The share price of Advanced Synergy Bhd (ASB) surged almost 30% in a couple of days earlier last week in heavy volume trading. ASB’s share price rose from 14.5 sen at the close on May 16 to as high as 19.5 sen on May 21 before closing the day at 18.5 sen. ASB’s Irredeemable Convertible Unsecured Loan Stocks or ICULS (ASB-LA) also rose as high as 10 sen on May 21 before ending the day at 9.5 sen. The volume traded for both the mother share and loan stock during those last few days reached multi-year high. ASB is a diversified group with interests in many industries, including hotel and resorts, information technology, property development, travel and tours, manufacturing and financial services. Its hotel and resorts division under the brand name of Holiday Villa and travel and tours business are the main revenue contributors to the group. In the financial year ended Dec 31, 2013, ASB suffered a net loss of RM24.7 mil compared to a net loss of just under RM1 mil in FY12. Last year’s loss was attributed primarily to impairment loss on a foreign investment. The attraction of ASB lies in its asset rather than profitability. Its net asset per share is 86 sen which is more than four times higher than its current share price. 

The company has land and hotel properties which can be sold to unlock its value. Just earlier this month, ASB announced that it has disposed of a foreign subsidiary which owns a hotel in France for €10.5 mil (RM46.8 mil). The gain from the disposal is estimated at RM10 mil. ASB-LA offers its holders an option to partially use cash payment to convert to mother share. The nominal value of ASB-LA is 15 sen and its conversion price is 30 sen. Holders of ASB-LA can use two units of ICULS to convert to one ASB ordinary share or use one unit of ICULS plus 15 sen cash payment. This effectively makes ASB-LA a warrant-like instrument under the ICULS plus cash conversion option. It effectively allows its holders an option to “exercise” the convertible by surrendering one ICULS and paying 15 sen cash.