PETALING JAYA: In an updated prospectus draft, Oldtown Bhd is pricing its issue/offer price at RM1.25 per share for its initial public offering (IPO) of 96.4 million shares of RM1 each, instead of offering 59.5 million shares as stated in its first draft posted in February.
The company, which owns and operates the Oldtown White Coffee chain, aims to list on Bursa Malaysia's Main Market on July 11.
According to its prospectus draft, the company is offering 63.4 million new ordinary shares for application by the Malaysian public, directors, eligible employees and business associates of Oldtown and its subsidiaries.
The new shares are also offered to identified investors and bumiputra institutions and investors approved by the International Trade and Industry Ministry. It has an offer for sale of 33 million ordinary shares by way of private placement to identified investors.
The IPO price is based on the historical price earnings ratio multiple for the financial year ended Dec 31, 2010 (FY10) of 13 times which is based on the historical net earnings per share of 9.6 sen and enlarged issued and paid-up share capital of 330 million shares upon listing.
AmInvestment Bank Bhd is its IPO principal adviser, managing underwriter, joint underwriter and joint placement agent. Meanwhile, CIMB Investment Bank Bhd is its joint underwriter and joint placement agent.
Oldtown said the listing exercise would enable the group to gain recognition and enhance its profile through listing status and further augment Oldtown's corporate reputation and assist the group in expanding its customer base locally and overseas.
“It will also provide funds for expansion of Oldtown's business and markets, as such increasing the overall capability of the Oldtown group,” it added.
According to its proforma consolidated statements, Oldtown registered a net profit of RM31.9mil with revenue of RM255.1mil for the financial year ended Dec 31, 2010.
The company plans to raise RM79.2mil gross proceed from its IPO, of which it will utilise RM38.1mil for capital expenditure, RM10.5mil for working capital and RM5.9mil for repayment of bank borrowings.
The company's market capitalisation upon listing amounts to RM412.5mil, based on the IPO price and the enlarged issued and paid-up share capital of 330 million shares
Tuesday, 21 June 2011
HaiO: Time still Tough
Once a darling stock for both institutional and retail investors for its attractive dividends, HaiO has since dramatically fallen out of favour. After reaching a high of above RM10 for its share price in early 2010, HaiO gave away 5:1 bonus issue and implement 2:1 share split to about RM4.3. However after this, the share price headed south, coincided with a series of poor financial results beginning from 2010Q4 (quarter end July 2010).
The poor financial performance is mainly caused by the network marketing arm, though I'm not sure what is actually the problems.
HaiO quarterly results:
| Rev (Profit) RM mil | Q1 | Q2 | Q3 | Q4 | FY |
| 2010 | 148 (18) | 132 (20) | 131 (18) | 99 (14) | 511 (71) |
| 2011 | 55 (8) | 53 (6) | 58 (6) |
For the whole FY2011, the revenue and net profits are significantly lower than previous year. So when the quarterly results were announced in the media, it sounds like this: HaiO's Revenue & Net Profit drop 60-70% QoQ. So the consequences... please refer chart below.
HaiO: a big mountain
Each time when HaiO announced the bad results, the share price will take a significant dive the day after, as shown in blue arrows. The price plunged from RM4.7 to RM2.15, down more than 50% like its financial performance in 15 months.
HaiO is going to announce its 2011Q4 results soon this month. What we are likely to see is: HaiO revenue & net profit slide 60% in FY2011 YoY. How will investors respond? Three months ago, the response was not that bad compared to previous ones, perhaps they are well-prepared for it.
Three months later in September when the 2012Q1 result is out, we are likely to see headlines like: HaiO net profit increases xx% QoQ. So will the share price bottom out after this?
Saturday, 18 June 2011
Stock Watch: Random Pick
MBSB at its support of RM1.40, refuses to go further down beyond this level for the 2nd time. RSI oversold. Can it rebound from here?
MBSB: Can it restart its uptrend, or is it an unfavourable double top here?
Glomac is going to annouce its 2011Q4 result next week, and it is expected to be an impressive one. The company has been actively buying back its share lately and should annouce a final dividend as well.
Glomac: Uptrend may not finish yet
E&O is one of the most heavily traded property stock recently. News about potential new investors is lingering. Its share price briefly breached through previous high of RM1.61 but fell back immediately to RM1.53. If it is able to crawl back towards RM1.60 next week, then I think it has a chance to go higher.
E&O: can it form a cup with handle?
Friday, 17 June 2011
Can MAS take off on time?
MAS posted a net loss of RM242 in Q12011. High fuel price is largely blamed for the loss as its fuel expense increases RM321mil QoQ.
Since the appointment of new MD/CEO in 2009, MAS is determined to be the number one airline in Asia by 2015. It has a 5-year fleet renewal plan and aim to have the youngest fleet in the region by 2015. Younger fleet is good because it is more comfortable for passengers, more fuel-efficient and cost less in maintenance. To achieve this, MAS needs to buy a lot of new planes - about 50 planes ordered. Debts will surely increase and it needs a sustained profit to cover. It can't afford to make loss after loss. Can MAS do this?
Recent 2011Q1 result:
| (in RM mil) | 2011Q1 | 2010Q1 |
| Total Revenue | 3195 | 3302 |
| Operation Revenue | 3142 | 2909 |
| Net Profit | -242 | 311 |
| Fuel expenses | 1331 | 1010 |
| Cash | 1708 | 2540 |
| Total borrowings | 4151 | 3709 |
| Short term borrowing | 577 | 293 |
Total revenue falls but revenue from operation increases. Cash reduces and debt increases.
MAS financial result 2006-2010
| 2010 | 2009 | 2008 | 2007 | 2006 | |
| Revenue (mil) | 13588 | 11605 | 15570 | 15233 | 13407 |
| Net Profit (mil) | 237 | 523 | 272 | 853 | -134 |
| Load factor (%) | 75.4 | 69.4 | 67.6 | 65.8 | 66.8 |
In 2009, MAS suffered an operational loss of RM600+mil. The reason it can still post a net profit of RM523mil in 2009 was due to the incredible fuel hedging gain of RM1.16bil!
In 2010, MAS received an one-off compensation of RM329mil from Airbus for plane delivery delay. If not due to this, MAS will also suffer net loss of RM92mil in 2010.
Thus, I regard 2009 & 2010 as loss-making years.
Latest 2011Q1 also registered loss. Now in 2011Q2, though the fuel price drops to slightly below UDS100, it is still above MAS's fuel hedging of USD88 in 2011 and 75% of fuel will be bought at market price. From its 2011Q1 presentation, MAS expects tough operating condition to continue in Q2, mainly due to: softening of demand, Japan impact, volatile fuel price, strengtening of MYR and traditionally weak Q2. When the CEO told the public that Q2 is "challenging", it usually means they will have a hard time. So, will 2011Q2 be another loss-making quarter? Will the ambitious re-fleeting project turn out to be a success or a burden?
Nevertheless, MAS recent tie up with Qantas and oneworld should be viewed as positive.
Aviation industry is extremely competitive and high risk. Global political unrest, volatile fuel price, natural disaster, terrorist attack, disease outbreak etc all have a significant impact on it, and on MAS share price as well. However, MAS will always get support from the government.
MAS: supported at RM1.35
MAS vs Airasia: Which company is better-managed?
| FY2010 | (RM mil) | 2011Q1 | (RM mil) | Market | |
| Revenue | Net Profit | Revenue | Net Profit | Cap | |
| Airasia | 3993 | 1067 | 1048 | 172 | 8.58 bil |
| MAS | 13588 | 234 | 3194 | -242 | 4.85 bil |
New Airbus A330-300
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