MESB - THIS CO MIGHT RECEIVE A REVISED PRIVATIZATION OFFER
AS THE CURRENT OFFER IS WAY BELOW NTA !!!
Hello to all readers out there. In recent weeks, I saw that apparel related counters had moved quite strongly, e.g. PRLEXUS, PCCS, JERASIA to name a few.
Having said the above, the stock which I'd like to talk about today is MESB BERHAD (MESB - Stock Code 7234, Main Market, Consumer Products & Svcs - Personal Goods)
BASIC INFORMATION ABOUT MESB
MESB was founded in 1995, with core business in:
i) Retail - Trading in quality leatherware products
Some brands that they have exclusive license to sell in Malaysia is Alain Delon and Pierre Cardin. They also have in house brands, namely Giossardi and Giamax.
Market Capitalization : RM 45.09 million
Shares Float : 106.10 million
Website : http://mesbbhd.com/
他们拥有在马来西亚独家销售的某些品牌是Alain Delon和Pierre Cardin。他们还拥有内部品牌，即Giossardi和Giamax
市值：RM 4,509 million
1. PRIVATIZATION OFFER FROM WONG SAK KUAN & YAU MING
TECK (DIRECTORS OF LOTUS KFM BERHAD) ON 12 OCT 2020 !!!
MESB rose to as high as 55c upon receiving take over offer by LOTUS KFM Directors - Wong Sak Kuan & Yau Ming Teck who jointly hold 44.14% stake in MESB after recently acquiring from existing major shareholders.
Looking at the NTA of 76c of this stock, I highly doubt that the take over offer will go thru.
Therefore, the offerors might need to raise their takeover offer in order to privatize this company.
1.WONG SAK KUAN & YAU MING TECK（莲花KFM BERHAD董事）在2020年10月12
最近从现有大股东手中收购后，LOTUS KFM的董事-Wong Sak Kuan＆Yau Ming Teck接手了MESB的股份后，MESB的股价升至 RM 0.55。
2. NTA 76c, CASH IN THE BANK RM 32.3 MIL (72% OF MARKET
Refer below the latest QR summary of MESB. The company made losses during most recent quarter due to impairment of goodwill and assets caused by COVID19 pandemic. I think this is a normal occurance in many companies listed on BSKL as the pandemic has affected their business.
However, we see that the latest NTA stood at 76c. As of latest close of 42.5c, the price is still at 44% discount to its NTA. Therefore, any takeover offer which is below the NTA, would highly likely be rejected by the shareholders of MESB.
2. NTA 0.76c，RM 32.3 MILLION 现金（占市72％ MARKET CAP）!!!
Below is the Asset Versus Liability sheet as of latest QR. A few key points to note:
- Total Asset stood at RM 132.7 mil (NTA 76c)
- Total Liability stood at RM 63.5 mil
- Assets Exceed Liabilities by RM 69.2 million (Asset surplus company)
- Total Cash position is RM 32.3 mil (cash per share of 30.4c, which is 72% of market cap)
The total cash position had improved from the previous year of RM 21.8 mil. Therefore, I believe the company is more than capable to weather and survive the COVID19 pandemic.
-总资产达RM132.7 mil（NTA 76c）
-总负债达RM 63.5 mil
-资产超过负债RM 69.2 million（资产盈余公司）
-总现金头寸为RM 32.3 mil（每股现金30.4c，占市值的72％） 总现金状况比前一年的2180万令吉有所改善。因此，我相信该公司有足够的能力抵御COVID19大流行
3. TECHNICAL ANALYSIS - BREAKOUT OF 3 YEAR DOWNTREND,
WITH SIGNIFICANT VOLUMES ENTERING !!!
Refer below the basic price and volume chart with key EMAs for MESB weekly chart :
A few observations on the weekly chart:
i. Refer Circle 1, recently MESB had broken thru the 3 years downtrend line, with significant volumes entering. At the same time, it had broken above the long term EMAs of EMA200 and EMA365. This indicates a significant bullish activity in this counter
ii. Refer Circle 2, the significant volumes are continuously entering this stock on a weekly basis after the breakout, indicating that interest in this stock is sustained
iii. Should buyers be interested in this stock, we might see an upmove back to test the R1 resistance around 50-52c, then R2 resistance at 66-69c, before breaking upwards towards R3 of 87-90c
RM0.50-RM 0.52附近，然后是R2阻力在RM 0.66-RM 0.69，然后向上突破至R3的RM0.87-RM 0.90
Considering all the above, I opine that current price for MESB is attractive due to below:
i) LOTUS KFM Directors takeover offer is way below NTA, and a revised offer is necessary if they were to privatize MESB
ii) Total NTA stood at 76c, and total cash per share stood at 30.4c per share of 72% of market cap
iii) Chart showing breakout of 3 year downtrend and all key EMAs, with significant volumes continuously entering this stock
LET’S SEE HOW THE SHARE PRICE MOVEMENT IN THE NEAR FUTURE FORBEARING ANY GOOD CORPORATE NEWS.
Disclaimer : The above opinion is never intended to be a BUY CALL whatsoever. I am sharing my observations ONLY based on fundamental; past history; current trading pattern; charts etc. Please make your own informed decision before buying this share or whatever share for that matter.