“Priceworth forecasts Rm100 mil net profit for FY18.” NO
kidding , from less than Rm2 million profit company to Rm100 million profit!!
I am sure the recent news from this company caught many
investors’ attention and I do not wish to put it up on Priceworth’s i3 page as
many will curse me for being the devil advocate.
As usual, market will react to such an eye catching
headline:-
There are 2 big questions in my mind and I would like to put
them on record for case study purpose:-
- How to get PE of 2? The calculation of EPS 10.89 sen and the PE of 2 basing on the forecast profit has not taken into consideration of the additional shares from private placement 64.2 million shares & special issues 141.25 million shares for fund needed.
- The news came out on Star dated 20 Oct 2016 when the deal was announced with expectation to have 6 mil cu meter timber in total but now FY 18 alone has 9.3 mil cu meter timber?? (Furthermore, WTK only log 594k cu meter timber in FY2016. Wow…15 times of WTK in one year, really??)
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over a period of 5 years - from private placement, rights issue and share consolidation, shareholders have been taken for a very rough ride and landed with bruises everywhere. Priceworth is never worth the price.
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