Monday, February 4, 2013

Another Chinese news another worry

What is with China based Chinese companies when Chinese New Year is near? This time around rumour is Patimas is to be invested around 10% presumably by Tencent Holdings.

Let me reproduce the Balance Sheet again...

This kind of Balance Sheet needs rebalancing through injection of new funds. Why buy from the market or off the market - whichever happens? Let me say again - Patimas needs new injection from new shares issuance. There are no hidden assets which are undervalued. The only attractive part if the company is - the data centre presuming that it is working well.

EY had provided disclaimer on its accounts last can read more through its Annual Report.

Then another rumour, apparently Nur Jazlan, the son of an ex-Information Minister (keyword Information Minister) is taking over Patimas. Good news for shareholders? At what price? Patimas - A negative NTA company is now already trading at RM100 million valuation. Perhaps a premium of 50% to sweeten the taste of the list of punters who are already punting on the stock big time. That comes to RM150 million valuation?

Well, these are all the question marks - firstly why a company that needs injection is being bought from the market (if its true) and why Nur Jazlan is only interested after the share price had run from below RM0.02 to now RM0.13? Suddenly Patimas becoming so attractive?


gnihckes said...

Hi, could you please enlighten on this"Let me say again - Patimas needs new injection from new shares issuance." what is the reason behind? to restructure the business? thanks in advance..

felicity said...

Hi Gnihckes

It is because under the PN17 and other PNs, one of the major problem it has to tackle is to improve the balance sheet - to improve balance sheet, it needs cash injections. Any investor that will want to lead the company, will need to resolve the balance sheet problems first among the major problems that it faces.

if the buyer if they are real is to buy from the market, it does not actually have any effect to the BS.

gnihckes said...

Thanks felicity for your clarification. appreciated =)