ASIA MEDIA - Reaching The Bottom?

Asia Media (AMEDIA) currently is 1 of the most active counter in the stock market. It start moved up sharply from 30 cent range in June this year and reach its peak of RM1.15 at the end of September. Right after the announcement of proposed bonus issue & free warrant, the stock price starting to drop dramatically from RM0.90 to around RM0.35, lose about 70% of market cap from its peak.

While I believe the shrink of the stock price is mainly because of the speculative activities, there are some fundamentals in the company actually. AMEDIA, a out-of-home transit TV company, mainly offering broadcasting services & facilities on public transport. Currently its presence covers buses in Klang Valley as well as Johor Bahru.

Look back on the past few quarter result, we can find that the revenue & profit of AMEDIA is actually improving significantly. The current PE of AMEDIA stands at around 5.5 times. I believe their revenue & profit will continue growing in the next few quarters, following the launch of Digital Terrestrial Television Broadcasting (DTTB) services & their intention of expanding their business in other states, i.e. P. Pinang.

Anyway, I think the current price of AMEDIA will still remain volatile due to speculative activities. Since AMEDIA is still a startup company & it doesn't pay even single sen of dividend, I believe this is quite reasonable to enter AMEDIA if the price hits below 5 times of PE.



Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.

GW PLASTICS - Opportunity To Grab Some Profit?

Recently Scientex announced acquisition of 2 subsidiaries of GW Plastics for total consideration of RM 283 million. Upon the completion of the acquisition, GW Plastics will pay out distribution from the proceed of sales of RM 1.19 per share and delist from the stock market.

Well, we can see the current price of GW Plastics is ranging around RM1.08-1.10, it provides some opportunities to lock off some profit. Let say if you buy GW Plastics at RM1.09, you will get back RM1.19 per share, which is RM0.10 or 9% (exclude brokerage fee & other charges) return, at the end of the acquisition. I believe the acquisition will be completed in 3 - 5 months, it means that you may get the 9% profit in 5 months time.

Anyway, this is not a riskless investment. The disposal is conditional upon the approval from relevant authorities and shareholders of GW Plastics. The disposal may be burst if those authorities & shareholders do not approve on the about mentioned disposal, however, I think the chance of not getting approval is relatively low since the price of RM1.20 or historical PE of 12.7 times seems quite reasonable & the share price of GW Plastics was trading below RM0.75 most of the time.



Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.

Plantation Sector - The Nightmare Is Not End Yet

Currently most of the plantation companies' stock prices slump critically. The main business of these plantation companies, is mostly on palm oil operation. The weak stock prices' movement is believed to be caused by the bad performance of palm oil price recently.

Palm oil, the world's most used cooking oil, has been dropping dramatically from the peak of RM3,620 per metric tonne in the early April 2012 to RM2,255 as of today closing price*, which is around 37% drop in half year time. Dorab Mistry, who has traded palm oil for more than 30 years, has lower his forecast of CPO price to RM2,600-2,700 by year end. Most investors are pessimistic on CPO's future as CPO is haunted by numbers negative factors currently.

The recent critical drop of CPO is mainly caused by higher supply of palm oil while the demand on palm oil is slower. The increase of inventory of CPO in Malaysia & Indonesia, the 2 largest palm oil producer in the world, amid weak global demand & faster growth of production in these 2 countries. Meanwhile, the better harvest of soy bean in South America increases the supply of soybean oil causes the slump of soybean oil price as well.

Anyway, currently palm oil is trading at discount of USD373.46 per tonne to soybean oil, the largest discount since October 2008. I think the CPO price is trading at very low price currently. The price may still go down & the trading would be extremely volatile in near term. Though I believe the CPO price may rebound back to RM2,600-2,700 as predicted by Dorab Mistry, I don't see any outstanding result will be announced by plantation companies for the 2nd half of 2012.

*Palm oil price here refers to CPO 3-month forward futures price



Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.