Showing posts with label AirAsia. Show all posts
Showing posts with label AirAsia. Show all posts
Wednesday, August 17, 2011
Tuesday, May 17, 2011
Commentary On Selected Stocks
Hap Seng - The euphoria died a slow and painful death. Unfortunately normal investors only got wind of the poor placement when its all a bit late. After hitting a high of RM7.36, the promoters were all geared up to place out 124.5m shares, hopefully at RM6.10-6.20. To do that they probably had to make sure the mother share stayed above RM6.50. But there were apparently almost zilch takers above RM6.00 for the new shares.
Again, painfully, normal investors do not get wind of this information till its too late. The company could abandon the exercise or still push through, but the new shares will have to be priced a lot lower than RM6.00. Finally done at RM5.25 and even then only 43.8m out of 124.5m proposed amount.
Is there light at the end of all this? Well, yes, in that the indication was to have been 62m shares but only 43.8m was placed out in the end, an indication that the company was not willing to issue too many shares at the eventual pricing. There is a second phase whereby following the exercise, the company can prove to those who did not subscribe at higher levels that they missed a great opportunity.
In hindsight, the whole strategic exercise was very good, but the promoters were too greedy, I mean the shares were whacked all the way from below RM4.00 to RM7.36 - many institutional investors would immediately turn wary of such a jump prior to an exercise which they were being asked to pony up for new shares, when they could have bought new shares at RM4.00 or below if the promoters HAD NOT collected shares like nobody's business prior to that. Too greedy and not leaving enough on the table for others to make.
So how? It would take some time to work through the exercise, new shares floating, bonus issues and all. I guess if you have no positions, HapSeng at current levels of below RM5.30 is OK but be prepared to go through the exercise. If you have Hap seng at higher levels, I don't think its necessary to average, just go through the exercise and hopefully you should at least make back the difference on an ex-basis.
Mclean -The worst IPO in recent times, any reason, maybe because its Kenanga led? Either the promoters / owners were really naive or really smart. Its not a terribly high paid up, plus the shares DID NOT even went for any kind of goreng activity, there was like no one "taking care" of the counter. Judging from the stupid volume, everybody who got the private and public placements sold. There was no support from anyone.
Why I said naive ... the whole setup, if properly managed would have seen sustained demand and the shares could have held up well above 70 sen. Why I said they could be really smart ... they could be really smart if they anticipated sufficient buying for the first two days which would allow all shares to be out, by last Monday which was T+4, that should flush almost all traders and punters.
If they were really smart, they could keep buying all the way down from 50 sen to 41 sen but not in big lots as to push the share price up. You cannot sell all 100% of the shares (moratorium), the paid up is really pretty small and the free flot is not big at all.
Malaysian Public 2,700,000 (1)
Private Placement 8,600,000 (2)
Business Associates 4,100,000 (3)
Private Placement 11,050,000 (4)
We are talking of a free float of just below 26.5m shares swishing around. At 41 sen, thats not even RM11m in value. Which for me, is a ripe scenario for me to favour the "some very smart but severe buggers" working this counter. If you did not already lose money on this counter, for a pure trading play, I would favour a bullish bet by going long now.
The key is looking at the very assiduous accumulation in Maclean-W over the past 3 days. The mother was "allowed" to do a free fall but the warrant was well bought at every level. Its so easy to send this back to 60 sen with minimal effort. Judging from the fact that there is little baggage (old debts, stale bulls, etc.) and knowing the free float equation and assuming the business is not flawed (shouldn't be because it takes so many hurdles and due diligence and audits from the authorities to get to IPO stage) ... it may not be an exciting business but to assume that its a fake thing should be the last thing on our minds.
AirAsia - for those who do not already know. Super investor Koon Yew Yin, who has hit another home run in Coastal Contracts, has already accumulated a sizable stake in Air Asia. Take that information whatever way you want. Just FYI.
NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). I may have a position in the counter already. The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
Again, painfully, normal investors do not get wind of this information till its too late. The company could abandon the exercise or still push through, but the new shares will have to be priced a lot lower than RM6.00. Finally done at RM5.25 and even then only 43.8m out of 124.5m proposed amount.
Is there light at the end of all this? Well, yes, in that the indication was to have been 62m shares but only 43.8m was placed out in the end, an indication that the company was not willing to issue too many shares at the eventual pricing. There is a second phase whereby following the exercise, the company can prove to those who did not subscribe at higher levels that they missed a great opportunity.
In hindsight, the whole strategic exercise was very good, but the promoters were too greedy, I mean the shares were whacked all the way from below RM4.00 to RM7.36 - many institutional investors would immediately turn wary of such a jump prior to an exercise which they were being asked to pony up for new shares, when they could have bought new shares at RM4.00 or below if the promoters HAD NOT collected shares like nobody's business prior to that. Too greedy and not leaving enough on the table for others to make.
So how? It would take some time to work through the exercise, new shares floating, bonus issues and all. I guess if you have no positions, HapSeng at current levels of below RM5.30 is OK but be prepared to go through the exercise. If you have Hap seng at higher levels, I don't think its necessary to average, just go through the exercise and hopefully you should at least make back the difference on an ex-basis.
Mclean -The worst IPO in recent times, any reason, maybe because its Kenanga led? Either the promoters / owners were really naive or really smart. Its not a terribly high paid up, plus the shares DID NOT even went for any kind of goreng activity, there was like no one "taking care" of the counter. Judging from the stupid volume, everybody who got the private and public placements sold. There was no support from anyone.
Why I said naive ... the whole setup, if properly managed would have seen sustained demand and the shares could have held up well above 70 sen. Why I said they could be really smart ... they could be really smart if they anticipated sufficient buying for the first two days which would allow all shares to be out, by last Monday which was T+4, that should flush almost all traders and punters.
If they were really smart, they could keep buying all the way down from 50 sen to 41 sen but not in big lots as to push the share price up. You cannot sell all 100% of the shares (moratorium), the paid up is really pretty small and the free flot is not big at all.
Malaysian Public 2,700,000 (1)
Private Placement 8,600,000 (2)
Business Associates 4,100,000 (3)
Private Placement 11,050,000 (4)
We are talking of a free float of just below 26.5m shares swishing around. At 41 sen, thats not even RM11m in value. Which for me, is a ripe scenario for me to favour the "some very smart but severe buggers" working this counter. If you did not already lose money on this counter, for a pure trading play, I would favour a bullish bet by going long now.
The key is looking at the very assiduous accumulation in Maclean-W over the past 3 days. The mother was "allowed" to do a free fall but the warrant was well bought at every level. Its so easy to send this back to 60 sen with minimal effort. Judging from the fact that there is little baggage (old debts, stale bulls, etc.) and knowing the free float equation and assuming the business is not flawed (shouldn't be because it takes so many hurdles and due diligence and audits from the authorities to get to IPO stage) ... it may not be an exciting business but to assume that its a fake thing should be the last thing on our minds.
AirAsia - for those who do not already know. Super investor Koon Yew Yin, who has hit another home run in Coastal Contracts, has already accumulated a sizable stake in Air Asia. Take that information whatever way you want. Just FYI.
NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). I may have a position in the counter already. The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
Monday, November 29, 2010
Commentary On Hot Stocks
Its been a tough week for the markets. You know people are disturbed when I have readers emailing me to ask me to stop with the sea creatures mastheads, and switch back to louts flower as they made a lot of money when the lotus flower appears as masthead.
Realistically, nothing much has changed an markets uptrend is intact but in a moving market it will always be susceptible to minor negative news as those will always be reason enough for people to take chips off the table. I do think its a good time to reload your guns, both for traders and fundamental longer term players as the markets whipsaw action brought quite a number of opportunities.
Some of the stocks to take a look:
Air Asia - I have not been keen on it for the longest time. However the recent 3Q 2010 PBT was a shocker on the upside. Looks like it has surged past critical mass. The second factor which is causing analysts covering the stock to scramble to upgrade Air Asia is the potential of its Indonesia operations - looks to be surpassing the size of Malaysian operations soon if not already. That is testament to a good replication strategy and the ability to transplant its business model successfully in the region. The execution ability will be well regarded as that can only hint of future successes in other regional countries for Air Asia. Now, maybe the plethora of Air Asia covered warrants will finally start to move up. Its currently at a 30% to regional peers, watch funds surge to buy the stock.
EAH - Maybe its because of the missiles thingee but many investors may have missed the fact that it is trading cum-free warrants on Tuesday 30 Nov, which means its the last day to buy and still be entitled to the 1-for 2 free warrants. As the warrants are exercisable at 59 sen, its a no brainer. Company fundamentals are intact for this new kid on the block. Recently visited the company and am confident with their outlook. It does not want to be just another ACE company but with grander plans to move to the next level via smart acquisitions. Pipeline is healthy with a good chance of securing a couple of significant GLC related contracts, which should make current valuations cheap in 3-6 months time.
IJM Land / IJM Land-W - Both suffered the North Korean dengue, but among the recent flurry of property mergers, this looks to have the better upside. Even though it may take 6 months for the merger to be completed, the price is now too skewed to the negative. All things being equal, IJM Land should be at RM3.30 and the warrant should be closer to RM2.05. Let it be known that IJM Land is about the only one which will get an upper hand in these recent mergers, most of the rest are a merger of equals, while IJM Land gets in with something in hand and more.
NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
Realistically, nothing much has changed an markets uptrend is intact but in a moving market it will always be susceptible to minor negative news as those will always be reason enough for people to take chips off the table. I do think its a good time to reload your guns, both for traders and fundamental longer term players as the markets whipsaw action brought quite a number of opportunities.
Some of the stocks to take a look:
Air Asia - I have not been keen on it for the longest time. However the recent 3Q 2010 PBT was a shocker on the upside. Looks like it has surged past critical mass. The second factor which is causing analysts covering the stock to scramble to upgrade Air Asia is the potential of its Indonesia operations - looks to be surpassing the size of Malaysian operations soon if not already. That is testament to a good replication strategy and the ability to transplant its business model successfully in the region. The execution ability will be well regarded as that can only hint of future successes in other regional countries for Air Asia. Now, maybe the plethora of Air Asia covered warrants will finally start to move up. Its currently at a 30% to regional peers, watch funds surge to buy the stock.
EAH - Maybe its because of the missiles thingee but many investors may have missed the fact that it is trading cum-free warrants on Tuesday 30 Nov, which means its the last day to buy and still be entitled to the 1-for 2 free warrants. As the warrants are exercisable at 59 sen, its a no brainer. Company fundamentals are intact for this new kid on the block. Recently visited the company and am confident with their outlook. It does not want to be just another ACE company but with grander plans to move to the next level via smart acquisitions. Pipeline is healthy with a good chance of securing a couple of significant GLC related contracts, which should make current valuations cheap in 3-6 months time.
IJM Land / IJM Land-W - Both suffered the North Korean dengue, but among the recent flurry of property mergers, this looks to have the better upside. Even though it may take 6 months for the merger to be completed, the price is now too skewed to the negative. All things being equal, IJM Land should be at RM3.30 and the warrant should be closer to RM2.05. Let it be known that IJM Land is about the only one which will get an upper hand in these recent mergers, most of the rest are a merger of equals, while IJM Land gets in with something in hand and more.
NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
Monday, April 26, 2010
How Others View AirAsia & MAS
Its wonderful to see how we are perceived, corporate wise. We have such vested interest and then some more. Left on its own, imagine ten vest interests vying for the same pie - we get a detente, a war where nobody really wins because the country loses out on a roadmap to move forward, we loses on getting efficiency, we pay higher prices collectively, we use resources ineffectively, we keep cannabalising among ourselves, we do not allow consolidation and stifle competition, we remove ourselves from being able to compete. Our auto industry is a prime example, and we are stuttering with our airlines - only the spin doctors will tell you its a good thing.
Sydney Morning Herald: Australia is caught up in a battle between economic liberals and protectionists that is delaying the expansion of air services - and the reduction of airfares - between Australia and Malaysia.
The Malaysian government is siding with the protectionists who argue that the government-owned Malaysia Airlines has to be protected from aggressive new price competition from Air Asia X if it is to avoid the fate of Japan's national carrier, Japan Airlines, which has gone broke and is trading under bankruptcy protection.
AirAsia X's budget beds
AirAsia X has become the first low-cost carrier to introduce flatbed seats to its aircraft.
The government is blocking Air Asia X from starting new services from Kuala Lumpur to Sydney and Seoul - two of Malaysia Airlines' most lucrative routes.
By contrast, Air Asia X is about to increase services between Kuala Lumpur and Melbourne to twice daily, charging regularly available fares of A$600-A$800 return and sales fares as little as A$100 one-way.
Air Asia X, which also flies daily from Kuala Lumpur to Perth and the Gold Coast, was mainly responsible for a 25 per cent increase in travel between Australia and Malaysia last year.
"The complexity is that there's no one single position from the Malaysian Government," the CEO of Air Asia X, Azran Osman-Rani, says. "A lot of stakeholders in the government want to see us fly. The tourism ministry is right behind us because they see how we have stimulated tourism with our flights from Melbourne and Perth in 2009 when most markets shrank. The ministry of transport is equally supportive; they submitted the paper recommending that we be granted rights. A lot of ministers who we've met think it will be a plus for the economy.
"We've made many presentations to the prime minister and the economic council [of Malaysia]. We don't have anything in writing but the informal feedback we've received is not positive and I can only surmise that the conflict is related to Malaysia Airlines, which is owned by the Ministry of Finance and the National Sovereign Wealth Fund.''
Osman-Rani says that two new 377-seat Airbus A330 aircraft arriving in June and July that would have operated the Sydney service now have to be allocated to other routes, including new daily flights the carrier is about to start to Delhi and Mumbai in India.
They will also be used to increase the Melbourne frequency to twice daily on all days of the week, Osman-Rani says.
The carrier has also begun swapping its premium economy seats for lie-flat beds with a pitch of 60 inches, which the carrier will be selling for as little as A$1000 return on the Melbourne-Kuala Lumpur route, Osman-Rani says.
However, the carrier is persisting with nine-abreast economy seats of 31 inches, which are just 16.5 inches wide - half an inch less than the standard 737/767 seat or 1½ inches less than the 18-inch-wide economy seat in the A330 in standard eight-abreast configuration.
