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I love good companies and business model, especially those with businesses in growth trajectory. But is heart-wrenching to see companies that doesn’t perform well despite various promises and growth stories been made since IPO. Not to mention a lot of hard-earned money been invested by IPO investors during IPO and rights issue exercise back in 2017.
Many reasons why companies fails, amongst others, poor market research on their markets, products or solutions, inadequate financial management, external factors i.e. industry crashes, changes in regulations, poor leadership and lack of planning and execution. My biggest worry on Bioalpha is their inadequate financial management.
As we know during this pandemic, pharmaceutical and nutraceutical sectors are doing well as consumers are constantly looking for products that can boost their immune system. There is a huge pent-up demand for these products. However, Bioalpha needs to resolve their inadequate financial management, intervention with their cost structure and focusing on products that can scale efficiently. You can never have an unlimited issuance of share capital to raise fund whenever  you need money, as it will erode its shareholders’ value. It is a fiduciary duty for the Board of Directors to create value for its shareholders in terms of recurrent dividend and growth in capital but so far, is quite depressing. Dividend payments were negligible and not recurring and the IPO price slumped from 20 cents to 12.5 cents now. And every year, erosion on shareholders' value due to non-stop issuance of new share capital.
Since IPO, the MD has been actively trimming his shareholding in the Company from 122,103,560 shares back in 2015 (see the table tabulated below) to 93,000,000 shares despite that 50 million shares been exercised pursuant to the ESOS on 22 April 2020. Even their CFO and Executive Director, Ms Goh sold her entire shareholding of 840,000 from 6 March 2020 to 29 May 2020. These were not signals that minority shareholders want but merely show lack of supports by the promoter and senior key management of the Company
Substantial shareholders
     
 
22/4/2015
16/7/2020
 
No. of shares
% held
No. of shares
% held
William Hon
122,103,560
26.35
93,000,000
8.96%
PNB
105,387,077
22.74
120,855,104
11.65%
MTDC
81,402,920
17.57
107,203,892
10.33%
         
No. of issued shares
463,413,114
 
1,041,168,732
 
Treasury shares
   
3,761,800
 
In summary, risk comes from not knowing what the Company is doing. Hope for the coming AGM, the Company will enlighten its shareholders with all the answer on the queries raised. Happy weekend !

https://klse.i3investor.com/blogs/TimelessInvestment/2020-07-18-story-h1510607269-Bioalpha_Holdings_Critical_Questions_for_coming_AGM_17_August_2020_2nd_.jsp
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