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Yes, you heard the title of the article right.

The company has declared one (1) Free warrant for Every Two (2) Existing Toyoink Shares Berhad Held. But first, 

Lets look at the core fundamentals of this company.

1) Toyoink Looks to achieve a better FY2019 Performance 

Overall, the business has already gotten rid of loss making segments and is looking to be profitable this Financial Year.


Look at the earnings turnaround

Revenue and Net Profit at all time High. 
2) Dividend Declared and High NTA.
NTA of this stock stands at RM 1.13 which is relatively high compared to the closing price of RM 0.715. This means that this stock has high potential upside to trade at its fair value. The company also declared a 1sen dividend to be ex on 21/09/2018. Fundamentally, this stock is strong as it is generating earnings from its core businesses as well as it has mega projects in the pipeline. The future is looking bright for Toyoink.
3) Mega Prospects Initiated 

Apparently, this Powerplant project is expected to generate $800-900 MILLION USD per Annum, for 25 years as reported by Theedge. That will total up to a high of a whopping $22.5 BILLION USD if they mean what they say.

(Source :Theedgemarkets)

The company has declared one (1) Free warrant for Every Two (2) Existing Toyoink Shares Berhad Held.The exercise price of these warrants are fixed at RM 1.50. Assuming full exercise of the warrants at the exercise price of RM1.50 per warrant, the company could potentially raise a maximum gross proceeds of RM80.25 million.
Why the high Exercise Price of RM 1.50 for warrants?? There could only be three possible theories.

A) The company wants to utilize its proceeds for future Capex or working capital.
B) The company forsees its share price to be fairly valued above RM 1.50 in time to come.
C) The company does not want to allow outsiders to takeover the company as a major investor may control more stake than the largest shareholder of this company due to the tight liquidity of this company. 
5) Look at the Veteran Investors inside this stock. Maybe they see true
value in this gem? Who Knows. Time will only tell.

Thank you for reading. 

Best Regards,

Investing in stocks is a great tool for capital gains. However, all investments come with risk. Therefore, all investment decisions should be borne at your own cost and I will not be held liable for any investment decisions made. Do not buy Equities if you do not know the risk !! Thank you.


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