Private placement of up to 20 per cent of paid up at 20 per cent discount. Market practice is only 5 per cent discount. No wonder the price drop so much after the announcement. Major shareholder sold before announcement. Is this insider trading. Bursa please investigate.
Hi matt88 - I am not overly concerned about the major shareholder's sale of 2 mil shares, which, according to the same Bursa announcement, makes up barely 2% of her (MADAM SHANTAMALAR A/P C.SIVASUBRAMANIAM) holdings. So, I wouldn't link it with private placement exercise announcement that was made a few days later on Aug 17.
Anyone here in the know re the proposed private placement, beyond what was announced? Thanks in advance.
Having looked a little deeper into HEB, I found that the recently concluded quarter was its best since Q3-2018. Its profit margin had for the first time since the earlier period crossed the 10% threshold. The earnings per share, too, is the best since the earlier period.
Should HEB were to maintain a similar performance moving forward -- I think this is highly likely given its recent big wins and its performance over the years paying down debt -- at an annualized EPS of, say, 3.2 cents, and a PER of 28 (based on past performance), we get a target price of RM 0.89. If we were to conservatively price it at 15 (for the so-called Peter Lynch Earnings Line), we'd get a target price of RM 0.47.
So, at RM 0.355, HEB does appear to be selling at a discount of 25% to 60%, depending on how conservatively we price the business. To me, it's a buy.
HSS Engineers (HSS MK) BUY (maintain) Price Target: RM0.82 Up/Downside: +115.8% Previous Target (Rating): RM0.82 (BUY) Multiple growth drivers ➢ We hosted HSS management for a meeting with 12 institutional investors ➢ The RM998m Project Management Consultant (PMC) secured contract for the Klang Valley MRT Line 3 (MRT3) project provides good earnings visibility ➢ HSS is expanding its engineering services to other industries and pursuing overseas expansion to diversify geographically. HSS remains a sectortop BUY with an unchanged target price (TP) of RM0.82, based on a 2023E PER of 18x MRT3 PMC contract provides long-term earnings visibility HSS accepted the Letter of Appointment from MRT Corporation on 4 August 2022 to provide PMC services for the MRT3 project with an estimated value of RM997.9m over the expected duration of 11 years. We understand that the revenue will mostly be recognised in the first 8 years for the engineering design and project management of the civil works portion of the MRT3. Geographical diversification and expansion of services HSS’ remaining order book of RM1.5bn will provide earnings visibility over the coming 5- 8 years. New contract wins hit a new high of RM1.09bn YTD 2022. HSS is still targeting another RM150-200m of contract wins in 2H22 with a tender book of RM400m currently. Some ongoing bids/negotiations for new projects are the Bayan Lepas and Johor LRTs, Sarawak Metro, Westport Phase 2, PJD Link Highway, KL-Karak Highway Widening, Kuching Airport expansion, and flood mitigation, water and sewerage projects. HSS is also expanding geographically by pursuing Asian projects in collaboration with Japanese consultants and expanding its services to other industries such as the telecommunication (5G network infrastructure) and digital technology (data centre) sectors. Private placement and bonus issue of warrants HSS proposed a private placement of new shares up to 20% of share capital and bonus issue of 1 warrant for every 3 existing shares held on 17 August 2022. We gather that the private placement is a contingency plan and the new equity issuance will only be required if HSS needs working capital for its projects. Indications are working capital requirements for its projects can be met with internally-generated funds and bank borrowings. Net gearing is low at 0.1x as at end-2Q22. Hence, new equity funding from the proposed private placement and exercise of warrants may not be required, in our opinion. Remains a top sector BUY The core 2023E PER of 8x is attractive considering its strong 2-year core EPS CAGR of 45% in 2023-24E. We maintain our BUY call with a 12-month TP of RM0.82, based on target 2023E PER of 18x. Key risks are political uncertainties and slow roll-out of infrastructure projects.
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....
wallstreetrookie
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Posted by wallstreetrookie > 2021-08-26 09:53 | Report Abuse
RM0.8 price target right?