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There used to be a saying that there are no guaranteed return or guaranteed win in the stock market. However, that is not true. Once in a while, some great opportunities would arise and those who able to catch it soars, those who don’t; misses it.


Today, I’m going to share with you a almost risk-free play from this company. With the recent right issue of ICULS of the company, investors are prone to make tons of money from it!


First of all, this company is amongst the most solid companies in Bursa Malaysia with great profitability and low PE Ratio. The name of this company might be known by a few, but those who does had surely profited from it, and this company would be AGESON BERHAD (KLSE:AGES).


Recently, AGES had proposed a rights issue of ICULS in order to solidify the financials of the company. But before we start and share with you how easy could you earn from this proposal, what exactly is ICULS?


Irredeemable convertible unsecured loan stocks, or better known as ICULS is a type of financial instrument which allows the company to raise immediate capital but without any immediate dilution. It is much better than a common rights issue of common shares.


The nature of loan stocks gives its holders the right to “collect the loan” from the company. However, ICULS just made it 10 times better. Instead of the company paying cash, you would get the shares of the company at a deep discount. For example, based on the indicative conversion price of the ICULS of 11.0 cents, the current market price of AGES which stands at 13.0 cents signals a discount of 2.0 cents, or equivalent to approximately 18% discount!


As for the costs for the this ICULS, it would be just merely 1.0 cents. Which mean for existing shareholder to subscribe to ICULS, the costs would be additional 1.0 cents per ICULS. What’s more – each one shares that you are holding are entitled to 6 ICULS!


For example:


Jasmine held 100,000 shares in AGES at 28th February 2021. Based on the indicative ICULS entitlement count of 6 ICULS per 1 existing common share, Jasmine would be entitled to 600,000 ICULS at 1.0 cents each. The total costs of the subscription on ICULS would be (600,000 * 0.01) = MYR 6,000.00


Hence, at the end of the day Jasmine would be holding 100,000 shares of AGES common share and 600,000 ICULS of AGES.


Do note that AGES’s stock price had been maintained above 12.0 cents since September 2020. And the costs for AGES’s ICULS subscription and conversion, is also 12.0 cents (1.0 cents subscription of ICULS + 11.0 cents of indicative conversion price).


This would mean your chance of losing money to subscribe on the ICULS, is close to 0.


However, any 1.0 cents upside in AGES’s common share would give you substantial return on the ICULS!


Assuming AGES is trading at 13.0 cents, the ICULS would double to 2.0 cents (13.0 cents – 11.0 cents indicative conversion price = 2.0 cents intrinsic value of the ICULS)


Assuming AGES is trading at 14.0 cents, the ICULS would triple to 3.0 cents (14.0 cents – 11.0 cents indicative conversion price = 4.0 cents intrinsic value of the ICULS)


Assuming AGES is trading at 15.0 cents, the ICULS would quadruple to 4.0 cents (15.0 cents – 11.0 cents indicative conversion price = 4.0 cents intrinsic value of the ICULS)


In short, every 1.0 cent increase in AGES, you would reap another 100% profit from subscribing in ICULS!




The figure above shows the price movement of AGES-PA, which is the same opportunity that investors had leveraged on prior to the issuance of ICULS. AGES-PA had reached the peak of 6.5 cents, which gives the early investor of AGES-PA a whopping 650% return! And even now, AGES-PA is still trading at 3.0 cents, which indicates a 300% return!


If you are keen to reap a minimum profit of 100% profit on this counter, there are several things that you must do:


  1. Buy and hold AGES until the ex-date of the ICULS. Once investors realized the potential of ICULS, they would rush it to buy AGES and hold it.
  2. You must be shareholder of AGES prior to the actual ex-date of rights issue of ICULS to be entitled for the rights.
  3. If you attempt to purchase the rights in open market, the price is inflated (I.e. from 0.5 cents to 2.0 – 3.0 cents), which increases your costs of investment and reduces the ROI from this saga.
  4. Upon invested in AGES, you must subscribe for the ICULS and attempt to oversubscribe it. This is the most important part where tons of investors miss out. In the example for Jasmine, she is entitled for 600,000 ICULS. However, you could apply for double, or even triple the ICULS if you wish to!


However, one must note that the company prioritise to allocate the excess ICULS (from newbie investors who knows nothing about ICULS) to shareholders who have a larger shareholding; to their excess subscription count on ICULS and finally, to those who purchase the rights from open market.


This would mean that if you are shareholder and a big one, chances are you would receive the excess shares more easily than small investors. The bigger your shareholding, the higher your chances are. Next, if you do not hold AGES now (which I do not see why, given the solid fundamentals of AGES), the amount of ICULS you attempt to apply for excess plays the key role. The higher your application count in numbers of ICULS, the higher your chance of getting it.


I foresee on Monday, AGES’s price would be chased to a minimum of 16.0 or 17.0 cents. If you get it below 15.0 cents, consider yourself lucky!


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