was already agreed one year earlier when a European company was negotiating to acquire a majority stake in Daibochi to allay senior management's job security concerns. That would have been sensible if the European company did acquire a majority stake in Daibochi and lay off these senior management staffs. But the negotiation failed and there was no deal with the European company.

Then Scientex came along and acquire a majority stake in Daibochi. Did Scientex fire off these senior management of Daibochi after taking over? I do not know. If the senior management was retained, it became absurd to me that such a generous reward was given to them. What has this senior management done to deserve such a reward? By making the accounts and financials of Daibochi look really bad for quarters ended Dec 2018 and March 2019 in order to justify a low take over price by Scientex? It raised many questions and funds were concerned with such a "reward" mentality.

I was in a big MNC overseeing the commercial aspects of few subsidiaries in a number of countries. When we acquired a new company, we did not reward any of the senior management of the target company by doing a job favourable to us as the acquiror, but we retained those who were honest and capable.

Then what really happened behind the reward, only those directly involved in the Scientex-Daibochi takeover deal in 2019 would know. Investor funds and minority shareholders then could only question the directors who, as expected, failed to give a satisfying answer.

Posted by anti_colonialists3 > 2021-10-01 11:41 | Report Abuse

@dragon328 you claimed "big boy exercising muscles onto equity analysts and investment journalists to help sway retail investors to sell off Daibochi to them. totally unnecessary small tricks getting analysts to produce reports to their advantage."

Another unfair beautifully disguised shot to discredit Scientex by smearing their name and integrity with false claim?

It is analyst job to answer big investor like Apo***, so your claim is half false or full false. If your claim is claim half true, you must agree it is also possible some other big investor or competitor of Apo*** are "exercising muscles onto" analysts?

Are you claiming Scientex paid or exercised its muscles on analysts and paid The Edge and other journalists to use them as "small tricks"?

Are you joking, or think everyone have 0 integrity and pressured or paid by Scientex? That is big insult! No different from anti vaxxer insane claims on Big Bad Pharma!

Posted by iknownuts > 2021-10-01 11:46 | Report Abuse

@dragon328

erm…. So u knew scientex was NEVER involved in the payment of the 4.9m to snr management, and yet you posted this earlier, implying scientex in 2018 paid off the management and will pay off the management again in 2021. Wow

You also attacked new forumers just bcos they do not agree with your viewpoint?



Posted by dragon328 > Sep 30, 2021 3:24 PM | Report Abuse

The current privatisation offer from Scientex is not doing any good to Daibochi nor its shareholders.

Recap that the senior management of Daibochi was rewarded with RM4.9 million for making through the acquisition of controlling stakes by Scientex in 2019.

As anti_colonialists and Investor420 seem to be speaking for Scientex, can you both please reveal to us how much reward will be paid to the senior management of Daibochi or parties in concert for making this privatisation deal through?

Please make sure any of such reward money should come from Scientex, and not charged to the accounts of Daibochi. It is a complete waste of money and time to Daibochi for such a non-sense privatisation offer to appear and drag on.

As shareholoders of Daibochi, we would be grateful for Scientex to withdraw its offer soonest and maintain the listing status of Daibochi.

Posted by dragon328 > 2021-10-01 14:05 | Report Abuse

As I posted earlier, I did not and do not know if Scientex was involved in the payment of the RM4.9m. I just put out the facts and you are free to interpret in whatever way you like.

Who is attacking who now? It seems like both yourself and anti_colonialist are launching personal attacks on me.

This is a forum free for all to express own views. If you do not agree with my view, you are welcome to debate and lay out your counter arguments.


Posted by iknownuts > Oct 1, 2021 11:46 AM | Report Abuse

@dragon328

erm…. So u knew scientex was NEVER involved in the payment of the 4.9m to snr management, and yet you posted this earlier, implying scientex in 2018 paid off the management and will pay off the management again in 2021. Wow

You also attacked new forumers just bcos they do not agree with your viewpoint?

Posted by observatory > 2021-10-01 14:18 | Report Abuse

@the new user/ users who claimed to have been censored,

I've never claimed that Scientex manipulate user accounts. But I notice you're very sensitive when I highlighted the FACT that were many new user accounts joining this discussion. Why jumping to the conclusion that I'm accusing Scientex manipulating account? Have I said that you represent Scientex?

But now I'm curious. Do you have a strong tie with Scientex currently or in the past, like as an employee/ management/ contractor/ vendor, rather than just a casual link such as a retail investor of Scientex? Note this is a question, not an assertion or accusation. I also mean no offense. It just helps me to understand better whom I'm talking to. (And in case you've missed out, I've repeatedly disclosed myself as a retail investor of Daibochi and responsible for my and only myself)

I've outlined my valuation for Daibochi more than two weeks ago in prior comments. Using historical forward PE valuation I've shown the offer price has grossly undervalued Daibochi.

I've repeatedly asked you to show your valuation. We can compare notes. It will be for the benefit of everyone instead of more emotions.

But please don't give advices like don't fight the taiko or don't fight the giant as @iknownuts and @Investor420 have already done. Frankly, at the rate it's going, Scientex cannot hit 75% shares let alone 90% within this offer period without altering its offer.

I look forward to more level headed discussion.

Posted by dragon328 > 2021-10-01 14:18 | Report Abuse

It is a common trick in corporate deals. Can you prove it right or wrong?

If an equity analyst came along to recommend that the fair value of Daibochi should be RM3.85 (CIMB original tp) or higher, then it would make sense to suspect other investors or funds to have exercised muscles onto the analyst, but we have not seen any of such.

Get your facts right and not just make baseless claims here.

If you are just an observor, you are wasting your time posting abusive comments on those who think the privatisation offer is unfair.

If you are an investor in Daibochi, just sell off your shares if you think the offer is good and move to other counters.

If you are a shareholder or party in concert with Scientex management, then go tell Mr. Lim to just raise the offer price or withdraw it. DO not waste everbody's time here.


Posted by anti_colonialists3 > Oct 1, 2021 11:41 AM | Report Abuse

@dragon328 you claimed "big boy exercising muscles onto equity analysts and investment journalists to help sway retail investors to sell off Daibochi to them. totally unnecessary small tricks getting analysts to produce reports to their advantage."

Another unfair beautifully disguised shot to discredit Scientex by smearing their name and integrity with false claim?

It is analyst job to answer big investor like Apo***, so your claim is half false or full false. If your claim is claim half true, you must agree it is also possible some other big investor or competitor of Apo*** are "exercising muscles onto" analysts?

Are you claiming Scientex paid or exercised its muscles on analysts and paid The Edge and other journalists to use them as "small tricks"?

Are you joking, or think everyone have 0 integrity and pressured or paid by Scientex? That is big insult! No different from anti vaxxer insane claims on Big Bad Pharma!

Posted by iknownuts > 2021-10-01 14:43 | Report Abuse

doesnt seem like there is going to be any level headed discussion here anytime soon…

I wont post here anymore til it cools down a bit later on.

On a lighter note, do u guys hate scientex and pj lim that much? I see his name come up so often but not the management of daibochi. What happens if daibochi changes its name to scientex daibochi bhd? Lol

Also, i wish u guys the best in deciding whichever way u go. Cheers!

Posted by anti_colonialists4 > 2021-10-01 14:46 | Report Abuse

@observatory you claimed "a big part of Daibochi's growth come from Mega acquisition". What is your intention are you trying to discredit Scientex role that improved Daibochi performance?

While ignoring fact that @dragon328 make false claim that Scientex did not improve Daibochi performance? Are you condoning false claim to suit your agenda to sway shareholders?

(Note you already said you are biased, Scientex unfair, and hope other shareholders follow you)

Your reply raises question if you work together with @dragon328. Since you claim "(partly due to the pandemic situation)" what is your intention to say "partly" when the pandemic is main reason?

Daibochi performance improved under Scientex until the pandemic hit most companies in the world. Whether Mega or not the fact is Daibochi performance magically shoot up to RM47 million for 2 years under Scientex and win-win for all. Is it your intention to discredit Scientex role and say partly due to bad management?

After that you go further say Mega "mostly plateaued profit in 8 to 9 quarters" to support your bias view or condone false claims by @dragon328 that Scientex did not improve Daibochi.

So much confusion just to hide fact that Daibochi can only grow after 2018 because Scientex came in?

Careful camouflaged punches to support agenda and unfairness story that seem to made from air. Or to confuse shareholders to feed greed and biased agenda?

You claimed "compulsory acquisition is dead now anyway", in other words everyone is safe, Scientex already forced to make higher offer and you win.

But you go further attack Scientex, discredit their role to improve Daibochi, attempt sway public opinion that Scientex is unfair. And condone false claim to support your agenda, ironic and contradict your own claim of passionate about fairness.

With similar bias post and hidden punches at Scientex, active discussion of Apollo blog (note you are the first to announce the blog here) and camouflaged as intention for greater good, raises question if you and @dragon328 are working together for someone?

You claimed "rest assure I'm no mole of Apollo". Why sudden need to assure others when clearly mere assurance and post history is not valid proof?

I said in earlier posts on other issue everything seem fishy. Shareholders beware. Signs of web of collusion and avoid swayed by master puppeteers.

Posted by observatory > 2021-10-01 15:06 | Report Abuse

@anti_colonialists4,

Instead of entertaining your latest accusations which are taken out of context, let me repeat my two questions to you.

"Do you have a strong tie with Scientex currently or in the past, like as an employee/ management/ contractor/ vendor, rather than just a casual link such as a retail investor of Scientex? Note this is a question, not an assertion or accusation. I also mean no offense. It just helps me to understand better whom I'm talking to."

"I've repeatedly asked you to show your valuation. We can compare notes. It will be for the benefit of everyone instead of more emotions"

Can we settle these two points first?

Posted by hpcp > 2021-10-01 15:16 | Report Abuse

Minority shareholders are in the same boat with Apollo and Samarang

Posted by dragon328 > 2021-10-01 15:23 | Report Abuse

@anti_colonialists

You have not been able to come out with any specific point to support your view that the offer price of RM2.70 is good.

And you are particularly sensitive to remarks that you deem discredit Scientex. We do not know your interests here but your desperate action itself seems to suggest that you are trying to encourage retailer investors here to accept the offer by Scientex. But you need to understand that whatever remarkable achievements made bby Scientex in the past 20 years has nothing to do with this privatisation offer and bears no interests to shareholders of Daibochi whatsoever.

If you think Scientex deserves some respect by making such an offer, then it has to earn it. Likewise, if you want us to think the offer is good, convince us with facts and figures.

Why the offer price of RM2.70 is good enough? What are the improvements to Daibochi financials if Scientex owns 100% of it? What good would it be for minority shareholders of Daibochi to forego our long term holdings of Daibochi at RM2.70 instead of riding out its expansion plans?

If you cannot even convince ikan bilis us here, then Scientex is doomed to fail in this privatisation attempt. FYI, Samarang just added 346k shares of Daibochi yesterday at RM2.71 and Scientex got zero. People are buying up Daibochi at RM2.73 now and Scientex will likely end up nil today.

Posted by hpcp > 2021-10-01 15:34 | Report Abuse

Clearly anti_colonialists has his own agenda. As a retail investor, who does not hope for a better offer price? More so when we have funds like Apollo and Samarang pushing for it.

Posted by iknownuts > 2021-10-01 15:42 | Report Abuse

2.78 and 0.345 wow. Lets go!

Posted by dragon328 > 2021-10-01 15:42 | Report Abuse

Makan to RM2.78!! What a rush to mop up shares.

Posted by dragon328 > 2021-10-01 15:54 | Report Abuse

Don't just keep saying that Scientex has improved Daibochi performance. Be more specific. In which areas and by how much?

We are just small investors in Daibochi. Naturally we like to see the company we invest in to perform well and hope for a higher offer price mah.

Don't get too emotional. Grab a coffee and some Daibochi-WB shares, then you will have a different perspective. Cheers!



Posted by anti_colonialists4 > Oct 1, 2021 2:46 PM | Report Abuse

@observatory you claimed "a big part of Daibochi's growth come from Mega acquisition". What is your intention are you trying to discredit Scientex role that improved Daibochi performance?

While ignoring fact that @dragon328 make false claim that Scientex did not improve Daibochi performance? Are you condoning false claim to suit your agenda to sway shareholders?

(Note you already said you are biased, Scientex unfair, and hope other shareholders follow you)

Your reply raises question if you work together with @dragon328. Since you claim "(partly due to the pandemic situation)" what is your intention to say "partly" when the pandemic is main reason?

Daibochi performance improved under Scientex until the pandemic hit most companies in the world. Whether Mega or not the fact is Daibochi performance magically shoot up to RM47 million for 2 years under Scientex and win-win for all. Is it your intention to discredit Scientex role and say partly due to bad management?

After that you go further say Mega "mostly plateaued profit in 8 to 9 quarters" to support your bias view or condone false claims by @dragon328 that Scientex did not improve Daibochi.

Posted by Investmon > 2021-10-01 16:43 | Report Abuse

is Scientex going to counter offer at higher price? Daibochi share price is now 2.77. Anyone know the bursa rules when PJ Lim can counteroffer

I don't think he wants the market to see that he fails in this transaction.

Posted by observatory > 2021-10-01 17:23 | Report Abuse

@iknownuts, you're back?

No, I don't hate anyone or any company. Hate is the biggest enemy to investment success.

I recalled your first comments here. You advised not to go against the big bro less get stuck in a counter not meeting market spread requirement. Instead can swap Daibochi with Scientex. But now cheering the price up?

No offense here. Just wonder if you've changed your position?

Posted by anti_colonialists5 > 2021-10-01 18:50 | Report Abuse

@dragon328 you claimed that I have "not been able to come out with any specific point to support your view that the offer price of RM2.70 is good". @observatory, you claimed "I've repeatedly asked you to show your valuation. We can compare notes."

It should be obvious to level headed observers, none of my posts so far contained any personal opinion on fairness of offer price. I have not even started.

Since you claim that you want to compare notes, so far I was merely posting questions about validity of some of your own claims and gave my reason for each question. I think some of your claims are biased, promote fake news, or based on false info.

But to avoid my question you now create new false claims to imply I am avoiding discussion and speaking for Scientex? Are you trying to monopolise the main narrative here? Then call me sensitive while defending your own position?

It sound fishier now.

I can only "assure" that I am highlighting specific issue in your claims. You can verify.

I have not finished. More coming. I am slow and but try to be detailed.

@observatory your question "why jumping to the conclusion that I'm accusing Scientex manipulating account?". I admit it was my mistake read wrongly, sorry. But why I say that?

Recap what you say "Just when I got the time to reply, he has deleted his own comment. whether argument in favour of offeror or aggrieved minority. no need to keep creating new user accounts for that purpose".

You are still implying I am creating new accounts and "delete my own messages" "for purpose of "arguing in favour of Scientex". @dragon328 go further to claim "anti_colonialists and Investor420 seem to be speaking for Scientex".

You can read my original post and substitute this corrected statement. But note it does not change my main view that you are jumping at opportunity to create perception of an attempt to sway opinion and manipulate user accounts.

@observatory, your question "do you have strong ties with Scientex?"

I clearly stated in my first post that I am an observer. That include commenting on posts that I think are distorted.

I also read your comments that you are "retail investor of Daibochi". I do not need to repeat my own position many times like you. To me it achieves nothing.

Posted by anti_colonialists6 > 2021-10-02 08:16 | Report Abuse

"Posted by dragon328 > Oct 01, 2021 2:18 PM | Report Abuse

It is a common trick in corporate deals. Can you prove it right or wrong? If an equity analyst came along to recommend that the fair value of Daibochi should be RM3.85 (CIMB original tp) or higher, then it would make sense to suspect other investors or funds to have exercised muscles onto the analyst, but we have not seen any of such.

Get your facts right and not just make baseless claims here. If you are just an observor, you are wasting your time posting abusive comments on those who think the privatisation offer is unfair. If you are an investor in Daibochi, just sell off your shares if you think the offer is good and move to other counters. If you are a shareholder or party in concert with Scientex management, then go tell Mr. Lim to just raise the offer price or withdraw it. DO not waste everbody's time here.

-----------------------------------

@dragon328 good job contradicting your own arguments, once again reveal your consistent false claims, raising worrying question about your intention.

I have already responded you that analyst job is to answer big investor like Apollo, in other words licensed investment companies with billions dollars to play. You ignore that to create new false claims.

If you want to stick your claim that someone can "exercise its muscles onto analyst", then it is more likely other customers of the analyst, big investors like Apollo, are "exercising their muscles".

Companies like Scientex are not licensed investment company that have billions dollars and analysts begging to service them.

There can be many reason for analyst to think that Scientex offer is fair. If I use your argument style, one possible reason is other big investors with share in Scientex and are Apollo competitor, are "exercising their muscles on analysts" that need their business.

If true then possible competition between foreigner Apollo/Samarang (Daibochi) and Vanguard/Norges (Scientex) or local big investors like EPF/Affin (Scientex). It is normal for them to play hundreds of millions to billions in market and have many analysts begging for their business.

Level headed investors may think that sound unlikely. If sound unlikely, other possible view is the analyst is independent, and think the offer price is fair for Daibochi shareholders due to own professional opinion.

If you really believe they are pressured and their integrity compromise, what stop you from reporting to regulators and let them investigate? Clearly they will know better than us if any malpractice.

But you seem happy to destroy other people lives and rice bowl by your perverted sense of justice and slander and trial in court of public (collusion) opinion.

This is clearly because you want to sway public that Scientex is unfair, and you even make slanderous claims that they "exercise their muscle onto analysts and journalists and using them to do tricks".

I said earlier, are you joking or think everyone has 0 integrity and can be paid or pushed by Scientex? That is big insult to all hard working analysts and journalists implying they are bought. No different from anti vaxxers insane claims on big pharma.

You are clearly doing this to support your evil agenda to smear Scientex name and integrity with fake story and slanderous claims and you are happy to harm other innocent parties to support your agenda.

Do you think it is fun if their professional career and integrity discredited and smeared on a public website by unknown people? Only conclusion why you are acting this way is because you are evil.

Unsurprising from same people masquerading as victims and champions of greater good, while ironically camouflaging attack to smear name and integrity of genuine professionals and companies.

Shareholders that are reading here beware and do not be swayed by master puppeteers acting behind the scene.

Posted by observatory > 2021-10-02 11:29 | Report Abuse

@anti_colonilists,

You've not answered my simple question just by repeating that you're an observer. Please decide if you're an observer with, or without, a strong tie to Scientext.

There shouldn't be concern about privacy. I'm not asking whether you're a board member of Scientex. What I've asked many times is whether you have a strong tie in the sense of being a current or past management/ employee/ vendor/ contractor.

A minimum level of transparency helps us to understand whom we're talking to. I've declared my interest, so are others.

Posted by observatory > 2021-10-02 11:40 | Report Abuse

Meanwhile I want to return to the valuation. This is what have brought me to Daibochi forum in the first place.

I've earlier put forward my own valuation case based on a simple 10 year historical forward PE. Some analysts have used this approach to value Daibochi. Forward earning helps to look past the recent pandemic impacts.

(1) Just before the offer announcement, before analysts' forecast have been affected by the offer, the Bloomberg consensus FY22E net profit is RM65.7m (source: Kenanga)
(2) The share base is 327.372m. FY22E EPS = RM65.7m/ 327.372m = RM0.201 per share.
(3) 10 year mean PE is 18.6X (source: CIMB)
(4) Fair market per share = RM0.201 x 18.6 = RM3.73

The estimated fair value at RM3.73 is much higher than RM2.70.

Granted valuation is an inexact exercise. But even with margin of safety applied, it's still much higher than RM2.70.

Besides acquirer should pay for premium rather than mean valuation.

Posted by observatory > 2021-10-02 11:41 | Report Abuse

As a sanity check, I'll use an alternative approach to estimate future earnings without relying on analysts' consensus forecasted net profit.

In the latest FY2020 annual report, Daibochi's Chairman wrote that "capital expenditure of RM100.0 million over a two-year period from FY 2020-FY 2021 to expand our manufacturing capacity by approximately 60%."

FY20 and FY21 EPS were RM0.146 and RM0.144 respectively. Take the average which is RM0.145.

Assume net profit scales linearly with the 60% capacity expansion. When the newly installed capacity has been taken up, future EPS could reach RM0.145 x 160% = RM0.231.

Applying 10 year mean forward PE of 18.6X, the value could reach 18.6 x RM0.231 = RM4.30, perhaps realized within next 2 years of so (unless you believe Daibochi's management has made the mistake of putting in so much capacity which they cannot use for a long time, and leave the assets depreciating).