chaibu wrote:Ha...we meet again. Never interest in the company but interested in their business? Never mind, look closely and share with us what you see. Can?
Anyway my interest is past tense now academic interest only.
Had another look at the announcement before coming here.
1) The 1c bonus dividend is to reward shareholders
2) Shareholders can choose to convert dividend to shares or keep the money.
Flushed with cash especially after selling 50% of Ecowise Solutions to JV partner Holcim for US$3.8m on top of net cash of > $7m in the books it is good to be shareholder-friendly in distributing excess cash to shareholders (including the major shareholders).
One thing bugs me though is why do it now in the middle of nowhere i.e. between the half-year and full- year reports. Dare we entertain the thought of a final dividend come December? Playing corporate games?
The other bug is why the rights issue? Ultimately with the warrants included there will be something like 600 million shares. This is too big a number for me to crunch. Can we borrow your microscope and dissect the numbers to a single EPS and hope the decimal is in the right place like in the case of Qian Hu.
Enjoy what's left of your weekend and take care.
Hi chaibu,
My interest is also academic only
A few points to mention:
1. I feel that ecowise is too generous in issuing their own 'printed currencies' by giving out new shares wantonly. It's sort of blackmailing shareholders by giving them dividends and at the same time issuing rights. If shareholders choose not to subscribe to rights, their holdings will be diluted. I find that disturbing, especially when there are no more clarifications as to why there are issuing new shares. I also find it weird that they choose to do it between the half year and full year reports. They could have done it in their 1H results released on 12th June, 2008.
2. Take a look at the potential dilution down the road:
1H08 net profits (including extraordinary gains) is $6,541,000.
1H08 net profits (excluding extraordinary gains) is $1,438,000 (i subtracted off $5,103,000) from their disposal of 50% of subsidiary.
Annualized full year 2008 profit without extraordinary gains = $2,876,000 (1.438k x 2 = 2.876k)
Based on my simple forecast,
Annualized full year 2008 profit (includes gains) = $7,979,000 (2.876k + 5.103k = 7.979k)Share capital: 376,067,246
Outstanding warrants: 52,263,116
Potential rights issue: 249,975,000
Assume 100% subscription for rights, total shares excluding warrants = 626,042,246My forecast for EPS fullyear 2008 = 1.27 cts (7.979k / 626042.246 = 1.27 cts)
For comparison
FY07 full year net profit = $4,861,000
Diluted EPS FY07 (based on 85,798,288 shares) = 5.67 cts
3. The underlying business is deteriorating, unless new engines of growth are injected. Carbon credit (nowhere is it mentioned in the results, interestingly as you pointed out) could be THAT thing ecowise is rooting for. How did you get the figure of 450k annual income?