Should YTLE accept the share swap with YTL at price of RM0.55?

The Fundamental

I believe all shareholder are well aware the YTLE worth more than that...obviously the only reason is because YTLE isearning minimum RM75,000,000 every year from YTL Communications (a.k.a Yes 4G) business, making annual dividend yields 7.27% if YTLE priced at RM0.55 (far higher than FD in bank).

Not forget to mention, YTLE  also a company with net cash and almost zero borrowings company. Its cash position as at 3QFY16 stood as RM173.55 million, with borrowings amount to barely RM7,000.00. YTLE has successfully proving itself with highest market value, stable earning and a high yield stock in the Ace market.

As Yes 4G business going to breakeven soon, YTLE is entitle to share 15% portion out from Yes 4G's revenue (equivanent to 50% of net profit - estimation based on telco profit margin of 40%) due to it most precious spectrum sharing agreement with YTL Communications  ( a unit under listed YTL Power International Bhd).

The above arrangement has been made at the early year of 2011 when Yes 4G was launched in November 2010. In fact, YTLE is the ex-owner of YTL Communications. However, YTLE is still the ultimate owner for the most valuable spectrum in ensuring business continuity of Yes 4G.

After waiting for more than half-decade, Yes 4G is in a good position and very likely to breakeven in coming period for few reasons:

(1)Recent launched of new LTE network (Yes 4G LTE) ;

(2)No further capital expenditure (completed RM4b network investment) ; &

(3) Lower expenses on assets depreciation (network infra completely depreciated over 5 to 6 years).

The Exchange Price

In order to escape and get rid of  the YTLE's minority shareholder, I believe there is a price to pay for by YTL Corp. If YTL want to statisfy the shareholders by the way of "system barter", it might need to show the shareholder with the sincere wholehearted open-armed with true words.  For instance, distribution can be made out of liquid assets such cash rich position in YTLE etc. While, the inflated exchange price of RM1.65 of YTL Corp shall be adjusted accordingly as the price factored in the prospect of HSR which has not yet materialised.

Need not to say, will minority shareholders agree with YTLE lowest entry point  RM0.55 vs YTL inflated RM1.65?

If you already holding YTLE for considerable of time like other shareholders, accompany YTLE from IPO price RM1.10 ; experienced peak price : RM1.70 in year 2011 and after 5 years from now...(Please continue to stay with us if you get YTLE at a great value price, because is the time for minority shareholder to united.)

YTLE starting price can be RM1.10 (in reference to IPO price). As for accountable, what delivered by YTL management contributed to YTLE past poor prospect and long record of shrinking trend of share price. YTLE shall not taking advantage by anyone at this moment,needless to say by YTL management itself. Additionaly, investors who invest in YTLE might not want to put money invest in YTL Corporation for plenty of reasons.

The truth fact is, It's now the right time for YTLE bearing with the fruits which is coming...as follows:

Link:

http://www.theborneopost.com/2016/07/01/ytl-communications-banks-on-new-plan-to-turn-profitable/

#god stewardship#sincere_open_armed #true_words