My Dearest Doc,
Here is an update to the YLI Holdings posting.
Today's Business Times reported the following, Syed Yusof buys 30pc stake in YLI
- Syed Yusof buys 30pc stake in YLI
June 9 2007
TAN Sri Syed Mohd Yusof Tun Syed Nasir, a prominent property developer, has bought 30 per cent of YLI Holdings Bhd, a pipe maker for an undisclosed sum.
Syed Yusof bought 29.6 million, or 30 per cent, of YLI on June 7, the company said in a statement to Bursa Malaysia yesterday.
On the same day, the same number of shares were sold by Loh Yok Yeong, the major shareholder of YLI. This means that Syed Yusof is now the single biggest shareholder of YLI.
Loh held some 40 per cent of YLI as at June 30 2006, its annual report showed.
Shares of YLI were up 10 per cent to RM3.20 yesterday.
Syed Yusof, who made a small fortune from the takeover of Southern Bank Bhd by Bumiputra-Commerce Holdings Bhd, had told Business Times that he was looking to buy shares of undervalued companies.
In August last year, Syed Yusof sold his shares in Landmarks Bhd to Genting Bhd, presumably for a tidy profit, after he threatened to make a bid for the firm.
Then, he was unhappy because the incumbent shareholders wanted to dilute his stake and tighten their grip on the company.
It is unclear what he intends to do with YLI. The pipe maker reported an 8 per cent rise in net profit to RM14 million in fiscal 2007. It also has a clean balance sheet: about RM50 million in cash and zero debt.
I just realised that I had a copy of OSK report in my mail box on YLI too!
- Given that the new shareholder may significantly boost sales going forward, we have fine tuned our earnings projection by 14.1% and 15.3 for the next 2 years. On top of that, the news may also uplift market sentiment for YLI and thus we are upgrading our recommendation to TRADING BUY. We have applied a more aggressive valuation parameter based on 5 year average peak PER of 20.7x FY08 EPS that translate into fair value of RM4.18 or 43.6% upside potential.
Posts
2 comments:
MM,
Thanks for the update.I should have posted a response earlier but too busy.
The projected profit margin by OSk over the next 3 years are only 11-12 % that some how imply the competitiveness of the industry and the impact of steel price increase.
But with the turn of events and if i am not wrong--- there is a policy for Puncak to buy pipes from local maker rather than cheaper alternative from Indonesia player,the revenue is expected to increase with the Major shareholder
doing the linkage.Thus i amy wait a quarter or two to see how things unfold.
The sellout by the founder caught me by surprise though I can see the factory is full of activities and production in full stream.
I am quite comfortable with YLI net cash position and better dividents payout as compare to other players.
Any commets on the New Major shareholders?
tanhin
My Dearest Doc,
It's no problem, really.
I would be cautious with the new shareholder.
rgds
Post a Comment