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I spent the weekend to analyze the rationale behind the FnB sale. So the fnb brings in approx 10mil net profit/year, so it’s currently sold for 60mil, that’s means it takes 6 years for fnb earn the amount if the earning sustains.
So 30mil is gonna be paid out as dividend. 21mil to buy raw material, and 9 mil to roll the plastic business.
I think it’s really not a bad idea to channel the money that it would otherwise take 6 years for the fnb business to earn to leverage on the low raw material price now, plastic earnings definitely will be >10mil/year.
This would increase their profit margin in future. Their net cash position puts them in really good position to diversify into property industry; which is a better industry to be in compared to fnb.
@Lee Wei Kang if they sold it at higher PE you sure minor shareholders won’t be bickering about management overpaying it? Haha..the fact is this is their business they have the all the right to decide, we’re just riding on their success
As long as they are not siphoning money at the expense of shareholders and doing shady stuff, I think we’re in good hands
Also, the management themselves are
Major shareholders of Foremost Equal, so why would they overpay their fnb segment? That is akin to transferring money from left pocket to right pocket. Redundant move.
@TicTac u are right. left pocket to right pocket only. minor shareholders like us cant do shit. if u dont like, then just sell the shares, thats all we can do
