Posted by sosfinance > 2020-07-04 16:33 | Report Abuse

1) max discount for WB Exercise Price is 25%
2) max discount for ESOS Exercise Price is 10%
Assume WVAP 53sen, the Exercise Price 40sen (for WB) and 48sen (for ESOS).

Posted by leoleo86 > 2020-07-04 16:48 | Report Abuse

@sosfinance, the allowable discount % is fixed by Bursa?

Posted by MissTan > 2020-07-04 19:10 | Report Abuse

It's proposal stage by company. Normally how long to approve?

Posted by lching > 2020-07-04 19:23 | Report Abuse

PN government delay 5G and OCK will be affected.

Posted by sosfinance > 2020-07-04 20:17 | Report Abuse

1) Discount as stated in the announced proposal and fixed by Bursa
2) Normally 3-6 months
3) All government projects in all sectors are delayed when you have change in government. Some are more serious than others. OCK has >50% recurring biz, 5G is a bonus.

Posted by Platypus88 > 2020-07-04 21:24 | Report Abuse

my biggest question - why is OCK asking for RM24m now? This is only 8 months after the private placement of RM52m in Nov 2019!!!!! There is no expansion plan... the money is used for working capital and to pare down debts??? Why??? Interest rate is so cheap now.

Posted by Platypus88 > 2020-07-04 21:29 | Report Abuse

@ abang_misai NOT "Look like ock-wa Will be totally burnt" ... Confirmed warrants ALL burnt!

Posted by sosfinance > 2020-07-04 21:52 | Report Abuse

Changing government seems to be the trends recently for Malaysia. Not sure if it is correlated with the foreign funds leaving.

Posted by MissTan > 2020-07-05 11:38 | Report Abuse

Sos you are very resourcefull. Tq.

Posted by MissTan > 2020-07-05 11:41 | Report Abuse

But the question why ock asking now for 24m after 8 months PP very related. Why???

Posted by constantine007 > 2020-07-05 14:34 | Report Abuse

right issue again?hhhmmmm

Posted by sosfinance > 2020-07-06 08:16 | Report Abuse

Depends from which perspective we look at (they can only raise RM19.8m realistically based on minimum scenario)

1)OCK is paying 12% interest in Indonesia and about 8% for local OD. Interest cost saving of about RM1.0m for the long run.

2)Benefit to shareholders 1:10 Rights with free warrant (shareholders getting the new rights at 65% discount of current price and free warrants, if you buy today say 56 sen x 1000 = RM560 you only need to pick up 100 of rights @ 20sen free warrants = you pay on RM20/- you get free warrant) Your average cost = 52.7 sen free warrants - you get a company which better capitalised and reduce gearing.

3) The underlying fact is they are raising only RM19.8m, as it is unlikely they can raise RM24.4m because it assumed all the existing 264m warrant holders will convert into shares at exercise price 71sen and that itself will bring in to the company RM185m.

4) The rationale is stated in the proposal. However, I can only speculate the underlying reason they are doing the RI, I can only speculate the are rewarding their employees with 15% ESOS when share price is low. Normally ESOS is granted 20% each year for 5 years to retain employees.

5) Frankly, don’t you agree the amount raised is rather insignificant RM19m? But don’t forget, their Indonesia loan is 12% . If you use RM10m to repay, it is saving the company RM1.2m each year for long term.

Posted by sosfinance > 2020-07-06 08:33 | Report Abuse

Please refer to Dayang’s article by KYY “Dayang’s right issues enticed Investors to buy more shares”. Dayang did a similar 1:10 Rights issue and share price doubled.

Posted by sosfinance > 2020-07-06 11:03 | Report Abuse

OCK tower will increase about 20% from 4200 towers to >5000 towers for FYE20. On top of that, solar farm also will contribute this year from acquisition worth RM40m. OCK also busy implementing phase one of NFCP.

Recurring profits will have double digit growth, any negative reaction to the share price will be an opportunity for investors to accumulate as the rights at 20 sen or >50% discount will entice investors to buy more shares as the fundamentals of OCK is improving and less effected from its towers and solar with >10-20 years concession.

Posted by Hawk Eye > 2020-07-06 11:14 | Report Abuse

Mood is off..

Posted by ttt > 2020-07-06 12:57 | Report Abuse

sosfinance.. i like it that you brought up the Dayang Rights Issue 1:10...
OCK seems to be in a very similar position and i think the price would start to climb in the next 2 months as the Q2 2020 results would be good when it release in end August. Gut feel.

putting up the link to the article you mentioned.

https://koonyewyin.com/2019/10/28/dayangs-right-issues-enticed-investors-to-buy-more-shares/#:~:text=Unfortunately%2C%20many%20shareholders%20including%20a,buy%20back%20at%20cheaper%20prices.&text=Dayang%20announced%20its%20right%20issues,price%20was%20about%2090%20sen.

Posted by MissTan > 2020-07-06 13:56 | Report Abuse

Very good info... Here we go hehe

Posted by document1 > 2020-07-06 16:24 | Report Abuse

Tq sosfinance and ttt for the sharing and info

Posted by sosfinance > 2020-07-06 20:32 | Report Abuse

Extract from RHB Research:

Reiterate BUY, new SOP TP of MYR0.68 from MYR0.65, 19% upside, after rolling forward our base year to FY21F. We continue to see the OCK Group as a strategic beneficiary of mobile sites and fiber deployments. Stronger tower tenancies and site acquisitions in Indo-China should sustain the double-digit growth in tower leasing revenues going forward.

“We expect the recently-announced rights issue to be priced at a significant discount, to entice shareholders.”

Other key catalysts are the sale of a strategic stake in its towerco and new contract wins.

Kenanga maintain TP, MSecurities reduce TP.

Posted by holyspirit > 2020-07-06 23:32 | Report Abuse

@sosfinance: could you please share with us the RHB research article here... thousand thanks

Posted by Platypus88 > 2020-07-07 00:11 | Report Abuse

yes please share the report, i want to know how RHB can raise TP even after 10% dilution with the rights issue, just by rolling forward the base year??? isnt mobile sites and fiber deployments already included in the valuation? I want to see if i should continue to invest? will this be a bottomless pit?

Posted by sosfinance > 2020-07-07 09:50 | Report Abuse

1) if all shareholders take up their rights issue, no dilution effect
2) ESOS dilutive is 2.7% p.a. for 5 years
3) RHB using FYE21 to estimate, includes 5G Spectrum (in The Star as well)
4) Rights issue with free warrant is a “special dividend” in disguise at about 3.5% yield (in 6 months) based on today’s 55 sen. (Will show later)

Posted by mbge7clt > 2020-07-07 20:13 | Report Abuse

i hope not another KNM. KNM always issue rights.

Posted by abang_misai > 2020-07-07 20:56 | Report Abuse

Warrant kaput as the expiry date is nearing

Posted by PanjiAlam55 > 2020-07-07 21:36 | Report Abuse

RHB staff got gf or bf in OCK laaaa

Posted by KPH5328 > 2020-07-07 22:44 | Report Abuse

https://www.thestar.com.my/business/business-news/2020/07/06/rhb-raises-earnings-forecast-on-ock-tp-at-68-sen

Posted by sosfinance > 2020-07-08 00:18 | Report Abuse

PETALING JAYA: OCK Group Bhd is eyeing additional jobs from the government’s National Fiberisation and Connectivity Plan (NFCP) 2 through a partnership with a telecommunications service provider (telco), according to RHB Research.

The company had earlier clinched a RM60mil network equipment job under the NFCP 1 when it collaborated with the telco. (May, 2020)

Posted by holyspirit > 2020-07-08 15:31 | Report Abuse

Compare to green packet , OCK also better prospect !! Why punter like to push stock which is loss making :(

Posted by holyspirit > 2020-07-08 15:33 | Report Abuse

Look at Green packet.....the company is making losses on QR but revenue increase ( reported by the edge : This was despite a 50% increase in revenue to RM147.05 million, from RM97.94 million a year ago, on the back of higher sales across its business segments.)but it still need to wait for next QR to see this revenue will be able to cover losses ...hope i am right?!

Posted by holyspirit > 2020-07-08 15:33 | Report Abuse

Punter is pushing .....
Why punter not seeing OCK???
Based on the OCK report, atleast OCK not making losses...and didn't has private placement to raise $$$$.....

Posted by sosfinance > 2020-07-08 21:20 | Report Abuse

"Popularity" and "allow for operators" comes first. Good sector theme comes second, OCK falls within the "telco" sector which is neutral, hence, not much attention, although towerco is part of telco eco-system.

Towerco and Telco has very different business model, one is based on few MNOs and the other based on millions of customers. Market will categorize them together even though one depends on concessions with telco and tenancy ratio, the other depends on subscribers satisfactions and coverage. Towerco is similar to a IPP, besides having a core tenant, it can take multi-tenants, whereas IPP only has Tenaga as customer. No worries, the market will rotate theme.

Posted by 123eztrade > 2020-07-08 21:23 | Report Abuse

Right issues coming. let it drop low low than see

Posted by holyspirit > 2020-07-09 03:57 | Report Abuse

it is already very low now

Posted by holyspirit > 2020-07-09 04:16 | Report Abuse

And punter did not see OCK, oh dear....such a good company was treated unfair....

Posted by sosfinance > 2020-07-09 09:41 | Report Abuse

Rights issue of 1:10 (not very material, RM19m only) is more of a "dividend in disguise of about 4% within 6 months" for the existing shareholders. NFCP 2 (about RM1b) will be awarded in 3Q), some exiting news for telco/telco related companies.

Posted by holyspirit > 2020-07-09 13:02 | Report Abuse

@sos : 3 Q is next month right?
The tech stock is rising in US market...haha malaysia ( punter) only fried glove stock...they forgot about staying at home, one can't live without internet connection ( green packet/ telco stock) and internet connection cannot work without telco tower (OCK) !!

Posted by holyspirit > 2020-07-09 13:11 | Report Abuse

come to think of it...OCK in fact is the foundation for all telco and internet network connector....correct me if i am wrong...

Posted by sosfinance > 2020-07-09 14:55 | Report Abuse

1) Assumed they pay back loan immediately of RM500m x 6%, they will have additional profit of RM30m. Loan for towers basically is 6-7 years on average. This loan is there as OCK is expanding every year (RM120m - RM150m) x last 4 to 5 years. Actually, they did get lost of cash flow from tower, it is used for repay loan, interest and expansion (from 600 to 4200 towers)

2) The plus point is OCK has capacity to improve its profits without additional capex from the tenancy ratio increase, say for 1.3x to 1.8x, but this can only be done gradually over time (few years) and all the improvement in revenue (30-40%) will flow directly into profits. As soon as OCK par down its loan, it takes new one to expand, that is why the tower keep on increasing, for me, is good, meaning excess cash allocated into a RECURRING PROFIT BIZ. Just like my rental increase 10% each year, so I buy more units (towers). The yield is easily 12-18% p.a. (depends which country you are referring)

3) NFCP allocation is a bit slow (although they are implementing phase 1). Hope in this 3rd quarter will be some good news.

4) Local institutional investors is not aggressive (worry about withdrawals of unit trust holders), I think.

Posted by holyspirit > 2020-07-10 02:55 | Report Abuse

@SOS : Thanks for your details analysis...appreciate

Posted by AndK > 2020-07-10 09:19 | Report Abuse

OPR rate cut benefited for OCK who have high borrowing from bank.

Posted by sosfinance > 2020-07-10 17:28 | Report Abuse

1) OPR cut will benefit OCK.

2) More importantly, OCK recurring revenue will exceed 80% FYE21 onwards and has capacity to grow yearly in double digit (via the tenancy ratio improvement).

3) Warrant B will substantially pay for the rights issue, is like 1:10 bonus issue for existing shareholders

4) NFCP or 5G backbone projects will be additional contribution (next 5 years) on top of the recurring profits.

5) Spectrum (although delayed), will be awarded to MNOs next year, and this will also benefit OCK from MNOs capex allocations.

6) Majority stocks are down other than gloves stocks and penny stocks, hopefully local and foreign institutional will be back gradually.

Posted by sosfinance > 2020-07-12 10:24 | Report Abuse

Looking at FYE21, OCK likely will do better than FYE20 as the towers expansion and tenancy improvement. NCFP and Spectrum capex will be a bonus.

Posted by BullRUN2021 > 2020-07-15 10:35 | Report Abuse

When is the rights-ex date

Posted by sosfinance > 2020-07-15 20:30 | Report Abuse

It takes 3-6 months from the announcement of the proposal to complete the 1:10 rights issue. At 52 sen, ex-rights is 49 sen and gets a free warrant. This rights issue will likely gave the new investors a double digits gain upon completion. FYE21 will be a better year compare with FYE20 from growth of tower tenancy improvement and expansion + solar PV.

Posted by MissTan > 2020-07-15 22:16 | Report Abuse

But why price ock drop bit by bit after announce this RI? Market already make adjustment although complete in 3-6 months? Can explain this SOS. Tq.

Posted by sosfinance > 2020-07-16 09:10 | Report Abuse

1. PRICE
Most (not all) RI is seen as "negative" by the market. (Unless that stock is part of the theme play or very popular with syndicate).

2. FUNDAMENTAL
If you look at RI of 1:10 (with warrants), the fund raised actually quite small, about RM19m only (and OCK's about 75% held by institutionals, likely will pick up). If you look deeper, they are issuing at 20 sen, a steep discount of >50% to the existing and prospective investors (at 52 sen). The warrants (only 95.9m vs outstanding shares about 959m) issmall in proportion, and the pricing will likely pay substantially for the RI of 20 sen.

RHB mentioned its FYE21, revenue contribution is likely increased to 80% from 70% (that means OCK has sustainable earnings) and growth potential as well from expansion of towers and solar and also increase in tenancy ratio. Consensus gave OCK's TP about 68 - 73 sen.

3. MISCONCEPTION
Btw, many "undervalued" stocks is overlooked at the moment due to "political uncertainties" and focus only on Covid-19 related stocks and penny stocks.

Like the market, sometimes market may miss this undervalue stock because the current theme(s) is on related biz of coronovirus. They also has the misconception of rights issue (of course, some raised a lot of funds to really pay for debt, in OCK's case, only RM10m allocated to pay debt of about >RM500m, it's insignificant. However, time will tell, basically this is a "dividend in disguise", giving you 100 units of OCK (if you have 1,000 shares) free of charge, you can sell this rights and get >10% return. Of course, 10% return during this gloves season is nothing, hence, not much interest and ignored.

Those patience investors, who looks for "defensive and growth stocks" will be accumulating OCK for the double digits gain, on the pretext NFCP and spectrum capex will be awarded in 3QFYE20 and FYE21.

Posted by MissTan > 2020-07-16 11:23 | Report Abuse

Tqvm Sos. Your description is valuable...

Posted by holyspirit > 2020-07-16 13:25 | Report Abuse

@SOS: I need your assistance. ( I am new to stock about right issue) Presume If after EX date of rights issue has announced, if i hold 10,000 shares, i have 1000 shares right issue. And the OCK "right" will be listed , i can sell the "right" on the bursa ? ( of course if i sell, i don't have the right to subscribe the 1000 shares but will gain a little through sell of my "right" , is that correct?

Posted by sosfinance > 2020-07-16 14:58 | Report Abuse

@holyspirit, normally after ex-date, OR (Official Rights) will be traded in the market, you'll be credited the OR and this can be traded in the market for a few weeks (please confirm with remisier), you can choose to dispose the OR, the person who bought the OR can then pay another 20 sen to get this rights issue shares. After two weeks or so, this person (who bought the OR and pay for the rights) will be credited the OCK shares.

If you choose to keep the OR, then you must quickly take up the rights (20 sen) within the stipulated time given in order to own the rights issue.

Market sentiment towards telco is not very positive, but going forward with 5G and spectrum should be better. However, many still confuse OCK as a telco sector company, in reality, TOWERCO has a better business model and locked in concession of >20years for Myanmar and >5 years for Vietnam. So, Towerco profits are more stable and always has good upside when tenancy ratio improves and also expansion.

Posted by Platypus88 > 2020-07-16 20:17 | Report Abuse

@SOS The way you explain sounds like the rights issue is a MUST buy!!!
Why continue to invest? The share price didn’t go up in the last 2 years - even before Covid. When will OCK hit TP73 sen?