rilek.. we'll see the bull run later

daayuummm... this is so good.. heading to 0.45

die la i ini mcm...satu myvi sudah hilang

erm.... come on heading to 40cent

erghhh...

T4 .... contra player make their exit

xde ong la...

sold la @ 0.305... waiting lower

warming up

i smell something delicious today...

dying?

SCOMNET
17 Oct 2017.

In relation to recent announcement by this company to acquire the remaining 80% of SMP (SUPERCOMAL MEDICAL PRODUCTS S/B), this is how we see SCOMNET value. SCOMNET already owned 20% of SMP.
Reference for the above exercise as per below.
Ref: http://www.bursamalaysia.com/market/listed-companies/company-announcements/5572657

What do we see?
How do we see it?

SCOMNET selected information.
Current price of SCOMNET: RM 58 mil. @ 24 sen per share.
NOSH*: 243 mil.
Net Profit T4Q: RM 2.5 mil.
Book Value: RM 0.18. (including 20% of SMP)
*NOSH=Number of Shares.

ASSET Information.
Name of asset to be injected: SUPERCOMAL MEDICAL PRODUCTS S/B. (SMP)
Business Nature: Manufacturer of cables for medical devices.
Price: RM 80 mil. (80% portion, 20% already owned by SCOMNET).
Payment: To be paid in hybrid, RM 4 mil cash, RM 76 mil in SCOMNET newly issued shares, 400 mil new shares at RM 0.19.
Net Profit:
FY2015, RM 16.82 mil. (Not in announcement document)
FY2016, RM 16.22 mil.
6MFY2017, RM 8.71 mil, Annualized FY2017: RM 17.42 mil.
Valuation for SMP acquisition: PER 6.17x, based on RM 100/16.22. SMP price of RM 100 mil for 100% of SMP.

This information was not provided in the announcement proposal. However, it can be found somewhere else.
Net Asset of SMP: RM 55.997 mil.
Therefore, SMP is acquired at 1.79x book value. By this measure, SMP is not cheap, but using its PER method, it looked super cheap.

ACTUAL addition to SCOMNET's book will be,
RM 55.997 x 80% = RM 44.798 mil.
TOTAL SCOMNET's book value after this exercise: RM 43.644 + 44.798 = RM 88.442 mil.
Since the price acquired for 80% is RM 80 mil, while the real book value of SMP is RM 44.798 mil, the difference will be recognize as Goodwill, which is going to be circa RM 35.2 mil.

VALUATION.
i. Earnings method.
Since SCOMNET itself has meager profit and mostly are equity-accounted from its 20% stake in SMP, we are going to value SCOMNET based on the same valuation it utilize to acqure the remaining 80% of SMP at 6x PER.
Therefore, SCOMNET value at 6x PER = RM 16.22 x 6 = RM 97.32 mil.
On per share basis is RM (97.32 / 243) mil = RM 0.40 = 40 sen.
From today opening price of 24 sen, this valuation method sees 66% higher SCOMNET value.

ii. Book value method.
Since we know that SMP total net asset is only RM 55.997 mil and SCOMNET net asset after acquiring SMP is going to be RM 88.442 mil. We are going to value the company optimistically at 1x Book value. Therefore, Net asset per share will be RM (88.442 / 243) mil = RM 0.364 = 36.4 sen.
From today opening price of 24 sen, this valuation method sees 50% higher SCOMNET value.

DILUTION.
After issuance of new shares to the related parties due to the structure of this deal, there will be substantial dilution to the factor of 2.65x less than current holding, should we decide to invest. 400,000,000 new shares will issued for a value of RM 76 mil to 6 individuals. Total NOSH will be 643,000,000.
Example:
Before exercise.
10000 shares bought now, means you own 4.11%.
Calc: ( = 10000 x 243000) %
After exercise.
10000 shares bought now, means you own 1.55%.
Calc: ( = 10000 x 643000) %

And, our valuation above will also be affected due to enlarged NOSH as per following.
i. Valuation - Earnings method.
SCOMNET revised value = RM (97.32 / 643) mil = RM 0.15 = 15 sen.
ii. Valuation - Book value method.
SCOMNET revised value = RM (88.442 / 643) mil = RM 0.138 = 13.8 sen.

MAJOR RISK.
a. The exercise is OFF.
b. Valuation revision to a lower valuation.
c. Shareholding dilution.

CONCLUSION.
So, should we decide to invest in this company, we should be aware that;
a. We know that SCOMNET's value after SMP's 80% acquisition should be in the range of RM 88-97 mil based on 2 valuation methods.
b. BEFORE the acquisition, market MAY bring the value of SCOMNET share closer to the valuation. HOWEVER, there's no guarantee that market's valuation and ours are inline.
c. The price per share of SCOMNET will be diluted as per enlarged NOSH once the exercise is completed, estimated to be in fourth quarter of 2017.

SO, do you see its value higher upon completion of this exercise?

Reference:
SCOMNET proposed acquisition announcement.
SCOMNET latest quarterly report, Q2FY2017.
SCOMNET latest annual report, FY2016.

something is cooking ...

today crawling slowly... too fast later got uma...

nice one mah niggah

come on baby... clear that road block pls..@ RM 0.30

long way to go....Rm 0.50 can aight

come come. lai lai.... dont missed the boat

im screwwwwed up

hoohohohoohohooh...

oh my baby~~~

mistakenly key in at higher price. #FML

habis popit ...huhu

adoyaii...sakit woo tgk its dropping

i know the ex-date, the price will be reduced corresponding its dividen amount..

But

the announcement said that 3rd July for ex-date and 5th July is the entitlement date?

do i need to hold until 5th July?????

anyone can confirm?

sell rm 2 on monday still got dividen 20.5cent right?

so i hv to hold until 5th july 1600 hrs?

what does mean by ex-date 3rd july & 5th july entitlement date?

still can enter this high?

sweet~~~~~~~~~~~~~