Mr.Koon is a respected philantropist and excellent stock picker while there are some so called sifu who would just write rubbish and hope that the herd will follow and he made a quick kill! I remembered a sifu who even composed a song on Bjcorp writing so gloriously on the company as the "Berkshire Hattaway" of Malaysia... What happened, Bjcorp? Never performed at all, if we followed this so called "sifu' we all "lat fu"!!!.
More popcorn added. More warrants added. Is a combo. Some say price is what you pay, value is what you get.
Last year, Jan 2016, I pay 70 sen - RM610m Today, 14 April 2017, I pay 85 sen - RM740m
Additional price paid is about RM130m
But I was told, 2017, they have 600 towers (Myanmar) and 1938 towers (Vietnam) These towers can generate about RM92m for 2017. Market is paying 10x-12.5x (EBITDA multiple). Assume EBITDA of 50%, so, 2017 additional EBITDA is RM46m x 10x = RM460m (12.5x = 570m).
On the tower ownership and leaseback biz, as zai zai explained earlier, Axiata sold part of their tower ownership/leasing biz for about RM380,000 per tower in Jan 2017.
OCK has about 2,900 towers revenue generating assets, this biz itself is value at roughly RM1.1 billion. A 20% discount for "smaller size" tower ownership/leasing biz will value it at about RM900 million. With existing biz of maintenance & solar, worth about RM400-500 million, total value of company is about RM1.3 billion or RM1.50 per share (no longer has execution risks).
With more expansion in the pipeline 200-400 new towers per annum (or more), value will improve. It may be a bargain for warrants at around 30sen as well as the mother share at 87.5 sen.
A tower ownership/lease biz is like a toll road concessionaire (20-30 years). The only difference is it takes shorter time to build (one year can build 1000-2000 towers, depending on conditions), and can immediately collect revenue once hand over to the telco operator, let say I can complete 100 in two months, I can hand over and start collecting lease rental income. Another upside is that, after the two months lapse after delivery, I can get new tenants, up to 3 tenants per tower, and improve my revenue almost immediately.
Hence, it is a "good biz model", (with one condition, with good tenancy growth, from 1.0x to 2.0x over time).
Hope that more will understand this biz model, and participate in this biz and gain together from its sustainable growth. Good luck.
Company will be compel to do a bonus issue of at least 1.8 for 1 share held under the new companies act.
Averaging up is a good idea if the "engine of growth" is crystallising every new day and the execution risk is substantially reduced every day.
It's value can only goes up from now, the question is, how much of the value is running faster than the price. If the rate of value grows faster than the price, it means, you are taking less risk with higher reward, hence, technically speaking, your entry price is "CHEAPER" based on risk and reward perspective.
One year ago, even thought the price is lower at say 23sen, the risk is much greater, as the "engine of growth" is yet to be built. The execution risk is higher.
(example, Mudajaya secured MRT1 contract few years ago, share price may have gone up, but, until today, the CEO actually said there are cost overrun, hence this project is a lost making contract. Similarly, when they entered the IPP project in India, the initial cost is about RM5 billion, but end up RM8 billion plus (although PPA improved), and delayed for commissioning for more than 3-4 years, incurring additional interest costs, and return may not be good at all. On hindsight, it is common a "discount" is given for any new biz because, there is always execution risk, it is a judgement issue).
OCK-W premium - 11%, Gadang W - 30%, EcoWD W - 70%, EWIT W - 50%, Some are single digit. Although the "estimated value" can be calculated, the warrant price is determined by the "market" or the operator.
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Pusher_Punisher
413 posts
Posted by Pusher_Punisher > 2017-03-31 12:26 | Report Abuse
im no sifu lor.. i small2 fish only.. just dumb dumb hold.. FA very strong.. TA just an entry price maa