SCIB: Bonus Towards Billion Market Cap

 

A day after I wrote that SCIB does not have the ability to do bonus issue, the company proposed bonus issue and free warrants.

I thought bonus issue can only be done by capitalization of retained earning of a company, but now it seems like it can still be done without it.

SCIB has no retained earning with only accumulated losses before this. Now it has proposed bonus issue of 3 bonus shares for 1 existing share, with 1 free warrants for every 2 shares held after the bonus issue.

So that means if you have 1 SCIB share now, after the exercise you will have 4 SCIB shares and 2 SCIB warrants.

Its outstanding shares will go up from 122.6mil to 490.5mil shares, and there will be about 245mil warrants which have a tenure of 3 years.

SCIB: SERBADK 2.0?

About the same time when acquiring KPower shares, Datuk Abdul Karim of Serba Dinamik emerged as a controlling shareholder of Sarawak Consolidated Industries Berhad (SCIB).

SCIB's share price responded by surging from around 60sen in May19 to RM3.50 in Feb20. Covid-19 bear market dragged it down to RM1 and currently it recovers to RM3 level.

Before the change in major shareholders, SCIB was a struggling loss-making company.

Similar to KPower, I didn't have interest in this kind of loss-making company when the visibility of earning is in doubt.

However, studying KPower in late May20 inevitably brought me to SCIB, and I found that SCIB is an even more exciting company.

Am I A True Value Investor?

The answer is NO. 

Why I say so? Just look at my past completed trades since 2013 in "History" page, will any true value investors invest in companies like Geshen, HHGroup, Jadi, Asiapac, Daya, Complete, Notion & Adventa?

I read and heard from other teachers that in fundamental investment, one should invest in well-established, industry leading type of companies with competitive edge or margin of safety.

In my previous investment portfolio, you won't see any big cap companies and blue chips.

Value investors usually won't invest in loss-making companies with no presentable track records but I still put my money in them.

Super Superb Supermax

For 4 full calendar years from 1st Jan 2016 to 31st Dec 2019, Supermax's TOTAL net profit attributable to shareholders (PATAMI) was RM382mil.

Now, in a single quarter of FY20Q4, it achieves a PATAMI of RM399.6mil which is even higher than previous 4 calendar years combined.

In other words, this 3-months result exceeds previous 48-months results. This is simply mind-boggling and I've never seen anything like that.