For the BIOHLDG, I decided a hold call for this counter due to my opinions below:

1. Current price RM 0.250 (as at Nov 30, 2017) is fully valued for the BIOHLDG. My valuation to this counter is RM 0.255 based on the PE model 25x with the forecast EPS 0.0102 for the financial year ending of FY2017.
2. As the BIOHLDG is a growth stock, high cash burning is usual. Even though BIOHLDG has a very low leverage, most of its CAPEX is actually capitalized by new shares issuance. As at 3Q FY2017, its financing activities cash flow was a cash inflow of RM 27 million against the investing activities cash outflow of RM 26 million. However, new shares issuance will dilute the company earnings.
3. Due to its downstream business segment, some costs were capitalized as long term assets. As at 3Q FY2017, the development expenditure had increased to RM 30 million from RM 18 million ended at December 2016. It’s mean it will be taking roughly 3-years to recover back for the cost incurred. Further, it is subjected to impairment risk as well.

Despite my personal opinions above, in fact, the BIOHLDG is very supportive by the Malaysia Government. First, the company received a RM 5 million grant income in FY2016. Second, some of its subsidiaries are qualified for 10-years tax incentives, where they are allowed to pay zero tax. Third, PNB is one of the major shareholders.

I will continue to observe the performance of this counter. If there is a great bargain, I may accumulate some for long term purpose.

https://streetanalystblog.wordpress.com/2017/12/03/biohldg-preliminary-study-3-final/