Monday, December 10, 2012

Time Engineering is not related to Time Dotcom anymore

Just wanted investors or traders to know. Today, Time Dotcom (TdC) is having a good run due to its announcement of distributing (proposal) 6 shares of Digi's shares for every 25 shares of TdC held. While this is good in terms of untangling its Digi shares held hence allowing shareholders to directly hold Digi now, for shareholders of Time Engineering, one should note that it is no longer related to TdC. See below. I see that Time Engineering rose 8% as well today. Should not happen.

I would say Time Engineering now has not much of a business, but its balance sheet is clean with some RM60 million cash. Don't think its worth RM244 million of market cap as at now though. Look below, it is struggling to find good businesses from its liquid assets it holds.

On another note, TdC by distributing Digi's shares, it's performance in future will be more reflective of its own performance as investment income (dividends contribution from Digi) may be reduced by half. Also, assuming Digi's price is RM4.84, the value of Digi's shares that is to be distributed by TdC per share is at 0.24 x RM4.84 = RM1.16.


cykoay said...

Hi felicity,
Do you think now is it still worth to buy TimeCom? Anyone who bought TimeCom will be distributed Digi share?

felicity said...

I think so. If you believe in telco stocks, TdC is a growth stock. More bandwidth means more business for TdC. the dividend in specie is just an untangling of its holding of Digi which is good. It is up to the shareholders whether to sell or keep Digi.

cykoay said...

so those who buy TdC also will be allocated Digi share ? but it is just proposal , right?

felicity said...

It is not approved yet, but I guess it will be approved