IMPRESSIVE IMPRESSIVE IMPRESSIVE ...... What more can shareholders hope for. Open at 27c and surge to a high of 46.5c in less than half an hour, an increase of 34.5c over the IPO price of 12c. At this price, the Group's market capitalization just shot up to more than RM120 million from RM35.4 million. Shareholders should be laughing their way to the bank. Big ang pows for those who managed to get a piece of the IPO subscription. This is only the 1st trading day. How much more can it go ?
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Wednesday, August 29, 2012
INGENS - A Revisit
On August 23, I posted an article regarding "INGENS - Riding the waves" when the mother share was riding high at 51c and the warrant at 19c. Since then, in a mere 5 trading days, the mother share has lost 16c (31.4%) and the warrant had given back 8c (42%) of its initial value. Has it reach its bottom or will it still plummet lower ?.
I am sure that there are people (traders, punters, investors) who made tons of money when the stock was rallying up from 12.5c to 51c (especially those who exercise the Rights Issue at 10c and got all the FREE warrants) and there are also a handful of people who lost substantial money when the stock came tumbling down. For those who are still holding, a big decision has yet to be made.
Should you :
1) hold on to the shares (hopefully one day it will recover above your buying price)
2) sell and cut your losses (bite the bullet and count your losses)
3) buy more to average down your cost (investing more money into it)
It is a difficult decision and a tough call that only you can and should make. Personally, I had been in this situation before and had made the wrong call (for 2 particular counters). Eventually the counters got delisted and i am still holding the unlisted stock until today. So much for the bad experience. Don't get me wrong, I am not implying in any way that INGENS will get into the same route. According to the INGENS BOD's announcement and their financials, the company is potentially in the growth stage with substancial increased in revenue and profits.
I did highlight in my earlier article about the risk of exercising the warrants, paying much attention to the exercise period. If you had bought the warrants at 19c and you intend to go through the warrant exercise, at today's mother share price of 35c, you still have a small upside buffer of 6c as your total cost of exercise is 19c+10c which is 29c. Bear in mind that the 6c buffer is not a lot of comfort considering that the mother share had dropped 16c in just 5 trading days.
Like I said "Everyone's trading style and apetite for risk and rewards is different". This kind of stocks provides lots of volatility and lots of upside when the trade is timed right and if timed wrongly, you could be losing a chunk of your savings. Do consult your investment advisor for their advice.
I am sure that there are people (traders, punters, investors) who made tons of money when the stock was rallying up from 12.5c to 51c (especially those who exercise the Rights Issue at 10c and got all the FREE warrants) and there are also a handful of people who lost substantial money when the stock came tumbling down. For those who are still holding, a big decision has yet to be made.
Should you :
1) hold on to the shares (hopefully one day it will recover above your buying price)
2) sell and cut your losses (bite the bullet and count your losses)
3) buy more to average down your cost (investing more money into it)
It is a difficult decision and a tough call that only you can and should make. Personally, I had been in this situation before and had made the wrong call (for 2 particular counters). Eventually the counters got delisted and i am still holding the unlisted stock until today. So much for the bad experience. Don't get me wrong, I am not implying in any way that INGENS will get into the same route. According to the INGENS BOD's announcement and their financials, the company is potentially in the growth stage with substancial increased in revenue and profits.
I did highlight in my earlier article about the risk of exercising the warrants, paying much attention to the exercise period. If you had bought the warrants at 19c and you intend to go through the warrant exercise, at today's mother share price of 35c, you still have a small upside buffer of 6c as your total cost of exercise is 19c+10c which is 29c. Bear in mind that the 6c buffer is not a lot of comfort considering that the mother share had dropped 16c in just 5 trading days.
Like I said "Everyone's trading style and apetite for risk and rewards is different". This kind of stocks provides lots of volatility and lots of upside when the trade is timed right and if timed wrongly, you could be losing a chunk of your savings. Do consult your investment advisor for their advice.
PASUKHAS - an IPO Overview
Investors are always on the hunt for a quick capital gain opportunity, especially in new listing counters. Today, we are taking a look at Pasukhas, a Mechanical and Engineering company en route to a listing on ACE market of Bursa Malaysia on August 29. The Group had been in the industry for 27 years and had successfully completed over 500 projects across Malaysia, Indonesia, Sri Lanka, Jamaica and the Gulf Cooperation council countries.
Pasukhas Group's listing exercise involves a total public issue of 90 million shares at 12c per share (raising a total of RM10.8 million) of which 55 million is by way of private placement to identified investors (which had been successfully taken up), 10 million to the public and the balance 25 million to eligible directors and employees. The public portion of 10 million shares had been oversubscribed 74.04 times, which indicates a very high market interest and demand.
For its last financial year ended December 31 2011, the Group's revenue fell to RM25.82 million from RM40.48 million in 2010 and RM46.41 million in 2009. Similarly, the Group's net profit declined to RM1.23 million from RM3.89 million in 2010 and RM4.29 million in 2009. For the financial period ended 31st March 2012 (1st Quarter result), the Group posted a revenue of RM5.2 million and a net profit of RM0.77 million.
Pasukhas's performance could certainly be better. From the comparative financials for the 3 years, it clearly indicates a trending down in revenue and profitability. Saying so, the decrease in revenue could be due to factors/constraints such as undeployed projects on hand (justified by the RM68 million order book), lack of funds in capitalizing opportunities / market expansion and others. In such case, the listing of Pasukhas and having access to additional market funds will do much good for the business in the future. The Group targets to bid for some RM100 million worth of jobs oversea next year. Its has a healthy order book of RM68 million which can last the group for at least 18 months. Amid the weaker results, investors with a longer-term growth horizon could see it as a buying opportunity.
Upon listing at IPO price of 12c, Pasukhas will have a market capitalization of RM35.4 million. With such huge public portion oversubscription and the successful placement of the other balance of shares, I do not foresee any downside risk to the IPO price. Instead, I predict that the upside drive will be huge in the 1st half session of trading, possibly driving the stock upwards towards 18c (a potential 50% upside on IPO price). With strong market forces and support momentum in the next couple of trading days, the stock could even see a high of 30c.
For those who managed to get a piece of the 10 million public shares, they should be looking forward to some big ang pows and for the unsuccessful, there's always an opportunity to punt the market when it opens. It will definitely stay as one of the top ten counters for next few trading days. The stock name will be traded under PASUKGB.
This article is not an encouragement or call to buy or sell any securities. Personally, I did not subscribe to the IPO shares (with much regret now) but MAY be doing some small punting when it opens (depending on the price).
Pasukhas Group's listing exercise involves a total public issue of 90 million shares at 12c per share (raising a total of RM10.8 million) of which 55 million is by way of private placement to identified investors (which had been successfully taken up), 10 million to the public and the balance 25 million to eligible directors and employees. The public portion of 10 million shares had been oversubscribed 74.04 times, which indicates a very high market interest and demand.
For its last financial year ended December 31 2011, the Group's revenue fell to RM25.82 million from RM40.48 million in 2010 and RM46.41 million in 2009. Similarly, the Group's net profit declined to RM1.23 million from RM3.89 million in 2010 and RM4.29 million in 2009. For the financial period ended 31st March 2012 (1st Quarter result), the Group posted a revenue of RM5.2 million and a net profit of RM0.77 million.
Pasukhas's performance could certainly be better. From the comparative financials for the 3 years, it clearly indicates a trending down in revenue and profitability. Saying so, the decrease in revenue could be due to factors/constraints such as undeployed projects on hand (justified by the RM68 million order book), lack of funds in capitalizing opportunities / market expansion and others. In such case, the listing of Pasukhas and having access to additional market funds will do much good for the business in the future. The Group targets to bid for some RM100 million worth of jobs oversea next year. Its has a healthy order book of RM68 million which can last the group for at least 18 months. Amid the weaker results, investors with a longer-term growth horizon could see it as a buying opportunity.
Upon listing at IPO price of 12c, Pasukhas will have a market capitalization of RM35.4 million. With such huge public portion oversubscription and the successful placement of the other balance of shares, I do not foresee any downside risk to the IPO price. Instead, I predict that the upside drive will be huge in the 1st half session of trading, possibly driving the stock upwards towards 18c (a potential 50% upside on IPO price). With strong market forces and support momentum in the next couple of trading days, the stock could even see a high of 30c.
For those who managed to get a piece of the 10 million public shares, they should be looking forward to some big ang pows and for the unsuccessful, there's always an opportunity to punt the market when it opens. It will definitely stay as one of the top ten counters for next few trading days. The stock name will be traded under PASUKGB.
This article is not an encouragement or call to buy or sell any securities. Personally, I did not subscribe to the IPO shares (with much regret now) but MAY be doing some small punting when it opens (depending on the price).
Saturday, August 25, 2012
TAKASO - A Promising Start
TAKASO Resources Berhad hit its highest price today, closing at 21.5c. Could this be the start of a short term rally?. Possibly so, since it just completed a private placement 13,522,000 new shares at 25c each in early August.
In order to paint a clearer picture, let us take a look at the recent financials for the period ending 30/4/2012 (9 months accumulated) in comparison with the preceeding year 2011.
Revenue 2011 : 13.19 million
Revenue 2012 : 24.74 million
My Opinion : This is very impressive as the company registered a revenue increased of 87%
Net Asset Per Share 2011 : 27c
Net Asset Per Share 2012 : 30c
My Opinion : Inline with the increased in revenue, the net asset per share had also increased from 27c to o30c. At the current stock price level of 21.5c, the company is still trading below its net asset per share.
Current Asset 2011 : 27.83 million
Current Asset 2012 : 41.86 million
My Opinion : This shows a healthy business growth. The 2 main factors attributed to the increase in Current Asset arises from an increase in Sales (with receivables increase from 4.04 to 17.67 million) and its Cash position (0.62 million to 17 million).
Current Liabilities 2011 : 16.70 million
Current Liabilities 2012 : 14.81 million
My Opinion : Looks healthy as there is also a slight decrease in liabilities arising from payment of short term borrowings and settlement of some trade payables.
From the financials, it seems that the company is preparing itself to move to the next level of growth. I would not be surprised if the stock moves up to trade within the range of 25c to 28c within the next 2 weeks. I predict that it will test a strong resistance at 30c level. If the company can deliver a good Q4 financial, then we might see the share price testing 40c.
Bear in mind that the stock had touch a high of 70c in August 2011 (one year ago). It is in everyone's mind and anyone's guesses whether it will break last year's high. For all you believers out there, keep your fingers crossed and hold on to your stocks. Do bear in mind that the stock also drastically touch its lowest point (11.5c) less than 2 months later after hitting its high last year. So, this play is considered highly volatile. The timing of entry and exit is crucial. The stock had been trending down since February 2012. Saying so, i do believe that a rebound is pretty likely to happen.
.
In order to paint a clearer picture, let us take a look at the recent financials for the period ending 30/4/2012 (9 months accumulated) in comparison with the preceeding year 2011.
Revenue 2011 : 13.19 million
Revenue 2012 : 24.74 million
My Opinion : This is very impressive as the company registered a revenue increased of 87%
Net Asset Per Share 2011 : 27c
Net Asset Per Share 2012 : 30c
My Opinion : Inline with the increased in revenue, the net asset per share had also increased from 27c to o30c. At the current stock price level of 21.5c, the company is still trading below its net asset per share.
Current Asset 2011 : 27.83 million
Current Asset 2012 : 41.86 million
My Opinion : This shows a healthy business growth. The 2 main factors attributed to the increase in Current Asset arises from an increase in Sales (with receivables increase from 4.04 to 17.67 million) and its Cash position (0.62 million to 17 million).
Current Liabilities 2011 : 16.70 million
Current Liabilities 2012 : 14.81 million
My Opinion : Looks healthy as there is also a slight decrease in liabilities arising from payment of short term borrowings and settlement of some trade payables.
From the financials, it seems that the company is preparing itself to move to the next level of growth. I would not be surprised if the stock moves up to trade within the range of 25c to 28c within the next 2 weeks. I predict that it will test a strong resistance at 30c level. If the company can deliver a good Q4 financial, then we might see the share price testing 40c.
Bear in mind that the stock had touch a high of 70c in August 2011 (one year ago). It is in everyone's mind and anyone's guesses whether it will break last year's high. For all you believers out there, keep your fingers crossed and hold on to your stocks. Do bear in mind that the stock also drastically touch its lowest point (11.5c) less than 2 months later after hitting its high last year. So, this play is considered highly volatile. The timing of entry and exit is crucial. The stock had been trending down since February 2012. Saying so, i do believe that a rebound is pretty likely to happen.
.
Friday, August 24, 2012
INGENS - Riding the waves
There isn't a day that goes by on KLSE that certain penny stocks didn't experience massive upward spikes. Traders who got in at the right timing (before the price hike) are banking in ridiculous money on a regular basis. The return can be hundreds of percent, in some cases exceeding thousand.
Just take a look at some of the movers that rock the market in the past 12 months.
HARVEST - from 8c to a high of RM2.14, which skyrocketed by an unbelievable 2,675%. An investment of RM1,000 at 8c would give you a return of RM26,750. The stock had since dropped and last traded at 45c.
NICORP - from 6c to a high of 75c, a significant 1,250% increased in less than a month. The stock is last traded at 31c.
Recently, there is a new counter (INGENS) that hits the spotlight. The mother share rallied from 12.5c to a high of 51c in just 2 weeks. The Group also did a Rights Issue exercise.
"RENOUNCEABLE RIGHTS ISSUE OF UP TO 291,175,040 NEW ORDINARY SHARES OF RM0.10 EACH IN INGENUITY SOLUTIONS BERHAD ("ISB SHARES") ("RIGHTS SHARES") ON THE BASIS OF TWO (2) RIGHTS SHARES FOR EVERY ONE (1) EXISTING ISB SHARE TOGETHER WITH UP TO 218,381,280 FREE DETACHABLE WARRANTS ("WARRANTS") ON THE BASIS OF THREE (3) WARRANTS FOR EVERY FOUR (4) RIGHTS SHARES HELD AS AT 5.00 P.M. ON 23 JUNE 2011, AT AN ISSUE PRICE OF RM0.10 PER RIGHTS SHARE".
A total of 218.38 million FREE Warrants was listed on 22nd July 2012. Investors who subscribe to the Rights Issue are making substancial gains and laughing their way to the bank. The warrants traded at a high of 24.5c and last traded at 16c at friday's close 24th August. It is trading at a huge discount to the current price of the mother share at 44.5c. The conversion price is pegged at 10c. The total price for conversion is 26c, which is still cheaper than buying the mother share at its current price. So, should investors rush to buy the warrants ?. If you have faith that the mother share will hold around this price or will not drop below your conversion price by the time you exercise your shares, then it could be worth a bet. Do take caution and consideration that the exercise period (the time you submit until the time your share is listed) might take weeks to complete. Please check with your financial adviser/share registrar for advice on warrant exercise procedures.
Will INGENS will be another HARVEST or NICORP (with 1000+% gain) ?. What is the main reason for this run ?. Is there a solid growth story for the business towards the longer term?. Will the share price be able to sustain or move higher from this level ?.
If I can still recall, the rally started from a rumour that our Prime Minister's son is taking a 10% stake in the company. Of course this is not a substanciated fact but it does help to push up the share to a certain extent.
Looking at the latest financials, the Group posted an impressive 1st quarter revenue of RM129.85 million, representing an improvement of RM127.02 million to the corresponding period in the preceeding year. The increase is mainly attributed to new ICT distribution business (Vistavision Resources Sdn Bhd) that the company acquired recently.With this increase in revenue, the Group registered a pre-tax profit of RM3.7 million as compared to a net loss of RM0.36 million in the previous quarter. The ICT distibution business accounts for RM1.83 million of the profit and the balance from Enterprise Systems. The Group should be looking forward to a more sustainable revenue model in the Group's ICT distribution business which would boost up the bottom line favorably.
The Group also set an internal target to achieved a sales turnover of RM800 million with a profit of RM12.5 million for the new financial year ending 31st March 2013 and the management team believes (no certainty and not reviewed by external auditors) that it can be achieved based on the 1 quarter's result assumption.
Is it game over yet for INGENS ? Some says "YES" and some says "The game had JUST STARTED". Everyone's trading style and apetite for risk and rewards is different. That's what keeps the market alive and interesting. As for my views, i'm not recommending investing long term in this kind of stocks as it can be very speculative and risky. The odds for picking the long term winners aren't great. I like to view them as a trading vehicle with lots of volatility and lots of upside when the trade is timed right and if timed wrongly, you could be losing a chunk of your savings.
Just take a look at some of the movers that rock the market in the past 12 months.
HARVEST - from 8c to a high of RM2.14, which skyrocketed by an unbelievable 2,675%. An investment of RM1,000 at 8c would give you a return of RM26,750. The stock had since dropped and last traded at 45c.
NICORP - from 6c to a high of 75c, a significant 1,250% increased in less than a month. The stock is last traded at 31c.
Recently, there is a new counter (INGENS) that hits the spotlight. The mother share rallied from 12.5c to a high of 51c in just 2 weeks. The Group also did a Rights Issue exercise.
"RENOUNCEABLE RIGHTS ISSUE OF UP TO 291,175,040 NEW ORDINARY SHARES OF RM0.10 EACH IN INGENUITY SOLUTIONS BERHAD ("ISB SHARES") ("RIGHTS SHARES") ON THE BASIS OF TWO (2) RIGHTS SHARES FOR EVERY ONE (1) EXISTING ISB SHARE TOGETHER WITH UP TO 218,381,280 FREE DETACHABLE WARRANTS ("WARRANTS") ON THE BASIS OF THREE (3) WARRANTS FOR EVERY FOUR (4) RIGHTS SHARES HELD AS AT 5.00 P.M. ON 23 JUNE 2011, AT AN ISSUE PRICE OF RM0.10 PER RIGHTS SHARE".
A total of 218.38 million FREE Warrants was listed on 22nd July 2012. Investors who subscribe to the Rights Issue are making substancial gains and laughing their way to the bank. The warrants traded at a high of 24.5c and last traded at 16c at friday's close 24th August. It is trading at a huge discount to the current price of the mother share at 44.5c. The conversion price is pegged at 10c. The total price for conversion is 26c, which is still cheaper than buying the mother share at its current price. So, should investors rush to buy the warrants ?. If you have faith that the mother share will hold around this price or will not drop below your conversion price by the time you exercise your shares, then it could be worth a bet. Do take caution and consideration that the exercise period (the time you submit until the time your share is listed) might take weeks to complete. Please check with your financial adviser/share registrar for advice on warrant exercise procedures.
Will INGENS will be another HARVEST or NICORP (with 1000+% gain) ?. What is the main reason for this run ?. Is there a solid growth story for the business towards the longer term?. Will the share price be able to sustain or move higher from this level ?.
If I can still recall, the rally started from a rumour that our Prime Minister's son is taking a 10% stake in the company. Of course this is not a substanciated fact but it does help to push up the share to a certain extent.
Looking at the latest financials, the Group posted an impressive 1st quarter revenue of RM129.85 million, representing an improvement of RM127.02 million to the corresponding period in the preceeding year. The increase is mainly attributed to new ICT distribution business (Vistavision Resources Sdn Bhd) that the company acquired recently.With this increase in revenue, the Group registered a pre-tax profit of RM3.7 million as compared to a net loss of RM0.36 million in the previous quarter. The ICT distibution business accounts for RM1.83 million of the profit and the balance from Enterprise Systems. The Group should be looking forward to a more sustainable revenue model in the Group's ICT distribution business which would boost up the bottom line favorably.
The Group also set an internal target to achieved a sales turnover of RM800 million with a profit of RM12.5 million for the new financial year ending 31st March 2013 and the management team believes (no certainty and not reviewed by external auditors) that it can be achieved based on the 1 quarter's result assumption.
Is it game over yet for INGENS ? Some says "YES" and some says "The game had JUST STARTED". Everyone's trading style and apetite for risk and rewards is different. That's what keeps the market alive and interesting. As for my views, i'm not recommending investing long term in this kind of stocks as it can be very speculative and risky. The odds for picking the long term winners aren't great. I like to view them as a trading vehicle with lots of volatility and lots of upside when the trade is timed right and if timed wrongly, you could be losing a chunk of your savings.
With such amazing % gains in penny stocks, you don’t even have to catch the entire move at the lowest price to make outsized returns when trading.
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