Friday, June 23, 2017

Wing Tai: 50% discount and still it is reasonable?

Wing Tai Malaysia (Wing TM) has offered to privatise the company with the current controlling shareholder offering the shares at 50% discount from the fair value of RM3.55 to RM3.59.

The summary is here or alternatively one can read the full detail of the advise from Mercury Securities here. I really have doubt over the appointment of the adviser as it is really a small outfit and moreover Mercury is originally from Penang. So was Wing Tai which was Dragon Phoenix many years ago.

Wing TM is currently trading at around the offer price of RM1.80 which means that there has been some buying (by some parties) and the potential of it reaching 90% for compulsory takeover is very high given that there are very loose shareholders in its Top 30 except for the largest shareholder which on paper holds more than 66% - i.e. the Cheng family.

One should take note of the intrinsic value which is below.

I am wondering on the rationale that is provided i.e. lack of trade volume and the offer is a premium from its historical price trade. That is obvious isn't it as who would sell if it is below or at the market price. Just read the rationale provided by Mercury below.

However, no matter what it is I believe that Wing Tai's controlling shareholders and insiders have accumulated enough and it is a difficult fight to keep it afloat and there is no guarantee that the management is going to treat one fairly anyway after this. One less of these kind of company in Bursa Malaysia is for a healthier exchange.

Also, in the future if Mercury provides advise again, do be careful as apparently they also advised on The Store deal.

Thursday, June 1, 2017

BFM has some way to improve

I woke up this morning listening to my favorite radio station over the BFM app as I am in Penang today and there is no airwaves coverage for 89.9 unless I go through the digital route.

In today's interview for the Breakfast Grille which usually airs for 30 minutes over 8.00 to 8.30am slot, they were interviewing a VP of Nokia. I thought they have a very good organization representative with good strong potential line of questions. I was excited until I hear the interviewer - a new guy to BFM, Tan Chung Han - less than 1 year I presume.

Besides not having the right interviewer mindset, his line as well as flow of questioning is not really strong.

If I am an interviewer, I would be very interested to know where did Nokia go wrong and how they see the future of smartphones is going to be. What makes them making a comeback and how they are trying to change the landscape.

I would want to understand the landscape better. Where is Nokia's positioning.

There is no problem on Tan Chung Han's knowledge as perhaps he had done homework before the interview.

I seriously felt that the opportunity given is not being used to the best possible way. BFM is the only financial channel in town and I fully support it. Yet, there are many ways to improve. To those guys Julian and Tan Chung Han - try looking at how Bernie Lo, Andrew Ross Sorkin pose and build their questions. Bernie especially can be critical but he puts the line of questions well. There are many more.

We as listeners can hope for better informative interviews from these opportunities. I really wish if only Umapagan Ampikaipagan is interested in economics and finance.