Many would be familiar with the saying -Price is what you pay, value is what you get. This article is to discuss exactly this by considering Ajiya as a case study.
The choice for Ajiiya is particularly fitting, especially after the recent Private Placement (PP) exercise. If we are to observe closer, the huge gap in the value of Ajiya stock is obvious between the following two perspective:
1. as how the ‘Big guns from behind’ sees it, and
2. as how retailers sees it
From the summary chart below, Ajiya Bhd has fixed the issue price for its PP of up to 6.92 million shares at RM4.20 per share. These 6.92mil shares were listed on 30 Nov 2015.
Interesting point to note
That we not only sees there is not a selldown of these 6.92mil PP shares following the listing, but there are signs of accumulation, at prices above the currently traded price. The total shares that changes hand since the listing day 22 days from the private placement listing at 30Nov to now (6 Dec 2016) is only 4.4mil, even lower than the amount of the new PP shares listed.
The price of accumulation is from RM4.5 to even RM4.79, while the current trading price is RM4.43
COMING QUARTERLY REPORT
The coming quarterly report is expected to be released in mid-January, or the next 1-2 weeks. This QR report is expected to be good as previous and outgoing construction and development projects is to be translated into revenue growth for the group.
Ajiya is a major supplier for government-driven local housing projects, in particular, the affordable housing scheme under Perumahan Rakyat 1Malaysia Bhd (PR1MA).
Ajiya’s cash position had also improved in the last one year, with cash and cash equivalents totalling RM33.64mil as at the end of August 2015, compared with RM23.89mil a year ago.
Hence, there is further potential upside movement for Ajiya’s shares. The present market price of Ajiya is clearly traded below its actual value.
Target Price: RM5.50 based on PE of 18
https://www.youtube.com/watch?v=_OPjKeT6I_A
AJIYA (7609) - AJIYA BERHAD - A case study for Anomaly in pricing of Private Placement
http://klse.i3investor.com/blogs/NiNa/89186.jsp
AJIYA, AJIYA (7609), 7609, EN7609, KLSE:7609, Investing, NiNa
