IRETEX (7183) IRE-TEX CORPORATION BHD - Only Read This If You Had Not Huat Enough

IRETEX (7183) IRE-TEX CORPORATION BHD - Only Read This If You Had Not Huat Enough

As most of you can start to smell the essence of election looming around the corner, I would like to reassure you that you should start believing your nose because it ain't going to go wrong this year. While the big question is when will this be, I have to leave it to you to decide, but if you are asking me, I would say it is really very very near already, and don't ask me why.

And because of this, I have to work extra hard by putting up myself on weekends and staying up at night just for one thing - To make sure you HUAT before the 14th General Election. If you had been following me closely and tightly, I am sure that you had indeed make 1 round of Huatness at KSL, because I dedicate that counter for you to Huat at Chinese New Year.

So for this time around, I do not know if you really want to continue to ride the HUAT wave with me or not, therefore I am opening my doors again and let you decide whether you want to make another big HUAT at this high potential company.

Now, before I continue to take up some of your precious time in reading my "KLSE Sherlock Holmes Series", I need you to do something for your own first.

Firstly, if you think I am going to bull sheet later on, please close this page immediately and leave as fast as you can, because your time keeps on ticking, and I don't want to waste your precious time.

Ah, don't say I did not forewarn you earlier. You choose at your own accord, to continue reading this article now, and of course, you choose to continue this Huat Journey as well!!!

Since you are so adamant to make sure you Huat all the way, I will tell you this company that is packed up to the full brim and waiting to explode vertically now.

This company is none other than - Iretex Corporation Berhad (Iretex - 7183)

Actually I intended to inform you earlier, but it had shot up faster than I had expected. However, I believe this is just a starting warm up. As you can see, Iretex had broken up from a 2 year long term downtrend line. I don't know if you want to agree with me or not, but breaking out from a 2 years long resistant line is actually quite attractive and could signal a reversal on downtrend as consolidation is already saturated now.

So why do I need to introduce you to Iretex ? I know you will want to argue with me that this company is full of craps and losing money with some problematic shareholder. Yes, in fact, I have to inform you that Iretex is currently a money losing company. However, not all bad boys will be bad forever right? Let's look at the bright sight also, and they will turn out to be good man when grow up, which I believe could happen in Iretex.

What is the interesting news here is that according to familiar sources, Iretex is currently being targeted upon for acquisition / take over exercise.

Since Iretex is involved in packaging / corrugated carton  / hard paper box manufacturing and related services, we will look at some of the historical events in this industry.

1. Japan Oji Paper take over United Kotak Berhad in 2011 (Source - The Star)
2. Japan Oji Paper take over HPI Resources Berhad in 2011 (Source - The Edge)
3. Japan Taisei Lamick take over Malaysia Packaging Industry Berhad in 2016 (Source - The Star)
4. KPS take over Century Bond Berhad in 2016 (Source - The Star)

The latest heat in the packaging industry is Singaporean owned Oregon Tech launches take over offer on Denko Industrial Corporation, which involves in food packaging.

As a conclusion, I would like to conclude that the packaging industry in Malaysia is very attractive for foreign company for M&A exercise.

Looking at Iretex, the company is currently having a market capital of RM31.5 million at the current share price of RM 0.235 based on 134.26 shares. This is a very lucrative price for big player such as Oji Paper or Thai Container in their expansion plan at the South East Asia region.

Here is why I think Iretex is very attractive.

As you guys would know, Iretex is actually looking to restructure and strengthen their balance sheet through a par value reduction of RM 0.40 into RM 0.20 and a 10% private placement exercise after the par value reduction. However, this restructuring plan had been aborted, which at the mean time, emerge 2 new shareholder (Elite Cosmo Group Limited and Famous BlueChip Sdn Bhd).

Prior to the abortion of the previous plan, the company is still looking at ways to strengthen the balance sheet. For some, the abortion of the plan might be a bad thing, but for me this move reassured me further more that why Iretex will be looking to surge further from here.

Here is what I think.

Scenario 1, raising fund through private placement. Placing a 10% private placement at RM 0.40 par value now can raise x2 more fund from a par value of RM 0.20. Since now is RM 0.235, that is a very lucrative price now if there is a private placement.

Scenario 2, white knight identified which is looking to take over the whole company. Since now Iretex is already all time low, I don't foresee much chance of this company going lower, and a take over offer will definitely see the share price shooting higher. Since there are some people that are converting some loan stock (Iretex-LA) at an exercise price of RM 0.60, that could be a good hint that probably Iretex is going to head for that direction soon!!!

Wow, now are you getting fired up enough for Iretex ?

For now, I think this is adequate for your mind to crunch the idea and prospect first, because if I continue putting in more information, I am afraid this thing is going to shoot through the roof without you.

Now since you are in this Huat Journey with me, I leave the next course of action in your own good hand.

Cheers.




IRETEX (7183) IRE-TEX CORPORATION BHD - Only Read This If You Had Not Huat Enough

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