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Monday, December 10, 2018

JAKS - My Advice - Koon Yew Yin

Author: Koon Yew Yin | Publish date: Mon, 10 Dec 2018, 12:36 PM

Since I have sold all our shares, many people asked me why I sold all our shares and should they buy it at 50 sen per share.

As I said, forced selling was a blessing in disguise. I was forced to sell at much higher prices in comparison with the current price of 50 sen per share.

I have extracted the following numbers from its latest quarter result:

Short term bank borrowing Rm 99.38 million

Bank over draft Rm 18.214 million

Long term borrowings Rm 323.978 million

Total Rm 440.978 million

Trade & other payables Rm 840.1 million

Total Rm 1,281 million

Total issued shares 546 million

Debt per share 1281 divided by 546 = Rm 2.31 per share.

The company is trying get back to some money by selling convertible warrants at 25 sen each with a conversion price of 64 sen per share, totalling 89 sen. Who will buy the warrant?

As you know the company has a lot of unsold properties and under the current depressed market condition, it will not be able to sell its properties. Moreover, Star’s legal claim for non performance and late completion has not been settled.

As a result, interest charges will be amounting in the next few years. The company cannot hide its losses anymore and it has already reported losses in the latest quarter.

I have already admitted my expensive Rm 64 million mistake because I was focusing too much on its power plant in Vietnam and ignored its property and contracting businesses.

It can only report losses in the next few years.

Why should you buy when the company cannot report any profit?

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