Aiya PE so high, another wrong decision of buying TA Global???
Written by Chong Jin Hun
Monday, 23 November 2009 09:15
KUALA LUMPUR: TA Global Bhd shares opened unchanged at its issue price of 50 sen on its first trading day on Monday.
TA Global is the real estate and hospitality arm of financial services entity TA ENTERPRISE BHD [].
At 9.05am, shares of TA Global, the second most actively traded stock on FBM KLCI, fell 1.5 sen to 48.5 sen.
In a note to clients, RHB Research Institute Sdn Bhd said at the research house's indicative fair value of 57 sen for TA Global shares, the stock would trade at a price to earnings ratio of 18.9 times compared to the industry average of 11.9 times.
"The company has a dividend payout policy of 20%-50%. In our dividend forecasts, we are assuming a payout of 20%, which translates into a dividend yield of 1% to 1.1% p.a. based on our fair value of 57 sen," RHB said.
TA GLOBAL - PA is deemed to be EXPENSIVE, u need to pay 50 cents to convert to mother, with current price of mother 0.40 +0.50 = 0.90, can mother become 0.90 after 3 years, if can better buy mother loh
Instrument Type : Preference Shares
Description : Irredeemable Convertible Preference Shares
Listing Date : 23/11/2009
Issue Date : 05/10/2009
Issue/ Ask Price : MYR 0.5000
Issue Size in Unit : 1,215,363,632
Maturity Date : 03/10/2014
Revised Maturity Date :
Exercise/Conversion Period Type : 2 Year(s)
Revised Exercise/Conversion Period Type : 0 Year(s)
Exercise/ Strike/ Conversion Price : MYR 0.5000
Exercise/ Conversion Ratio : 1:1
Mode of Satisfaction of Exercise/Conversion Price : Tendering of securities
Settlement Type/ Convertible into : Physical (Shares)
Remarks : Tenure : 5 years commencing from and inclusive of the date of issue.
Conversion period/status :
(a) The ICPS will not be convertible from the date of issue until the end of
year 3 from the date of issue;
(b) Commencing after the end of year 3 from the date of issue until the
maturity date, the ICPS is convertible into ordinary shares of the Issuer at
the Conversion Price; and
(c) Mandatory conversion of all outstanding ICPS held by ICPS holders by the
Issuer at Maturity Date
No cash outlay is required by the holders of ICPS for the conversion of ICPS
into ordinary shares.
Description : Irredeemable Convertible Preference Shares
Listing Date : 23/11/2009
Issue Date : 05/10/2009
Issue/ Ask Price : MYR 0.5000
Issue Size in Unit : 1,215,363,632
Maturity Date : 03/10/2014
Revised Maturity Date :
Exercise/Conversion Period Type : 2 Year(s)
Revised Exercise/Conversion Period Type : 0 Year(s)
Exercise/ Strike/ Conversion Price : MYR 0.5000
Exercise/ Conversion Ratio : 1:1
Mode of Satisfaction of Exercise/Conversion Price : Tendering of securities
Settlement Type/ Convertible into : Physical (Shares)
Remarks : Tenure : 5 years commencing from and inclusive of the date of issue.
Conversion period/status :
(a) The ICPS will not be convertible from the date of issue until the end of
year 3 from the date of issue;
(b) Commencing after the end of year 3 from the date of issue until the
maturity date, the ICPS is convertible into ordinary shares of the Issuer at
the Conversion Price; and
(c) Mandatory conversion of all outstanding ICPS held by ICPS holders by the
Issuer at Maturity Date
No cash outlay is required by the holders of ICPS for the conversion of ICPS
into ordinary shares.
4 comments
Well, I believe your last line says:
"No cash outlay is required by the holders of ICPS for the conversion of ICPS into ordinary shares."
So, effectively the TAGB-PA is worth as much as TAGB (as issue price and conversion price are both 0.50, and conversion is by surrendering 1 TAGB-PA for 1 TAGB). The real difference is that conversion can only begin at the end of year 3.
Hin Lun,
So end of 3 year, no money is required to convert it to TAGB.Am i correct ?
Normally preference share has dividend % ? Do TAGB-PA has any, as I cannot find in the annoucement.
Thanks
Hi Eric,
You are right, because the issue price of the PA is same as conversion price. But take note that conversion is mandatory at the end of year 5.
The IPO prospectus includes the salient terms of ICPS, which says:
"No dividends shall be payable to ICPS holders".
I think this explains alot about the heavy discount to the mother now.
Thanks hin lun for your correction.
We really need you to clarify for us.
Kam Sia.