Our website is made possible by displaying non-intrusive online advertisements to our visitors.
Please consider supporting us by disabling or pausing your ad blocker.
liquidity is double edged sword, there need to be solid reason for the recent buyers to sell lower, unless those buyers are also margin accounts. then never ending margincalls until at least until QR solidify the fundamental status, or worst case the otherwise
So many UMA on PLCs in recent days ie. PTrans, MMAG, NexG, PJBumi. Looks like more on other PLCs with volatile (plunging) share prices when not fundamentally supported by valuations (PE, EPS, DY, NTA etc.)
actually if it is actually purely margin calls problem on these counters, then it is actually good chance to capture the ones with actual good fundamental, which in this case ptrans imo. those other dont seem to have good fundamental, but their shares prices also plunging somehow convinces me that margin calls can actually cause share prices to drasticly drops without any other valid reasons. which convinced me to reenter ptrans for another round
When most other stocks with 0% or minimal dividend yields, meagre profit and exceptionally high PE but market capitalisations in billions, their fundamentals cannot possibly be good. Highly speculative based on “irrational exuberance” trading.
avoid ptrans if you dont have it, daniel. if you have it, you should at least read the qr/ar and you will see some risks in there. just as you mentioned yesterday high pe high market cap, hence, its cleaning up time.
This is a rubbish company. Fixed asset RM1.3b but annual revenue only RM200m.
This is like I buy Myvi RM50k to do grab. But my grab gross income only RM8k or RM700 per month.
Maybe their fixed asset is inflated or not real.
I was wondering what causes the oversupply situation to the extend of triggering margin calls. The boss has been selling for some time and began selling aggressively over the last 2 months. Flipped through 2024 annual report and few risks: (1) ~70% of the top30 shareholdings are pledged shares (2) 95mil of the 180mil annual revenue came from 4 major customers and 3 major customers owed 75% of the total trade receivables
(3) high debt as Daniel mentioned and dividend funded by debt / sukuk (4) inflated pbt and cash flow due to high capitalization of finance costs. These are the few risks that should be taken into consideration; earnings quality risk, financing risk, capitalization risk. I am not familiar with ptrans but saw these from the 2024 annual report. Not sure whether it's the same rolling in the deep style for previous years.
Excellent analytical review, Cheng. Similar situation in numerous PLCs at present. Thorough review of Annual Report & Quarterly Reporting on all the financial ratios can give indicative “red flags” especially on ballooning level of borrowings and weakening Balance Sheet.
financing to build more terminals, not right? no pp no right issue, so financing is the only way, many other high financing company can support high valuation. i dont think financing is the true cause behind the LD because new terminal have not even operating to proves whether the financing is a good or bad decision
must by simply margin calls or something else behind the fundamental, not just high financing. high financing can be future risks if new terminals dont generate income as expected but certainly not current worry that causes the directors to sell their shares especially considering that financing is thier own decision anyway
what i am saying is that not that financing has no risk to the company especially in long term. but that dont justifiy drastically throw away the share prices. fundamental might turn worse due to the financing problem, for example, earning cannot cover up future finance cost. if that the case, this can be reflected in the share price by declining accordingly in the future depends how worse the situation can be.
to be honest, the true concern I have with this company now is whether their previous earning ability is genuine, no fake accouting behind. which might be the true reason of the LD if proven otherwise. other than that, not much as nothing can justify even if there is one time impairment loss for example in the next qr
only auditors and BODs will be able to verify that, steve. this is because they have access to the source of revenue/invoices which public will not have. the most retailers can do is to take note of what's visible from the financial reports - the financing risk, earnings quality risk and capitalization risk.
not possible to verify that its fishy bcos of no visibility to the source of revenue/invoices, cheik kooi tan. What is visible - ptrans is "cash hungry" by means of debt/sukuk financing at the back of earnings quality and capitalization risks. Given the visible risks, it makes sense for Mr. Market to price it in.
while it is sad that if directors need to sell due to their personal financing problem, shorties are despicable for trying to take advantage out of this situation
nothing much you can do for things that are out of your controls. the only thing within your controls is to be aware of the visible risks from the financial report if you have ptrans. all is well if you dont have it. You can wait for clarity or at least consider these risks into your margins of safety.
There should be some clarity or news developments soon as recent days share price plunge definitely not in sync with their last few quarterly announced profit. In addition, no announcements on substantial shareholders selling or margin calls.
@daniel if it is actually not directors selling, then it must be panic selling or shorting, might not have to do with the company itself. but it can also be other internal guys selling. lets see how things unfold
As it is Closed Period, it is mandatory for prompt announcements on transactions by directors, employees or substantial shareholders. No such announcements to date this trading week when the share price plunge.
Short selling (~ 6 million shares) on the stock also minimal in relation to the trading volume based on daily Bursa statistics. We are only Ikan Bilis and better not to swim in “deep sea” !
@daniel how do you check the short position, and someone at i3 posted the total shareholders position updated with their total shares from time to time. do you know how to check that info as well?
When share price plunging, do not catch falling knives especially when it is already < 30 Sen ! Remember Sapura Energy (Vantris) & KNM ! Red Flag : High Debts.
boss and family (wife and brother) rushing to dispose and another substantial shareholder starting to dispose. And one of the response given to Bursa UMA's question with regards to Whether you are aware of any other possible explanation to account for the trading activity- The Board is not aware of any other possible explanation to account for the trading activity. :)
Lol, TN. The boss and his family's margin positions should be kaput aka underwater. Most likely will cease as substantial shareholders soon. Tan Chee Sing is Vincent Tan's bro and he is starting to sell too. Will be interesting to see whether he will liquidate all his shares too.
no idea. The boss has been selling for sometime and began selling aggressively for the last two months. Why is he rushing to sell and eventually triggering margin calls? ~70% of the top 30 shareholdings are pledged shares and when the boss started selling aggressively, it could have triggered margin calls for those in the top30 and the domino effect eventually hit his own margin calls. So, why is he rushing to sell in the beginning and could it be due to the overvaluation of the company due to the visible risks?
If tan chee sing's shareholding triggering margin calls, there should be another round volatility for the 67mil shares to be released to the market together with the boss's direct and indirect shareholding. Brokers for their margins account will be busy to recover the margins deficit.
Ironically, no local funds/institutions are interested in Ptrans. Fund managers would have detected the visible risks from the reports and there is no mos at current price.
Personally i dont think it was a margin call because the boss already trimmed more than half of his shareholding long before the limit down. Therefore he should be cash rich and able to meet the margin requirement if he wants to.
From my speculative point of view, the company maybe will lose the direct and "indirect" subsidies from the state authority in near future and the boss knew it. That explains why the boss rapidly cashed out in open market since early this years...
Good analysis. High debts coupled with earnings quality risks. Let’s see QR3 due out soon. Otherwise, GP% exceptionally high @ almost 50% and would have attracted quality institutional funds. Bulk of recent Private Placements of ~ 50% (RM18m) in QR Note B7 varied and allocated to General Working Capital !
GP% is exceptional high because of the subsidies. Think about it, if there is no guarantee of subsidies from the authority, which private company want to invest several hundreds of million of public infra to provide public services in a rural area? The risk is just too high to justify the rewards.
The usage of pp doesnt concern me. My only concern is can the company still able to secure the subsidies? iirc, the 3 years contract from the "A&P segment" is due for renewal soon...
Another reason for the inflated pbt and cash flow is the capitalization of the finance cost from sukuk. It makes the interest expense low. If I recalled correctly from the quick glance, total interest from sukuk in 2024 was approx 30mil+ and 17mil+was capitalized and hence 13mil+ was expensed :) nothing illegal as long as the project is "under construction". this is the capitalization risk as once it's completed, earnings will drop due to higher finance cost/expense.
I am not familiar with ptrans and the few visible risks (earnings, financing, capitalization) were from 2024 report and I am not sure about previous years. Mr. Market will have to price it in aka cleaning up time perhaps.
The sustainability of their profitability is very much depend on "rental of A&P spaces". This was the part where they reluctant to answer the details to my question in their online briefing during the mco period. The huge operating cash flow from this segment was real but then it just didnt make any biz sense. So my gut says there must be some grey area involved therefore the profitability is so unbelievable consistent every quarter until everyone thinks it is too good to be true...
Earnings quality risk :) 4 major customers contributed to 50%+ of the annual revenue, 3 major customers owed 75% of the total receivables, inflated pbt and cash flow due to capitalization of interest; negative cash flow in actual. I am not sure whether it is the same for previous years.
So, have to keep "in construction" status / constructing new project to keep capitalizing interesr, keep getting sukuk / other means financing, and continue rolling in the deep.
mygg is even worse. It is purely an accounting technique to capitalize almost all the expenses as development cost which imo it is actually a worthless intangible asset.
Guess what? if u reclassify the development cost as an expenses, the company was just barely profitable even lost money in last few years...