Was informed by an "expert" that both OCK and its warrants are breakout stocks and the warrant is better than the mother share in TA. Its a bonus to have both FA and TA.

A "smart investor" and "technical expert" informed me both mother and warrants is on a strong "breakout". For me, its a bonus.

Thanks to Bones. Management confirmed to leverage on CJK in the quarterly announcement and last 2 years, spent RM50m plus on the new multilevel warehouse. Can consider the upside based on these two events. Do your research.

According to a cosec of a PLC, the deadline to implement "capitalisation of share premium into share capital" is 31 Jan 2019. The effective date of this compliance is 1.2.2017. Company can choose to implement bonus issue to utilised the share premium (with free warrants is also possible).

OCK share capital is RM87m. Share Premium is RM157m. It has the ability to issue bonus 3 for 2.

The more crucial issue is OCK:
1) signing long term co-tenancy with MPT in Myanmar; and
2) to seal the remaining 2,000 towers, build and lease back with Telenor.

These 2 events can happen in less than 6 months time, and UOB indicated, rerating will be due after achieving both events.

Ok. Will do. After all, the mother first TP1.00 & the second TP1.30 after confirm 2000 more towers and higher tenancy ratio. Risk is manageable.

RHB latest report TP1.55, too conservative for its water, hydro and plantation biz. Should at least add another RM100m into its valuation.

accumulate? what say you, zoom?

Most analysts gave a TP of about RM1.50, after ending the contract draught with MRT2. How much do you think if they secured LRT3 and/or Gemas projects? Capital City may gave another surprise & its all in cash. More dividend?

agree, upside is about 30%.

TA valuation & TP of RM1.45 is a bit conservative because:

1) Underestimates water/plantation/hydro/solar projects
2) Too conservative on construction margin
3) Other smaller engineering, mechanical and construction projects
4) underestimate capital city recognition

Another 10-20% upside is achievable.

Xinquan's share price and fundamental seems too good to be true. Warren Buffet said, "if it seems to good to be true, it probably is." Let's hope JAKS deal in Vietnam is not.

Yep.

UOB KayHian (27 Feb 2017) - Growth opportunities in Southeast Asia to drive earnings at CAGR 17% over the next 3 years. (TP 1.00).

Key rerating catalysts 1) additional 2,000 sites to be awarded in the near future 2) growth in tenancy ratio for existing tower assets (New TP 1.34)

Like you said, the 2,000 towers is already in their bags, and new tenants' negotiations is ongoing. Both catalysts will be achieved in next 3 to 6 months. By then the new TP is RM1.34. By end of the year the warrant will worth .......6x sen? Pick your favourite number.

MrOTB, Welcome back. If Gadang can keep up with its double digit growth, more rerating will come.

Not many looking at their Water, Hydro, Plantation & Solar, when mature, can contribute reasonable return. Focus how much of the Shareholder' Fund invested in these sustainable income.

They have similarity to OCK tower ownership biz that many may overlook. Separate the Sustainable Earnings biz (investment - lower ROE due to gestation period of project)) & Its normal biz ( i.e. construction and property - higher ROE). From there you will realised, the sustainable earnings biz should be given higher weightage.

After all, Gadang, without sustainable earnings has double digit ROE, with sufficient order book like now, should at least deserve double digits PE multiple, and, what more are net cash (how many developer or contractor has net cash and growing).

More contracts, means, higher rerating.

27 Feb 2017 UOB KayHian - Growth in Southeast Asia to drive three year earnings CAGR of 17%. Key rerating catalysts: 1) Additional 2,000 sites to be awarded in near term 2) additional tenant for existing tower assets

FY16 Core Profits RM30m. FY16-FY19 CAGR = FY16 CAGR of 17% FY19 = RM48m. Rerating to say RM1.34, OCK warrants will attain about 63sen.

Monday share price will go up further due to the announcement of the RM952m construction contract on MRT2 viaduct due to rerating.

Before: divided by 2.5
After: times by 2.5
Add free warrants: times 0.5

So, closing price is RM1.26
Before: RM1.26 x 2.5 = RM3.15
Plus half of free warrants = RM0.69 x 0.5 = RM0.345
So, total Before Bonus+Free warrant = RM3.15 + RM0.345 = RM3.50
You may want to add back dividend RM0.07
If you sell everything on Monday at these prices, you are selling at RM3.57 (higher than the MD)

Of course: Monday prices will goes up further due to the announcement of the RM952m.

Not surprise Gadang can provide double digit growth with this RM952m project. Earnings will improve to above RM100m and rerating to PE 10-12x is not surprise.

(side track a bit, can also take a look at OCK-WA, I believe ripe for picking this year).

Ooops. Overlook. Thought it closed in Jan 17, takes 3 months. So, now can look forward for remaining LRT3, Hospital & RAPID or other new tender? So can expect double digit growth. From good to great.

thanks. this RM952m contract can easily last 2-3 years. Not surprise rerating soon. One more V205 will be announced in April or May. Can hold for medium term, and wait for the water, plantation, hydro and solar comes in. CAGR will be good, double digit is possible.

Interesting development. Co just collected about RM30m from the sale. Let see what do they do with the money. Something better than their own biz?

@Zai Zai, if someone bother to look into the breakdown of shareholders' equity of RM420m between tower ownership biz + Non-tower ownership biz, one will realise the potential, and ROE derives from each biz.

Figures not convincing yet at the moment.
FY15 (26m), FY16(26m) FY16 before EI (31), FY17 Estimate (38-40m), FY18Forecast (40-46) = Once they see growth figures in FY17, more will see the potential.
Then, like you say correctly, higher premium for growth stock will come in, hopefully by then warrants >33 sen. But it takes a year before we see the FY17 results, provided you are still around.

Based on closing of 8.3.17, warrants premium is 11.42% @ 26.5 sen (mother is 87.5sen/exercise price is 71 sen). Last one year, premium is around 14-15%. It is an opportunity.

Based on today closing 87.5 & 26.5, premium is at 11.42%. Assumed price maintained at 87.5, with premium of 14% (average for past year), warrant is 28.75. There is opportunity here.

WA's premium dropped to 12.6%, I remember it went as high as 18% once upon a time. Gearing is 3.3x (Gadang is 2.0x and Ekovest is 1.3x). Still has about 48 months before expiry.

Financial is getting better (excluding exceptional items, PAT is RM31m FY2016), increased 21% vs FY2015. FY2017 with Myanmar & Vietnam towers earning included + tenancy growth, earnings will grow another 29% (excludes exceptional items).

Time to add some, despite drop today.

What I think is irrelevant. Despite the civil war which happen many many months back (I do not know how minor or major - but based on reading - happen at the northern side, not entire Myanmar), OCK manage to build about 70% of the 920 towers. Yes, there are some delays, nothing major. I did not see telco operator pulling out, in fact, if not mistaken, a new telco operator was awarded a licence. So, have to continue to monitor this situation. When prices down, there will be news saying, civil war, debts too high, this and that. I will focus on the engines that that generate the cash flow, how many new towers each months, in Vietnam, what is the development, Indonesia, what is happening, Malaysia and development on solar or LTE development that OCK benefit. Anyway, the civil war may be a blessing, Telenor redrew their plan and requested more towers new the city/town, which has higher chances of co-tenancy. Look at their quarterly, see any progress or regress.

Just like, despite the QE and overvaluation of DJIA, it continues to move up for last 8 years. Coming to 9. Despite the Fed say so many times, interest rates only up a few times.

@Hippo 2) The MD/Aliran - do not hold any warrants in the Top 30 warrant holders. Don't take the forecast too seriously. Normally this assumption is not practical. Even to exercise half the warrant you need to have RM90m. Lets take a look in 2016 Annual Report who is the Top 30 warrant holders.

I try not to focus too many stocks. Ideally is 5, but at the moment, I only have 2. Will slowly diversify. The other is Bornoil - mainly keen on the GOLD for medium term. Still need more detail to have more certainty. I prefer one or two great ideas a year. This is personal preference.

1) Normally warrants traded at a premium, and this will deter investors to convert (lose money) prior expiry, in practice.
2) Do not understand your question on 95.2%, as I did not make that statement. Where did you get that statement?
3) Ignore the code.

About 4 years to expiry, Dec 2020

looks like a "good deal" on condition that not too much donation required.

translated: WA 13.6% premium is attractive with almost 4 years to go + gearing of 2.88x. WA is a good leverage on the mother share with the ASEAN growth story materialising in the next few years.

checkmate?

28.5 + Exercise Price 71 = 99.5
99.5 less traded earlier at 88.5 = 11
11 divided by 88.5 = 12%

(mind you Gadang warrants is traded at as high as 40%, now is 35%, for course, cannot be compared, just for illustration)

12% premium for about 4 years term (assumed mother price doesn't move down too much - earnings is improving).

While I am writing, the premium is 13% (mother is 87sen, warrants is 27.5 sen).

Refilling popcorns and some warrants. Getting more exiting, premium fluctuate around 12% to 15%. Now, mother is 88.5 sen, premium is only 12% for warrants at 28.5sen. Good volume.

Attempt #6. Some say still can buy at 28 sen. Hmmm...... more co-tenancy will be announced soon? Or...........

@allanchong1988 = Cheah family sold about 25 million shares only. (each person must give separate notices to the company) After selling, they still have 1,230 million shares or 42%.

They sold about 2%. The DY for the SREITS is about 5.7%. Perhaps they found some other biz can provide a higher return than 5.7%.

Accumulate when 17sen or less. Wait for earnings to stabilise. When you start a business with RM200-300m or more, you don't expect immediate result do you, especially, there are in mining biz.

Company sell 41m treasury shares at 17.5 sen, hmmm...... Before selling, treasury shares outstanding is 171.0m. Not sure the intention, could it be lower earnings expected? Then buy back when lower?

Was it 7 days or 14 days when a person must give notice when he or she become substantial shareholders or ceased to be substantial shareholders. I wonder, what is the penalty for late to give notice?

@geary - I disagree with you on the first sentence. Refer Mudajaya. I have no view on the stocks or its direction.

@excelyou you did your homework. Good. That's what I said, Gadang has a good chance of getting ONE as 8 of the 11 winners of MRT1 has got their MRT2. Only, now 2 left for 3 viaducts. Since Muhibbah is out, Gadang submitted V205 AND V206. Thanks for highlighting on Muhibbah. Now we know, Gadang chances are even higher.

disagree (the first part)

(1)split - boleh,
(2) bonus - boleh, max, 1 for 10 - tak banyak distributable reserve lah
(3) free warrants - boleh, sikit saja

Catalysts we may want to monitor (that will increase the Company's intrinsic value):

1. SEATH's adding 300-400 sites p.a.
2. Myanmar tenancy ratio growth
3. Growth in TNS division locally + regionally

FY2017, OCK's EV/EBITDA multiple will reduce to 6.5-7.0x. Up to market.

Currently, based on Axiata's Jan 2017 deal, 12.5x is given for 22% & 11% from INCJ and Khazanah a total sum of about RM2.7 billion. Upside is good.

Great. Can slowly accumulate now, since the market sees it as negative (flattish results). 23 sen not bad.

Taking out fair value adjustment, FYE16 vs FYE15 is RM205m vs RM210m. So, results is flattish. Not too bad with this type of environment. The more critical questions is going forward on the success of KSL Mall & township in Klang with GDV of RM10b. This is the make or break for KSL.

FYE16 is RM203m (exclude fair value adjustment of RM112m). MCap today is RM1.172b. Historical PE is 5.8x. Have to see prospects & go into details before can conclude the potential, if any.

The result is a lot better than expected, taking into account exchange loss, pre-acq expenses, and pp expenses (previous year a 4.7m revaluation gain).

@zoomboom, a lot better than expected, taking into account exchange loss, pre-acq expenses, and pp expenses.