This is very high risk, I think i better skip.
Sinotop is the “new-look” John Master Industries Bhd (JMI).
Chinese textile manufacturer Be Top Group Ltd and its subsidiary, Top Textile (Suzhou) Co Ltd, are injected into Sinotop for RM393.2 million. Sinotop’s old assets, which were under JMI, were disposed of via an open tender exercise that was completed in July last year.
Following that, shareholders of JMI received 63 sen for each share. The company undertook a capital reduction exercise followed by a capital consolidation exercise whereby four shares were merged into one.
The injection of the Chinese textile companies into Sinotop came with a profit guarantee of not less than 100 million yuan (RM47.9 million) for the financial year ended Dec 31, 2009 (FY09) and a profit guarantee of not less than 125 million yuan in FY10.
This translates to prospective price-earnings multiple of about four times based on Sinotop’s enlarged share capital that could be as large as 1.1 billion shares of 20 sen each. On July 1, Sinotop said Bursa Securities had granted it a conditional waiver from being categorised as an affected listed issuer under PN17.
Following that, shareholders of JMI received 63 sen for each share. The company undertook a capital reduction exercise followed by a capital consolidation exercise whereby four shares were merged into one.
The injection of the Chinese textile companies into Sinotop came with a profit guarantee of not less than 100 million yuan (RM47.9 million) for the financial year ended Dec 31, 2009 (FY09) and a profit guarantee of not less than 125 million yuan in FY10.
This translates to prospective price-earnings multiple of about four times based on Sinotop’s enlarged share capital that could be as large as 1.1 billion shares of 20 sen each. On July 1, Sinotop said Bursa Securities had granted it a conditional waiver from being categorised as an affected listed issuer under PN17.
1 comments:
Anybody contemplating of investing in Sinotop should take into account the huge dilution after the 1 for 10 right issues in evaluating the fair price for Sinotop. For me, there are so many attractive counters in Bursa and I might as well not wasting my time in valuing a complete stranger.