SYMPHNY (0016) - Simply Symphonic
Back then, Symphony shares that is listed in the KLSE had not seen any interest from the public due to it's normal usual day to day business operation which will be unlikely to see any surprise that would be rewarding for the shareholder. In fact, Symphony had been running between the red and black line. However, everything in Symphony took a huge change when CIMB arranged Ranhill Energy and Resources Berhad to be listed in the KLSE through a RTO process.
Let's have a look at the latest price chart of Symphony.
Symphony House Berhad (Symphny -0016) had been trading at the range of 12 to 13 cents before the news of RTO came into picture. Prior to that, Symphony saw it's saw leaped to a high of RM 0.315 in April 2014, where a few occasion had saw more than 150 million of shares change hand. However, the share price had took a consolidation effect which had saw a good consolidation price at the range of RM 0.22.
Symphony got shake up and broke down lower when the global equity market took a plunge over the worries of a sharp plunge in the oil price from October to December 2014, putting Symphony trading at an incredible attractive level at the range of RM 0.15 now.
As time draw closer towards the completion of the RTO process, we will expect to see a build up in the volume, and Symphony will be easily challenging back into the previous support line at RM 0.22, while a higher resistant might be seen at RM 0.30.
Symphony - Transforming to Ranhill
Symphony had been disposing off it's business assets prior to the arrangement for the Ranhill Energy and Resources Berhad RTO process. To date, Symphony had sold Symphony BPO Solutions Sdn Bhd, Xen Solutions Sdn Bhd, Symphony Xen Solutions Pte Ltd and BCS Information System Pte Ltd. Symphony. Currently, Symphony is sitting on a cash pile of RM 40 million, with zero debts on it's belt, translated to a net cash of RM 40million. Symphony last business asset - Symphony HRS, which is looking to be sold for around RM 25 million will possibly put Symphony with a total cash pile of RM 65 million, which could be easily be translated into a cash of 9.8 cents per share
Ranhill
Energy and Resources Berhad (RERB) which will be looking to inject
approximately RM 800 million worth of water and power asset into
Symphony under the exercise will provide the current minority
shareholder with an opportunity to benefit from businesses with a more
robust prospect. Currently, RERB asset will see it's valuable water
concession in Johor and 2 power plant - Powertron which is operating in a
full operating capacity. RERB also had exposure in Thailand and China
in it's water processing arm. Currently, it's China water processing
asset is delivering 270 million liters a day (MLD), and will be looking
to boost it's figure to 1000 MLD in the end of 2015.Under the transformation process, Symphony shares of par value RM 0.10 will be merge in 10 to 1 share, hence par value will become RM 1.00, however, outstanding shares will be shrink into 66 million shares. We believe that there will be more corporate exercise that will increase the liquidity of the shares in order to prepare for a RM 800 million asset injection.
The new RERB could be potentially seeing approximately 533.4 million shares at RM 1.50 to reflect a market capitalization of RM 800 million for the value of it's assets injection.
With this inline, there is a possibility of a special dividend from the cash pile of RM 65million in order to avoid the cash dilution to the new shareholder upon their placement. Currently, the cash in hand is translating towards 6 cents a share. (approx RM 40m / 660m shares), which is 40% of the current share price of RM 0.15. Should Symphony HRS be sold, the cash might rise to RM 65 million, which will translate to 65% of the share price at RM 0.15 is net cash in hand.
Symphony will be a very interesting share to be monitor in the coming days due to
- RTO process to Ranhill Energy & Resources Berhad
- Net cash position of RM 40m, and a possibly RM 65million after the sale of Symphony HRS
- Possible special dividend payout to shareholder
- Current cash value being 40% of the share price at RM 0.15
- Huge accumulation at the range of RM 0.20 and above
Transform along? You decide
Bone's short term TP: RM 0.22
Cheers and have a nice day
Regards,
Bone
http://bonescythe.blogspot.com/
