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One thing bad about this counter is the latest term loan of RM89,000,000 to finance the acquisition, gearing ratio up 200% from 0.25 > 0.75, repayment term is 5 years, so coming few years will slow a bit, long term is good share especially 5 years later.
89mil debt divide by 5 years is just 17.8mil per year. Take note that the new acquisitions can help hextar to secure 13mil/year for 3 years. Also, 13mil/year is just the minimum profit.
You forgot about interest rate, assume 6 percent per annum it would be around 19million per year, let’s say we add up 50% more for 13million minimum profit = 19.5millions, for coming 4 - 6 quarters I won’t expect any profit from the new acquisition
19.5millions is 50% more for minimum profit, what if coming few quarters stay at minimum 13millions only? Then they are making loss for the new acquisition, that’s why I’m worrying for my dividends
Recently, average profit for every quarters are around 10millions (without new acquisition), now they have to spend more for the loan repayments if the income from new acquisition not able to contra the loan repayments.
profit = revenue - expense, interest is expenses, but not capex or principal repayment. of course you can expect more depreciation and amortization but its amount is depending on what is the estimates
Read QR la…I holding this counter so many years, you think I duno how company running meh? Long term is good, but now I worry my dividend mah, I hold more than you all ok
I bought since 2017 and average is around 75sen, now can say is company highest peak already even today price is not bad actually, I’m thinking to sell half of my holdings today because my return is already more than 100% plus dividend taken past few quarters, so I sell half today is already take back my capital. This is what other major shareholders doing also, because after bonus issue got more shares so no point to take risk.
Do simple calculations, today price RM1.65 after bonus issue will be around RM0.99 with market capitalisation 1.3billions. If those expecting RM0.99 can go back to RM1.5, means company will increase by 650million market capitalisation (2billion market cap), but new acquisition is only worth around 100million
Yes, buy shares must use business mindset, do the math and make your money worth, hedge against inflation (dividends) and future prospects must able to push share price up (capital gain), if a company doesn’t have these 2 simple criterias, then just skip, otherwise it’s just speculating already.
Might be there will no bonus issues rally due to this...price already at overbought area...and already up almost 200% from base price...after bonus issue will gonna have hard time to up again...looking at today closing price looks like selling pressure is high...
Good luck to everyone of you, I sold my capital today, only left the profit to let it roll for 10-20years. So I will be rarely coming back here to comment.
