MAMEE propose capital reduction and repayment

MAMEE share suspended for two trading days from 7th April 2011 pending for an announcement. Company gonna propose capital reduction and repayment....i call it "Privatization".

Company undertaking a selective capital repayment exercise under Section 64 to all shareholder, other than  Non-Entitled Shareholders.

The propose capital reduction and repayment will be funded by this 71.9% Non-Entitled Shareholder by way of an advance or/and borrowing.

Proposed cash repayment per share is RM4.39, arrive after consider 5days, 1month, 3months average price of MAMEE share. Based on MAMEE NTA of RM1.71, its propose price-to-book ratio is 2.57times.

The reason given by the board for this proposal is :
1. Concern about the trend of increasing raw material prices and forex volatility.
2. Substantial capital expenditure may needed to improve productivity and expand capacity.
3. Need higher borrowing, which will affect dividend payment capability in immediate term.
4. MAMEE share thinly traded.
    "lol, blame people don't stir up(goreng) the price "

All after all, MAMEE is a very highly rated company in my list. It doesn't disappointed me since i start researching them. Link.

I personally do not welcome this proposal, as we'll get kick out from a good partnership. However, MAMEE proposed cash repayment price RM4.39 is about 22% premium of closing price as of 6th April 2011(RM3.60). For the good faith of minority shareholder(28.1%) i think Non-Entitled Shareholder are generous and fair.

Read more...

UCHITEC share price soar

Technical Outlook
Uchitec share price jump RM0.07 to RM1.43 during as of posting. Two weeks ago(28/2/11) i start to keep a close eye on this stock as it break above symmetrical triangle at RM1.32. Straight away, I revise the target price to RM1.38 then RM1.44.

However, share price stay put since then i suspect because of the uncertainty in Japan Earthquake and Libya.

If share price successfully break above resistance RM1.44, uptrend should pretty firm. Next target will be RM1.54.

Read more...

KPJ revenue recorded another year high

FY31/12/10
Financial Result
Quarter-to quarter comparison, company revenue up 12.5% to RM433.43m from RM385.34m 4Q09. However, net profit had drop RM6.5m to RM30.81m. 4Q09 net profit was RM37.36m. I cannot find any explanation from the report, i guess is something to do with some sort of adjustment on minority interest.

Year-to-year comparison sees revenue recorded another high of RM1656.2m. Revenue on last preceding year was RM1456.35m. PBT also increase 16% to RM168.13m vs RM144.92m for FY09. As say in the report, the increase in PBT is in line with the revenue and contribution from the hospitals.

Technical Outlook
KPJ share price was on uptrend from July 09, until Dec 10. A period of 14 months. Since then, it hovering around RM3.80, ups and down between MA(50d), but well above MA(100d).

From my point of view, warrant issue during Jan 10 much or less effect the share price, as profit will be diluted when they are exercise.

Stock Valuation
Base on annual EPS RM0.212, KPJ is trading at PE18x. I think it about right for the price we pay for this share(RM3.82 as at 15/3/11).

Future Prospect
From financial report, board of directors are optimistic about KPJ's performance in FY11, in tandem with increasing hospital capacity and activities.

Acquire 100% in Sibu Medical Centre Corporation for RM26.9m, and 100% in Sibu Geriatric Health & Nursing Centre Corporation for RM1.24m. The acquisition is expected to be complete by 1H11.

Into condition Subscription Deed for acquisition of up to 51% equity interest in Jeta Garden Waterfront Trust(JGWT) and up to 3,308,415 10-year convertible notes for total cash consideration up to  RM19m. JGWT is primarily involved in operating a retirement village in Queensland, Australia. Go here or here

Overall
KPJ is a fundamentally strong company. Company's revenue has been growing for the past 6 years(i only have data for this long). Inline with revenue growth, Shareholder's Equity has nearly double (0.86 times) since FY05. ROE averaging 13%(6 yrs) also prove that company always manage to generate profit for the shareholders.
In short term, share price may be drifting side way as more warrants to be exercise, diluted EPS. Both acquisition to be completed during FY11 shall generate more income to the company, push up the bottom line.
Long term prospect remain good.

Read more...