Wednesday 30 July 2014

Kumpulan Europlus Bhd (KEURO) - rights shares and free warrants key info, theoretical ex-all price

3 Rights shares for every 4 existing KEURO shares held, and 1 free warrant for every 2 rights shares subscribed

Issue price per rights share: RM1.08

Warrant exercise price: RM1.18

Ex-date: 1 Aug 14

Trading of OR: 6 Aug 14 (Wed) 9.00am to 12 Aug 14 (Tue) 5.00pm

Acceptance and payment for subscription of rights shares: by 20 Aug 14 (Wed) 5.00pm

Listing of right shares: 3 Sep 14 (Wed)

Share price
(31 Jul 14)
Theoretical Ex-all price
(RM) (RM)
1.25 1.17
1.26 1.18
1.27 1.18
1.28 1.19
1.29 1.19
1.30 1.20
1.31 1.20
1.32 1.21
1.33 1.21
1.34 1.22
1.35 1.22

Saturday 26 July 2014

SUPER CHEAP deal - Regional ePapers for less than 33sen a day!

Besides The Star, the deal comes with access to regional e-papers which include:

China Daily Asia Weekly
Jakarta Post
The Nation (Thailand)
Philippines Daily Inquirer

1 month for RM10 instead of RM40
6 months for RM60 instead of RM210 (only RM10 per month)
12 months for RM120 instead of RM350 (only RM10 per month)

What an incredible deal! Available at Groupon

Wednesday 16 July 2014

The MRT Tunnel and Depth of Ownership

The principle of co-existence in land ownership was first adopted in Malaysia in MRT project.

For full article, see the last page of the newsletter.

Flash Sales Business

What is the flash sales business?
Flash sales are a type of e-commerce transaction that involves the sale of products and services via a website for a temporary period at prices which are generally discounted to the usual selling price.

Eg. Groupon, LivingSocial,, etc

How Does flash sales business model work?
For products, the business the e-commerce unit will acquire will typically agree with a supplier to sell excess, remnant, obsolete or out of season products through the websites.

The business will then sell the product, often through a flash sale, and the buyer will pay for the product.

Once the sale has completed, the e-commerce unit will aggregate all purchases made by the product buyers, place an order with the product supplier for the volume of products that have been sold and pay for the products using the proceeds received from buyers. The businesses to be acquired by the e-commerce unit typically do not purchase products from suppliers unless they have been pre-sold and therefore do not generally take any inventory risk.

The product supplier will generally then ship the order directly to the e-commerce unit. The e-commerce unit will then sort the order, re-package it, and ship the item to the individual buyers.

The e-commerce unit will receive the margin between the agreed supplier price and the price it can realise selling the product on its websites. The e-commerce unit will generally be under no obligation to acquire the product from the supplier in the event that it is not sold on its website.The e-commerce unit will generally be responsible for bearing the cost and liability of product returns.

For services, the e-commerce unit will typically agree with a service provider to sell a service through a website. It will then sell the service, often through a website, and will remit the agreed portion of the sale value to the service provider once the service has been provided or redeemed by the buyer. In the event that a service is sold and not utilised prior to the expiry of its utilisation period, the e-commerce unit may be entitled to retain the total value of the sale.

The advantages of the flash sales business model
Reduced inventory risk
The e-commerce unit will only generally order products once payment has been received from buyers. Product suppliers will generally agree to reserve a certain volume of products and put them on hold for the duration of the sale period so that the e-commerce unit is able to meet the buyers' orders.

Reduced warehousing costs
The e-commerce unit will not be required to hold large volumes of inventory in warehouses, significantly reducing the fixed costs associated with holding inventory.

Reduced property costs
The e-commerce unit will not typically require 'bricks and mortar' shop fronts to generate sales, eliminating a significant cost of 'traditional' retail businesses.

Efficiency and speed
The short duration of flash sales, combined with the significant buyer database of the businesses that the e-commerce unit will acquire, is expected to enable the company to clear large volumes of products quickly and efficiently. This will typically result in a quicker inventory to cash conversion for the product supplier than traditional off-price retail shopfronts, which increases the appeal of online flash sales to product suppliers.

The Virtuous Cycle
The e-commerce unit key business strategies are designed to create a 'virtuous cycle' - an increased number of buyers, who transact more frequently and spend more money per transaction, generates a greater sales volume which leads to access to better products at more favourable prices. This in turn should lead to a further increase in the number and value of buyers, which is expected to drive the growth of the businesses the e-commerce unit will acquire as the 'virtuous cycle' continues.

1. Failure of website, system and content integrity
2. Decline in retail and e-commerce sectors
3. Decline in growth rate of internet penetration
4. Relationship with suppliers
5. Increased competition
6. Inadvertent sale of counterfeit goods that may have a material adverse effect on its business reputation and brand name

Source: iBuy IPO prospectus

Wednesday 2 July 2014

KSENG beneficiary of Pengerang story?

At current price of RM6.78, KSENG's market cap is RM2.45b. Deducting cash and investment securities of RM969.9m and RM426.9m respectively, and with negligible debt, the market values KSENG at RM1.05b for its manufacturing, hotel and resorts, property, plantation businesses and assets such as investment properties and land bank.

If you believe in Pengerang's growth story, I think it is worth while looking deeper into the stock. Currently I believe the stock is already traded at some discount to its NAV. If Pengerang develops as planned, I think huge potential in its close to 9000 acres of land located between Pasir Gudang and Pengerang.

Its landbanks are located near the Senai-Desaru which may provide good accessibility to the highway. Well connected to Pasir Gudang as well.

Another big catalyst could be the proposed 3rd link between Johor and Singapore, if it is links Pengerang and Pasir Ris, as part of the proposed East Coast-Singapore expressway. Then we are likely to see the surge in land price in South-Western Johor repeating at Pengerang, Pasir Gudang and Ulu Tiram area.

 I couldn't resist but accumulating the stock at this level. I believe patience in this stock will be well-rewarded