ANCOM (4758) - Ancom - Jack Queen King
Ancom Berhad (Ancom - 4758) is a holding company that had diversified business in the logistic sector, manufacturing of agro-based chemicals as well as media segment that includes online and offline printed media and advertising space.
Ancom had been in the hot talk in 2014 as with corporate direction and major reshuffling of the company in order to cope with the fast changing business environment, especially in the media segment. Significant event had saw Ancom Logistic Berhad (Ancomlb - 0048) disposing off it's logistic division and a par value reduction exercise. At the mean time, it had been sighted that Ancom had saw massive open market buy back from major shareholder, Dato Siew as well as company share buy back, including it's subsidiary Nylex.
Earlier this year, it had been reported that Ancom had been eyeing for new shareholder to unlock the value of Redberry and continue steering it higher in the challenging media segment.
While there had been a lot of news regarding Ancom, what is the whole big picture that is going to happen in Ancom come 2016?
Ancom had saw great interest during the mid of 2014, when the stock hit a high of RM 0.70 with treasury buy back as well as open market purchase by Dato Dr Siew Ka Wei. However, the stock had run to it's dry volume consolidation mode in 2015, lingering at the price range of RM 0.40 to RM 0.50, but with gradual treasury buy back as well as major shareholder Dato Dr Siew open market purchase.
With a good 1 year of consolidation, Ancom could had reached a saturated consolidation stage at the price range of RM 0.40, and will be looking to see a good price break out with good supported volume in the coming days, with a target of RM 0.50 in the instant.
Reshuffling The Deck
With the fast changing pace of the business environment, it is either to keep up with the pace or get relegated out of the game, especially in the fast moving media and advertising market that had been taking a huge change from offline to online.
This phenomena had not spared Ancom, where it's media division, Redberry, contribute significant revenue and profit to the group.
To stay up the fight, Ancom might be looking to follow the footstep of it's rival - The Star and HCK Capital Group Berhad.
In 2011, The Star had sold a six-acre parcel that was previously the group office in Section 13, PJ to Jaks Island Circle Sdn Bhd for RM 135 million and a 13 storey office building with a built up of 270,000 sf known as Star Tower.
As for Tan Sri Clement Hii, the newsman which had worked in several newspaper like The Borneo Post and The Star had also started it's property venture through his HCK Capital featuring Roppongi in Cyberjaya, Setia Alam Educity, Education Enclave, The Duo @ USJ 1, Jazz Residence, G Residences Ara Damansara and HCK Corporate Tower and Damansara Perdana.
For this, Ancom will be replicating the movement of it's rival with several prized land asset in Klang Valley.
The group wide restructuring exercise which had been long anticipated could be looking to see a possible framework as the following diagram.
The remainder operation of the chemical and logistic division in Ancom will be most probably injected into Nylex in order to prepare Ancom as a cash rich shell company that will be ready to diversify into the property development segment.
According to close sources, Ancom is looking for a joint development effort for the 3.24 acre of leasehold land in PJ section 13. It is looking to house a mixed commercial and offices development with a GDV of RM 800m to RM 1.5 billion.
Unlocking The Value of Ancom Through Redberry
The listing of Redberry into a new vehicle will definitely help in unlocking the stagnant valuation of assets in Ancom. Currently, Ancom is trading at the value of 31% from it's NTA of RM 1.34, as share price linger at the range of RM 0.40. The sale of Redberry which is looking to be at least RM 100 million will be translating to a cash of RM 0.45 per share ( RM 100m / 219m shares)
This had not counted on the sale of chemical manufacturing division to Nylex as well in order to pave way for Ancom to be a pure property development player.
Ancom had saw massive open market purchase from Dato Dr Siew Ka Wei at the price above RM 0.50, as well as gradual and continuous treasury buy back averaging RM 0.45 to RM 0.50 for the past 1 year.
Conclusion
Ancom will be a very interesting company to be monitored upon after a long awaited corporate exercise which will be looking for a ripe moment come 2016.
- Major group wide business restructuring which involves disposal of business to new entity as well as special dividend payment in 2016
- The sale of Redberry at RM 100m will translate to a cash worth of RM 0.45 for Ancom
- Ancom Berhad to replicate rivals in diversifying into property development
- Ancom trading at 31% of NTA value of RM 1.34
- Dato Dr Siew Ka Wei open market share buy back average RM 0.50 and above.
- Ancom looking for Property JV worth potential RM 1.5billion in prime area of PJ.
Unlock the value together? You decide
Bone's short term TP : RM 0.65
Cheers and have a nice day
Regards,
Bone
http://bonescythe.blogspot.my
