JERASIA (8931) - If you had missed Padini run up 1 year ago, you better not miss this!
Today, I am going to share to you on a company that had the potential in replicating the success story of Padini Holdings Berhad. As I believe most of us know of the brand Padini, it's major growth in the recent years had been spectacular, which is creditable to it's new concept store - Brands Outlet.
To summarize on Brands Outlet, this concept store offer a wide range of variety at above average quality but at a attractive price. And it's purchase always enticed consumer to buy more for a cheaper price. For example, a adult long sleeve shirt will cost RM 80 for 2, where quality are not compromised. If you were to go to Parkson, 1 long sleeve shirt will easily cost you more than RM 100. (That is the reason for the downfall of Parkson)
Clothing and apparels is a must for everyone, unless you are still living with in the jungle with some tribes. Padini ability to capture the right market demand had been heavily rewarded with a rising up share price. Now, Padini is sitting at a market capitalization of RM 1.6 billion.
Now, Padini is already very successful. Of course, today I am not going to promote Padini to you, but in return, I am going to promote a very unique company which had the capabilities to replicate the journey of Padini. Of course, I am not going to say that this unique company is going to replicate Padini success in 100%, but being able to replicate 50% will still consider as not bad already, because this company is still quite unknown to most of the retail investor, and the potential of this company is so huge.
How huge is the potential of this company? I will reveal to you later on. But, I have to inform you that you need to act really fast, because good thing doesn't wait any long for those who are slow.
So, what is the name of this company ?
So it is Jerasia Capital Berhad (Jerasia - 8931). This company is host towards brands like Mango, Touch, Violeta, Terranova, Nike, CALLIOPE, Ladylike, Milani, Charlie, and concept store Trio Basic.
Before I will go down to the details on Jerasia expansion plan, I will like to show you a quick outlook on the company share price.
As you know, Jerasia is currently just having 82 million of shares. At the current price of approx RM 0.68, the market capitalization is just a merely RM 55.38 million (Padini is RM 1.6 billion). Although the share price had been subjected to some upwards rising, I strongly believe that this is just a start for Jerasia. Based on the technical chart, you can easily see that Jerasia had broken 2 long term down trend resistant line, which strongly suggest that on the coming upwards trend of the company share price. Jerasia share price saw the highest at RM 1.15 back at August 2015.
So why am I saying that Jerasia can potentially replicate the growth story of Padini ?
Here is one of the most important factor that you will have to know.
The brand is called - TRIO
If Padini is riding on the success of Brands Outlet, now Jerasia is coming out with Trio Basic Concept Store.
Of course, I will reckon that there are still space of improvement for TRIO basic concept store. For example, Brands Outlet have a grand entrance with a captivating color (Brown Orange Color), mixing with yellow ceiling down light and, it is able to give a different impression that carries certain quality and standard. In my opinion, if Trio can provide a little style on it's concept store (rather than just plain white based background), then they are capable for a head to head fight with Brands Outlet. Since this concept store is just a start for the company, I expect that there will be more improvement and upgrades in it's appearance.
But, what is most important here is, Jerasia had came out with a new offering to cater to the market needs, and this new concept store can be very potential if it continue to position itself and penetrate successfully into the market. Nevertheless, the TRIO Concept store are currently generating massive revenue and profit for the group, and this concept store will be expected to see more contribution in the coming future as the company continue to expands is foot mark into new market.
Expansion Expansion Expansion
Now that Jerasia had successfully tested on it's new concept store - TRIO, it is time to talk about growth and expansion, which ultimately bring forth to you - Public Fund Raising and Corporate Exercise.
As you can see, Jerasia is just having 82 million share of Par Value RM 1.00, with retained earning of RM 62 million. For the past 10 years, there had not been 1 corporate exercise, except for some dividend paid to investor.
I believe, Jerasia will be on the route of public fund raising in order to accelerate on the growth and expansion of the group.
Potential Fund Raising Option
Option 1 - 10% Private Placement. Since the Par Value of the share is RM 1.00, so the minimum pricing of the private placement will be RM 1.00. Based on the current share base, Jerasia can raise RM 8 million from this exercise, which is considered not bad.
Option 2 - Share Split 1 to 2, subsequent private placement or right issue free warrants. For this option, splitting the share into 2 will see the share issued becoming 164 million shares, and Par Value becoming RM 0.50. A private placement of 10% will also raise 8 million if priced at RM 0.50. However, a right issue will provide the company with some cash and not diluting it's earning immediately until the conversion of warrant.
Now, I had shared to you a very valuable company with the potential of replicating the success story of Padini.
Currently at the price of RM 0.675, you are buying into a company that gives you
- a massive potential on future growth and expansion plans
- a share with NTA of RM 1.75
- a company with high potential of corporate exercise, with more than 40% upside potential from the current price
- a profit making company
- a resilient company being in apparel industry (everyone need to wear clothes)
- a company benefit from strong USD
Still not convinced enough?
Now, I will throw in some extra insights for you. Since the company is reporting on the performance from October - December 2016, which is a holiday season and mega sale season, it's coming quarterly report in February is expected to be stronger.
Alright, now that I had informed you on all the potential of this company, the only thing left now is your own decision again.
Lastly, you have all the rights to doubt my sharing, but I have all the rights to show you a lot of my success story in the like of such as AWC at 30 cents, Denko at 38 cents, Gadang at 80 cents before bonus issue, Penta at 27 cents, and the recent ones like Arank at 66 cents which is now trading at RM 1.20.
I am not asking you to believe me and my view. But if you believe in the management of Jerasia Capital Berhad, and believe in the potential of the new concept store Trio, and believe in the coming expansion plan, I don't know what is stopping you now.
JERASIA (8931) - If you had missed Padini run up 1 year ago, you better not miss this!
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