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Thursday, March 26, 2015

Canone - Cannon Up

Can-One Berhad (5105) had been involved in the F&B industry with general cans, manufacturing and processing of food and dairy trading.

Can-One had been a hit in the market back then when the tussle between Can-One management and KianJoo took the heat to the court over shareholding issues. However, the issue resolved and Can-One held 32.9% of share in KianJoo, officially seeing KianJoo an associate company of Can-One.

As of lately, KianJoo had saw a take over offer amounting to RM 1.466 billion, or RM 3.30 per share in KianJoo. With Can-One having 32.9% in KianJoo, how will things be moving forward in Can-One in the coming days?

CanOne had been trading at the range of RM 2.60 after a rebound from the previous sell down. Apparently, CanOne had been moving in a good uptrend as highlighted between the blue lines. According to the reading, the consolidation in the uptrend movement could had came to a point where CanOne will be prepare to channel higher in the coming days.

A good break out above RM 2.65 with substantial amount of volume will be seeing CanOne trending it's way towards the psychological barrier of RM 3.00 in the coming days.

CanOne - Cannon up?

CanOne had been an aggressive growing company which had saw it's revenue putting up more than double compared to the revenue in 2009. Their NTA had also grew intensively from RM 1.15 a share which is 5 years ago to the current RM 3.42 as of FYE 2014. 

While needless to say much about this stock, CanOne is a good growing company that is involved in a evergreen industry which will be seeing more and more demand in time to come as the population of the world continue to grow, putting up more demand for food.

Although 2015 will be a challenging year, the increase in demand for food will be going to contribute to the operating efficiency of the production line.

As for it's investment in KianJoo, Bursa Malaysia had given KianJoo and Aspire to set things out before 31 March 2015, which is the last known extension that Bursa Malaysia had given to KianJoo. Should the deal print out, CanOne could be on it's way to receive a cash proceed of not less than RM 482 million from the sale of their 32.9% shareholding in KianJoo from the proposed disposal which entitled shareholder of not less than RM 3.30 in cash being return to shareholder via proposed capital reduction and repayment exercise in accordance with Section 64 of the Companies Act, 1965.

According to some sources, the deal between KianJoo and Aspire should be able to iron out, which will be seeing KianJoo shares at RM 3.30.

CanOne will be a very interesting stock to be look out for the coming week as seeing it's subsidiary oncoming corporate development. Should the deal could not materialize, CanOne will still be a very attractive and undervalued company should we valued CanOne at PER x8 from FYE 2014 EPS of RM 0.4185, translating to RM 3.35.

The current price of RM 2.6 is also a 24% discount from the NTA of RM 3.42. CanOne also had a considerable amount of revaluation reserved from it's property and land which is mostly at year 2011 valuation.

Cannon with Canone? You decide.
Bone's short term TP : RM 3.00

Cheers and have a nice day


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