PUC (0007) - PUC - Full On Green

PUC Founder (MSC) Berhad (PUC 0007) had ventured into the green energy sector since the emergence of new Managing Director, Mr Cheong Chia Chieh. Although Mr Cheong Chia Chieh is brought up from a media background, he is determined to transform PUC into a major player in Malaysia's green energy sector.

With the global initiative to cut down on green house gas, the need for renewable green energy is imminent to help achieve this goal. PUC had big plans to grow into the renewable green energy market beside just building solar farm in the local front. It will be both challenging and exciting for PUC in the coming outlook.

According to the chart, PUC had saw a good consolidation at the region of RM 0.11. The consolidation might suggest that PUC had saw saturation at that level, and will see a test at RM 0.13 when volume kick back in.

A strong penetration above RM 0.13 will result in PUC looking to test the bigger barrier at RM 0.17.

PUC had saw open market interest when the company had changed it's focus to grow in the renewable green energy sector. There is much more room to grow in Malaysia for the renewable green energy market, considering the Malaysian market is still at it's pioneering stage compared to other developed countries.

PUC will likely be seeing more participation in the open market trading with the current approved corporate exercise for ICULS issue.


Rising Green Energy Player

There had been much focus on the need to develop the renewable energy in order to preserve the mother nature. With Malaysia being part of the nation that is committed to the latest COP21 (Conference of Paris), almost 200 nation that is involved had pledge to be committed in bringing down the global temperature that had been rising at an alarming rate if nothing is being done to address the issue. Rising industries output that had been pushing a higher demand on the energy sector had saw the burning of fossil fuel being one of the major operation that is contributing to the rising of green house gas.

Previously, Malaysia vow to reduce it's greenhouse gas emission during the COP 15 by 40% based on 2005 output.

The latest INDC (Intended Nationally Determined Contribution) paper from the UN had indicated that Malaysia is planning to reduce green house gas emission by 45% by 2030. This consist of 35% on an unconditional basis and a further 10% is condition upon receipt of climate finance, technology transfer and capacity building from developed countries.

All this global and local commitment from the government will ensure green energy continue to be one of the heavily investor sector moving forward. As of current, Malaysia established renewable energy player is Cypark and Amprop solar farm.

PUC, under the lead of Mr Cheong, is determined to emerge as one of the leading renewable energy player in the Malaysia market, and will further look into tapping oversea potential through collaboration and joint ventures.

PUC will be going all out for the renewable energy sector. Aside from the solar energy, PUC is also looking at other renewable energy opportunities such as biomass, hydro and wind.

Familiar sources had also pointed out that PUC might be going to develop an island that is powered by renewable energy. While this is not a new thing in the world, however, it will be the first in Malaysia should PUC is able to do this, signalling another breakthrough in renewable energy sector in Malaysia.

A renewable energy powered island will gather energy from solar, hydro and wind.

The initial investment into renewable energy is not small as it required heavy outlay of capex for the infrastructure. For example, a 1MW solar farm will be easily looking at RM 7 to 8.5 million to build. Should PUC is heading all out for the renewable energy sector, market analyst familiar with this will probably see PUC turning in it's non core asset and operation into cash to be reinvested into the renewable energy sector. Currently, PUC is still involved in Media Advertising as well as Financial Services Consultation though it's subsidiaries.


Attractive Going Corporate Exercise

PUC is undergoing a corporate exercise that will see shareholder eligible to subscribe a right for 28 ICULS bearing nominal value of RM 0.05 with a coupon rate of 4% for each 20 mother share of PUC held. The subscription of each 28 ICULS will then see subscribers being reward for 7 units of PUC-WB.

Assuming a shareholder is holding 10,000 units of PUC Mother, he will be eligible to subscribe 14,000 units of ICULS of Nominal value RM 0.05 which pays a coupon rate of 4%. Full subscription will cost RM 700.
For that, the shareholder will be rewarded 3,500 units of PUC-WB

Assuming that market value PUC-WB at 6 cents, and ICULS at 4.5 cents (4.45% based on dividend of 0.2 cents) the shareholder will see a potential market value of RM 210 (3,500 units x 6 cents) from PUC-WB and ICULS at RM 630 (14,000 units x 4.5 cents) for a take up right issue exercise that cost RM 700.

In summary, exercising the right issue could be seeing a gain of 20% based on a potential value of RM 840 over the cost of RM 700.


PUC can be an interesting company to be invested over based on
- Focused direction in the renewable energy sector in Malaysia
- Global interest in bringing down green house gas through renewable energy pave opportunity for renewable energy player
- PUC is looking to develop a local renewable energy island
- Potential realignment in company asset and balance sheet that might see non core asset disposal to raise cash for further capital expansion.
- Attractive corporate exercise that could benefit subscribers.



Hike in while low? You decide
Bone's TP : RM0.17

Cheers and have a nice day

Regards
Bone

PUC (0007) - PUC - Full On Green 
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