Angielim: Who wanna buy?

2 years back, Mr Peace said that SANICHI will go to 20sen. It indeed touched 20sen for awhile.

A company that does not even know how to distinguish between profit before tax and operating expenses...

They have expansion plan and profits. Just, they weren't benefited by the shareholders.

Mind everyone, the upcoming right issue is going to be heavy. For every share held, you gotta have 2 rights to subscribe.

One of the ficked up counter. My friend bought at 10sen and stucked for more than 1 year. My commentaries on this counter:

1. Based on the latest quarterly report, it is totally silence on Klebang, Malacca Project (Marina Point). Where has it gone to?

2. Based on the latest multiple proposals, including par value reduction, share consolidation, and right issues, it is expected to RM57.23mil, subject to all shareholders are taking up the rights, and warrant holders are unlikely to convert their shares to take up the rights. Out of these RM57.23mil, RM11.5mil will be used to complete the factory building and production capacity expansion in Senai. Sanichi mentioned in its proposal saying that they are able to produce approximately 15 units of mould, and would want to use these proceeds of approximately RM11.5mil to increase its production to 20 units of mould. It also mentioned that the current utilisation rate is almost at its maximum production capacity. Comparing this to its latest quarterly result, we have seen a reduction in last quarter's sales. The commentary on the latest result shows that the group's revenue deceased by approximately 31.18% as compared to preceding corresponding. The reason of lower revenue is mainly due to lower demand from Euro market. This doesn't jive much with the proposal of right issues.

3. Based on the latest quarterly report, they are having RM17mil cash on hand only, and how are they going to fund the Marina Point project, which has been anticipated by the shareholders?

4. Based on the latest multiple proposals, it intends to raise more than RM10mil, but expected to raise RM57mil in total, for other fundings, of which, one of it is acquisition of investment properties. It plans to applocate RM36mil for investment in properties. The Board is eyeing a property in Singapore, which it intends to collect rent. The cost of investment is approximately SGD11.8mil (RM34.5mil), and is expecting to gross SGD576k annually, pre-tax. this gives the yield to about 4.9%, or post-tax around 4%. It is also eyeing on Megan Avenue Property, which is cheaper, and is intended to yield around 4.75%, post-tax. It is also eyeing on the third property in Bangsar South, which is expecting to yield around 3.9%, post-tax. The yield, for me, is quite appalled.

5. Rather than raising right issues to fund the investment properties at Point (4), why not just fund the Klebang project? Based on the latest multiple proposals, it is also silence about the Marina Point Project.

6. Based on the big dreams embraced by the BoD, do they think that this right issues are sufficient for all these? Or will there be another round, or rounds, of right issues subsequently? Or are they intend to get a bank loan to fund all these, especially the investment properties? In my opinion, this doesn't look feasible. Even if they are planning to get additional borrowings from the bank to fund the investment properties, what is the interest rate to get the loan from the banks? Is the interest rate going to be lower than the rental yield of those properties rented out?

IMO, I won't touch on this counter. Get a better one. I'd rather throw my money in PBBANK or ALLIANZ or such counters to have a nice sleep every night.