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JAG just announced 30% private placement. People sometimes react negatively to such corporate exercise bcos it dilutes shareholdings. But we need to understand the rationale behind. Inside the long announcement, they mentioned the money raised will be used for expanding capacity and working capital (e.g. handle more copper inventory). After the placement, capacity will TRIPLE from 2 metric ton/day to 6 metric ton/day! 1 month+ ago the company just bought a piece of land for greater storage capacity to collect larger amount of e-waste. Looks like the company is very confident on the future outlook due to a double boost from skyrocketing demand for electronics (5G, EVs etc.) and copper (needed for renewable energy like solar panels). The company already reported 2 consecutive quarters of record profit. Even if they just continue to make RM5.4m like last quarter, multiply with 4 quarters = RM21.6m, which means now PE only 10x! ????
Sharingan,
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DISCLAIMER: The note above is purely facts sharing for educational and discussion purposes. We do not recommend BUY/SELL actions. We're also invested in the stock(s).
DC TY, agree. Looking at their balance sheet and operating cashflow, they can easily borrow from banks (unless the banks know something and don’t want to lend money to them). Doing pp is bad for new retail shareholders, it mainly only benefits the major shareholders because their cost is very low.
The good thing is the share price should run up quite a bit before they set the price for the pp. Trade cautiously guys.
