ANCOM (4758) - Brewing Out RedBerry
Ancom Berhad is the holding company that had a diversified business ranging from petrochemical products, logistics and media & advertisement sector. It's listed subsidiaries includes Ancom Logistic Berhad and Nylex (Malaysia) Berhad.
Ancom
Berhad had been embroiled with in the hot screen back then at the end
of 2013 and beginning of 2014, which had news circulating that the
company had sold it's "The Malaysian Reserve" financial daily to
billionaire Syed Mokhtar after the division had been chalking up huge
cost into the company financial.However, the sale of "The Malaysian Reserve" had yet to come to public even though close sources confirmed on the deal, putting a big question mark on the next possible corporate moves in the coming days.
Let's have a quick look at the chart of Ancom
Ancom had been heavily accumulated during the period of May to July 2014. Solid accumulation are sighted with insider buying averaging at the range of RM 0.55, of which most of it being open market purchases from Dato Siew Ka Wei, the Managing Director of the company.
A quick resistant outlook will see Ancom testing RM 0.55, while breaking above that will put Ancom back into the previous trading range between RM 0.55 to RM 0.70.
Ancom - Brewing out the Berry
The recent financial result had saw Ancom inching back to the black. Although the group had recorded a lower revenue, the profit margin had increase due to lower operating expenses, which could be highly due to the disposal of "The Malaysian Reserve" division to be bankrolled by Syed Mokhtar. The latest FYE 2014 for Ancom's media division saw a segmental profit of RM 1.3 million compared to a segmental loss of RM 25.4m in FYE 2013.
While The Malay Mail is not directly linked with Ancom, it's connection to the group is through the common shareholder of Dato Siew Ka Wei and non independent director Tan Sri Al Amin Abdul Majid, both having indirect stakes of 46.79% in the Malay Mail. Currently, The Malay Mail is running on a deficit with net weighing around RM 10million, however, will be looking to turn into the black during FYE 2015.
According to insider sources which are familiar with all the events and happening brewing in Ancom, Ancom had been looking to list their media arm Redberry Sdn Bhd into the market, and inject The Malay Mail into RedBerry as well. However, Redberry Sdn Bhd most prized asset is from the 75% owned Meru Utama Sdn Bhd, which had concession rights to advertising mediums in the KLIA and KLIA , in which the latest registered profit propping up to RM 5.68 million.
Insider prediction is that Ancom will probably privatized Meru Utama away from Redberry Sdn Bhd and inject The Malay Mail so to prepare their media arm for a public listing. Meru Utama, a solid cash cow for Ancom, could be looking to worth more than RM 120million due to it's exclusive rights in the KLIA and KLIA2 airports.
Ancom is currently running in tight timeline, and the urgency to list their media arm into the public to leverage on the public for the business is a vital move for Dato Siew Ka Wei and Ancom.
Ancom will be an interesting outlook due to
- Huge corporate action in the coming days
- Trading at support level of RM 0.45 range, with insider buying range at RM 0.55 and above
- Trading at 35% of the NTA of RM 1.30
- Possible sale of Meru Utama Sdn Bhd which is worth more than RM 120 million
- Unpublicized sale of the Malaysian Reserve financial daily
- 47% shareholding in Ancom Logistic Berhad, which is sitting on net cash of RM 29 million.
- Possible listing of Media Arm - Redberry Sdn Bhd
Boil the Redberry Soup? You decide
Bone's short term TP : RM 0.60
Cheers and have a nice day
Regards,
Bone
http://bonescythe.blogspot.com/
