Posted by freedomheal > 2016-12-24 00:01 | Report Abuse

Come on man, the share price increase but the volume din not follow together and the next day selling pressure is stronger than the day before it...who is selling??you??me?? You know I know lar..

Posted by noah > 2016-12-24 17:37 | Report Abuse

Q2 result will not be good as it's a traditionally low season.
So yeah its rational to say it will continue dropping.
But based on this kinda of vol and only 1 cent diff, we shall say not drop yet for the time being.
All is just some buy sell activity from retailer which can't drive the price in any direction.
Wait the big player movement 1st, as Prlexus hav many ut shareholders.
They will take you for a ride..

Posted by Ultramen > 2016-12-27 11:49 | Report Abuse

aiya easy man，who want to sell just sell， who want to buy just buy.
want to wait for 1.2 just wait.

Posted by Dolly_Chai > 2016-12-27 15:33 | Report Abuse

wow... another 1,300,000 of warrant had been exercised.. wth... the EPS is being diluted like there is no tomorrow... someone can comment on this?

Posted by Dolly_Chai > 2016-12-28 10:26 | Report Abuse

R40s, can you share with us your view on the warrant exercise? thanks

Posted by Dolly_Chai > 2016-12-28 11:05 | Report Abuse

R40s, since the exercise price of warrant is only RM1.20 (in-the-money now, as compared to current share price of RM1.39)... do you think many holders will convert their warrants into mother share? I know warrant price is now RM0.53... but if the holders can't see his warrant at RM0.53 (no interested buyer), he may as well convert into mother share... then immediately sell these new mother shares and make some quick profit... this is possible, right? if this happens, more mother shares (outstanding shares) will cause more EPS dilution...

this is the major issue i am seeing... any comment on this one?

the warrant volume is not low.. it is 56Millions! vs 170M mother shares.. huge ratio!

Posted by dompeilee > 2016-12-28 18:39 | Report Abuse

Ex dividend still trading above my average entry cost last week? Niiiiice!

Posted by noah > 2016-12-28 18:55 | Report Abuse

if you are retailer, why will you exercise your warrant when the warrant is trading at a huge premium of RM0.34/warrant?

those exercise warrant must be big player where the open market is unable to take their warrant if they sell it.

Posted by NOBY > 2016-12-28 18:59 | Report Abuse

The exercise of the warrant could be another way to raise cash for the company to undertake its expansion. Just my guess.

Posted by R40s > 2016-12-28 22:19 | Report Abuse

Hi Dolly,

I think Noah made a good point, the big quantity of warrants converted and at exactly 1300 lots, it is most likely made by a substantial shareholder, who received a lot of free warrants during their RI subscription in June. Because of very low liquidity of warrants traded at only about 200 lots per day and not easy to sell off at good prices, so they converted their warrants into shares, so that they get entitled to the dividends just before ex-date.

Actually the warrants is not "in-the-money" yet (share price must go higher than warrant price + rm1.20), they paid a theoritical premium of rm0.33 to get the new shares (rm1.20 + 0.53 - 1.40) or ~24% premium. Although it does not make good sense to small retailers like us, but to the big investors who are willing to hold for long-term, they wouldn't mind paying a premium to own more shares instead of buying from the market, as long as they are confident of the Company's future and potential for rapid growth.

Since there is no further announcement on who is the owner of this 1,300,000 new shares, it means this is not a shareholder who own more than 5% shares, because such shareholders must always announce their changes in shareholding.

About share dilution due to warrants converted, I believe the market has already factor-in and reflected in the prices, even when the shares went ex-RI, the ex-RI price adjustment have considered the full conversion of warrants already. The conversions require rm1.20/share, this is 20sen higher than the RI price of rm1.00, so the Company actually benefit positively, not negative, because the money can be used to reduce bank loans taken to build the 2 new factories in Vietnam and Johor, as the RI exercise raised 70% of the required construction costs, the remaining 30% intended to be financed by internal funds and bank loans.

Posted by noah > 2016-12-28 22:40 | Report Abuse

R40s thanks for your analysis ... xD...
very informative & useful

Posted by Dolly_Chai > 2016-12-29 10:03 | Report Abuse

hi both noah and R40s, thanks for your analysis... i agree with what you said...

but here comes my another big concern:
Since it is most likely that the big chunk of warrants were exercised by big players (as they find it hard to sell to retailers from open market at such big volume); this means that they own a lot of warrants...

and they may continue to exercise their warrant (despite the current warrant price is RM0.53)... but the problem is, when they subscribed RI, these warrant were given free to them.. so their cost to exercise is just RM1.20 (they do not need to buy warrants from others at RM0.53 to exercise it)... and after they exercised, they can immediately sell to open market at RM1.40 to earn RM0.20...

Right? This will cause many more warrants to be exercised...

other than this issue, everything looks very good for Prlexus in terms of all FA valuation.

Actually i am still holding this share... but would like to know what you guys think...

thanks.

Posted by newbie_Investor > 2016-12-29 10:08 | Report Abuse

Why don't they just sell the warrant at RM0.53 ? Why want to earn less ?

Posted by Dolly_Chai > 2016-12-29 13:37 | Report Abuse

hi newbie_Investor, our guess (mine, noah & R40s) is they can't find interested buyer to buy their warrants from open market... see R40s comment above which is very clear.. the volume is so low and not many buyers are interested to buy the current warrant as the cost is higher than current price of the mother share

Mother share: RM1.38
Cost for buying warrant + exercise price = RM0.53+RM1.20=RM1.73 (which is 35sen higher than buying the mother share directly from open market)...

So you can see how not many are interested in buying the warrant...

unless, they are super confident of future appreciation of mother share price and would like to buy at better leverage, else not many will buy the warrants.

that is why the big warrant holders are exercising their warrants recently in big volume...
and that is really bad for EPS dilution...

What I am afraid is there will be more warrant exercise for quick gain (exercise then sell immediately)...

Posted by noah > 2016-12-29 16:20 | Report Abuse

my wild guess is they might be still holdings a huge chunk of warrants after exercising some of them, that's why they don't want the warrant price to dive down creating panic.
(or let them sell their warrant bit by bit everyday)

and if they are to exercise the warrant and followed by selling the shares in open market, it would be more sound to sell the warrant bit by bit everyday since there is a 35 sen premium.
earn 53 sen or 20 sen, its a no brainer. xD...
because when they sell the converted share open market, the drop in share price = more drop in warrant price.

anyway just a guess, only they know their plan.

Posted by noah > 2016-12-29 16:23 | Report Abuse

if mother drop to RM1.30, the warrant is worth only RM0.10.
which is a 50% drop in value, and the market price should be adjusted down by more than RM0.10.
and if mother RM1.20, warrant is worthless sheet of paper.


not sure how they value warrant,
not an expert of warrant as i don't usually buy any warrant.

Posted by blueberg > 2016-12-29 16:37 | Report Abuse

Posted by noah > Dec 29, 2016 04:23 PM |
if mother drop to RM1.30, the warrant is worth only RM0.10.
which is a 50% drop in value, and the market price should be adjusted down by more than RM0.10.




Just wondering how the 50% is arrived????????

Posted by noah > 2016-12-29 20:07 | Report Abuse

from current value of warrant when mother is RM1.40.
RM0.20.

today is RM0.17 since mother 1.37.

Posted by Dolly_Chai > 2016-12-30 10:33 | Report Abuse

yes, noah, agree with you.. only the warrant holders know their own plans...

anyway, i still own Prlexus due to its good fundamentals and potential good growth in 2017/18 after the expansion in China, Vietnam and Johor (fabric mill)... and TPPA will likely help boost sales to other TPPA alliances (tax exempted)...

Posted by noah > 2017-01-01 11:07 | Report Abuse

The reason stock price is hammered down might be due to the likely abolishment of TPPA.
Trump is the factor, many scare he will implement import tax.
But on the other hand, consumer products price will increase a lot if he implement thoSe taxes or even when factory mpve their operation bck to usa, the overall cost will still be higher even with tax exemption, and he know he will only serve 1 term if this occur.

I am in the view that it's not possible and not feasible to move labour intensive industries such as clothing back to usa.
It's having a hard time to get enough labour force in malaysia and imagine what if it's in usa.

Posted by noah > 2017-01-01 11:08 | Report Abuse

In the coming 1 or 2 yrs.
This company will enter an exciting growth phase.

Posted by gohkimhock > 2017-01-01 11:25 | Report Abuse

Strong growth for Nike does not mean strong growth for Prolexus. Nike have goodwill. Ppl buying Nike is bcos of its branding. Nike can enjoy high profit margin whereas Prolexus cant.

Just like Coca-Cola, who cares which supplier supply it with sugar. The Coca-Cola is still there and the ppl are enjoying it.

Posted by chamlo > 2017-01-02 12:13 | Report Abuse

Keep dropping. RM 1 final bottom?

Posted by Dolly_Chai > 2017-01-03 10:43 | Report Abuse

goh, u have a point here... there is no guarantee that Prlexus can enjoy the growth Nike/Under-Armour is having, as there are also other suppliers such as Magni etc... but if what the management revealed is true, they are getting increasing demands from Nike and Under-Armour and urge from these customers to expand their capacity... this is why Prlexus is expanding - to cope with the increasing demand (as requested by these customers).

Posted by Dolly_Chai > 2017-01-03 10:45 | Report Abuse

unless the management is lying to us.. than that is a different story...
so now it is to examine if Prlexus is a transparent and honest company with high integrity...
we can tell from their previous past records... read back their annual reports/quarterly reports to check

Posted by Dolly_Chai > 2017-01-03 11:27 | Report Abuse

noah.. in 2016 annual report, under the chairman's statements of the future prospect, it is stated that the company expects to continue to grow.. i think this is something positive...

Posted by red_85 > 2017-01-03 11:58 | Report Abuse

bad report, all retailer already stay away..still in downtrend..
not easy to climb up in such bad sentimental market. I think you guys need to stuck in here for sometime..

Posted by noah > 2017-01-03 12:30 | Report Abuse

retailer staying away is not necessarily a bad sign.
most retailers is those that buy high and sell low.

do you think retailer have the force to drive price in any direction?

and if you are a syndicate, before you push the price of any company, you would wish there having lots of or less retailers in it?

anyway, PRLEXUS is not suitable short term play due to uncertainties in US policy and the capex requirement for initial expansion.
Hold if for min 1 year to bear the fruits.

Posted by Dolly_Chai > 2017-01-03 12:53 | Report Abuse

agree with noah.. i bought into it for its future growth (of course, its current fundamentals must be good)... my only concern is the large number of warrants...

Posted by red_85 > 2017-01-03 14:02 | Report Abuse

yea, short term not good yet..tat why i rather wait first..keep money in the bank first..i rather buy late than stuck earlier..

Posted by Dolly_Chai > 2017-01-04 09:35 | Report Abuse

red_85, i did the same mistake last time.. keep waiting and the price keeps going up and ended up never get to buy at good price anymore... think this way.. when ppl are not interested to buy yet, you have to start collecting... coz when ppl started to buy, it is no longer cheap

Posted by Dolly_Chai > 2017-01-04 09:36 | Report Abuse

ColdEye said a good share is worth to keep 2-3 years.. why not?

Posted by noah > 2017-01-04 16:34 | Report Abuse

There's a lot of retailers that like to chase high instead of accumulating share at bottom.
This single factor had coz more than 90% of retailer making a loss.
Overcome this and it would increase your stake of outperform the benchmark.

But of course buy on weakness does not apply to those shares that drop a lot due to deteriorating fundamental like tekseng.

Posted by dompeilee > 2017-01-05 10:40 | Report Abuse

Secured the latest dividend...and now it's HIGHER than my entry point of 1.38 :D

Posted by Dolly_Chai > 2017-01-05 14:36 | Report Abuse

agree with what noah said...

Posted by dompeilee > 2017-01-07 08:40 | Report Abuse

Not bad ah! Nabbed a short-term dividend...now can sell the shares I bought Dec 19th :D

Posted by comebackisreal > 2017-01-07 21:43 | Report Abuse

Not bad . Get dividend and have little profit.

Posted by Mgician > 2017-01-09 15:37 | Report Abuse

accumulating ~~~

Posted by Jenas Tan > 2017-01-11 11:43 | Report Abuse

Why no movement at all??

Posted by Dolly_Chai > 2017-01-12 16:05 | Report Abuse

Jenas... check the price today... dun worry, Prlexus is a value share for investment... it has great ROIC, EY and FCFY... just dividend not so good... and i dun like the huge number of warrant too.. else, it is almost close to perfect...

Posted by Mgician > 2017-01-12 17:19 | Report Abuse

not bad

Posted by Dolly_Chai > 2017-01-13 08:57 | Report Abuse

finally it moves... hope it will go up further...

Posted by Dolly_Chai > 2017-01-13 09:00 | Report Abuse

my valuation for Prlexus based on EV/EBIT=10 will give fair EV = RM380.850million, which translates into RM451.586 market capitalization.

the intrinsic value therefore is calculated to be RM2.5298.
that means a whooping 72% of margin of safety for this share....

*note that I am using TTM for the EBIT calculation.

Posted by SuperLaber > 2017-01-14 16:08 | Report Abuse

Hold tight, ProLexus coming back!!

Posted by Jenas Tan > 2017-01-15 18:31 | Report Abuse

dividend tmr.. drop another 2 cents?

Posted by R40s > 2017-01-15 23:53 | Report Abuse

Jenas, dropped 2 sen on a week ending day with only 34 lots traded, no need to worry at all.

Base on Dolly's calculated intrinsic value at Rm2.53, give it a 20% discount due to it's small share base and relatively low liquidity of stocks traded, the fair price should still be above Rm2 or higher after the new factories are completed in Q3-Q4 this year.

Posted by SuperLaber > 2017-01-16 09:36 | Report Abuse

Jenas, today is not dividend ex-date, it's the date company paying out dividend, the price won't dropped/adjusted, btw cheers for the dividend!! Hope more to come :)

Posted by Jenas Tan > 2017-01-17 14:44 | Report Abuse

Why no movement? ;(

Posted by Dolly_Chai > 2017-01-18 12:40 | Report Abuse

Jenas, yes, like what R40s sifu has said, even if we give a 20% discount to the intrinsic value, it should still worth >RM2.00 for this gem... and dun forget about their track records (consecutive years of annual growth), and their current expansion activities... u go read the chairman's statement in their annual report, it is stated that the management expects the company to continue to grow...

Posted by Jenas Tan > 2017-01-23 18:59 | Report Abuse

When will boom this counter?