My last post on ES Ceramics Technology Bhd (0100) – Potential LIMIT UP STOCK (dated 14 Jul 2020) which some readers commented too much imagination or unrealistic target price. Imagination might come true. ESceramic has hit limit up for 2 consecutive days. I have sold off some shares to realise my profit and swap to XDL as I believe this counter will become another ESceramic.
WHY XDL??? XDL is an investment holding company which engaged in the business of designing, manufacturing, and marketing of sports shoes as well as designing and marketing of sports apparel, accessories, and equipment. During the Covid-19 pandemic, XDL has venture into “Stylish, Reusable and Washable Protective Masks” and supplies PPE products. Reader may refer to the announcement made in Bursa Malaysia website for more details.
With recent limit up of all gloves, PPE and masks related counter (which have increase more than 100% and more over the last 2 weeks like Notion, ESCeramic, HLT, Carepls, K1 and MQTech), I strongly believe this counter has a huge potential to go up to RM0.30 and more (which is 400% based on closing price of RM0.065 as at 4 Aug 2020). The cash and bank balances as at 31 Mar 2020 was RMB867,259,000 with minimal borrowing of RMB12,400,000. That mean XDL at net cash position of RMB854,859,000 or RM512.9mil (RM0.28 per share) as compare to current market value of RM117mil.
Why don’t the Company distribute the cash and bank balance as dividend to shareholders? From my understanding from a friend who currently worked in Parkson, any company located in China need to seek approval from the China Government to remit the fund overseas and the process is time consuming and difficult. You may refer to financial statements of Parkson which the cash and bank balances are high and majority from China subsidiaries.
I will continue to sell off my remaining shares in ESCeramic at the right price and change to XDL.
Above sharing is not to asking you to buy, buy or sell depends on your own judgement and due diligence.