Moneysifu, the loan stock conversion issue has been discussed many times. Upon conversion, temasek and parties in concert will end up with 80 to 85% of common stock. A corporate exercise has to take place
Even at 15 pe diluted for a stock with such earnings visibility and dividend yield is still value
Anyway, looks like many traders who were looking for some robust quarterly growth is disappointed. Then again, the last quarter was also sold down even with spectacular profit
even trading by USD can have forex losses. So please be rational, not all export counters will really benefit from weak currency in RM. Operationally, SAM is given a satisfactory result. I believe most of the traders expect SAM will show better Forex gain and yet disappointed.
It looks like the market is speculating the possibility of a corporate exercise to take place based on hints indicated by the ceo in an interview with the star last week
He said temasek already owns 68% of Sam and with the iculs conversion, will not be able to meet the minimum public float. This has to be addressed
So, rather than a split or bonus which does not address the effective shareholding structure, I'm speculating Sam may have to consider one of the following
- either place out the shares to identified long term funds (most unfair to us shareholders)
- float the aerospace division and do restricted offer for sale to existing shareholders
- take the company private now and list later (most viable, since Sam has an order book that lasts till 2020 and then, possible sexy growth story when the factories for expansion are ready. List it later)
All be told, they still have until September 2017 when the iculs expire to address this issue. So, time is on their side. We can only play along and as long as the profits deliver, it's going to be my son's inheritance :)
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moneySIFU
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Posted by moneySIFU > 2016-02-18 11:03 | Report Abuse
Once all loan stocks converted to ordinary shares, SAM will have issue of public liquidity.