As shared in my previous two posts on Mega First Corporation Bhd warrant, bought the warrant at 0.62x and hoping to get 100% or 200% gain. I didnt not make the forecast, but is referring to analyst long term target price.
MFCB latest 4 quarters profit is RM88mil now. Last year the news said ...... enabling annual profit contribution of about RM300 million to the company from the following year (after completion of dam), Executive Director Khoo Teng Kiat told The Malaysian Reserve. Meaning once the dam project completed, big jump in profit.
I saw MFCB early this year. Traded a bit and made small profit. Analyst keep saying good. Newbie also bought it and hold. The reason I sold because once project finished, I thought no more income.
Recently price up a bit. So i went to study again. I found the word "concession". It means after the dam is completed, they will start to sell power generated. Is like collecting toll, long term income for many years. Why I didnt see the word earlier.
I then shared the report with Newbie and he started buying more MFCB. Medium term MFCB target price RM3.16, which is good also. At that time MFCB was RM2.0x only. Then I check whether got warrant or not. I did some calculation on the warrant, wow wow wow!!! It could have more than 200% upside. And I started buying and Newbie sold his MFCB and buy the warrant.
The risk is always something may go wrong. Whatever stocks we buy, also the same. But if this stock perform as per what analyst forecast, then the potential upside is very high.
Price has went up in the past few days. One thing I have to highlight, one of their power operations in China which contributes 70% of their earnings will expire next year 2017. But analyst said in 2022. Maybe they had got the extension. Execution and environmentalist also pose a risk. No worries because their new dam profit will few be folds higher than their current total profit.
More detail, please refer to my previous two posts.
As mentioned earlier, I will not go big in Fibon. It announced some bad result. Sold all. Made a bit from first batch. Lose 10% on second batch. Net still lose few percent. This does not affect my portfolio much because small investmemt. Reason for selling? Same as what I have shared earlier, no concrete growth plan. If no concrete growth plan, why did I buy? Because many people keep saying good got growth, without providing details. Yes, I made mistake by buying little, should not buy at all. But I have improved on this. I posted in my blog, few weeks ago I have already changed my portfolio and strategy, if no details, I will not buy. This Fibon is those left over and also I have decided to add some for long time.
Anyway, small loss on small purcahse nothing much to talk about.
I have forgotten I'm supposed to study more on PWROOT. If good, may start to buy.
This year can be considered a good year. Good gain for many stocks especially JHM and KESM, gained 70% to 80%.
Some stocks making losses but these are very small. The real casualty is Tek Seng.
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Thanks
http://politemarket.blogspot.my/2016/10/mfbc-wa-200-upside-fibon-pwroot.html
