Tuesday, 22 December 2015

PRG Holdings (2) - The Journey Continues

Author: Icon8888   |   Publish date: Tue, 22 Dec 2015, 01:28 PM 


1. Introduction

I first wrote about PRG on 27 March 2015 when it was trading at 66 sen.

http://klse.i3investor.com/blogs/icon8888/73391.jsp

The article generated a lot of interest among forum members.

Without fail, high profile article like that will attract scathing attack from certain parties. Optimus Prime launched a relentless campaign to attack me. The following are some of the samples.



Despite my numerous attempts to try to explain that it is supposed to be a 2016 play (PRG has very clearly stated in its Circular to Shareholders that Picasso Residence will only start contributing by end 2015), the attack went on and on for many months. It was very disturbing.


2. Subsequent Developments

Time flies. We are now in the month of December. It is time to take stock and provide some updates to forum members who bought PRG and still holding them.

(a) PRG Is now trading at 83 sen. Contrary to Optimus' prediction, it has not gone Holland yet.



(b) The group reported reasonable profit. Nothing to shout about, but they managed to keep it in the black.

Quarter Result:
F.Y.QuarterRevenue ('000)Profit before Tax ('000)Profit Attb. to SH ('000)EPS (Cent)
2015-12-312015-09-3030,0131,5641,6381.13
2015-12-312015-06-3032,4501,6751,5171.05
2015-12-312015-03-3126,821-480-361-0.25
2014-12-312014-12-3130,0251,9282,1231.47

I am not disappointed. I have always known that 2015 will not be superb. 


(c) As at 30 September 2015, the group has RM21.8 mil cash, RM76.9 mil borrowings and RM113.3 mil net assets. As such, net gearing is 0.49 times. 





(d) On 1 December 2015, Datuk Seri Yeoh Soo Ann, somebody I have very high regard (due to his track record), and one of the major reason I bought PRG, had stepped down from his post of Executive Director. He sold all his ordinary shares, but keeps 7.9 mil Warrants. 

Managing Director Cheah Eng Chuan keeps his post. He holds 5.4% equity interest.
Executive Director Dato Lua Choon Hann increased his shareholding from 8% to 11% through open market purchases.
Executive Director Wee Cheng Kwan also increased his shareholding.  
A new substantial shareholder Ng Yan Cheng surfaced, holding 9.4% equity interest. 
It is a long list, I don't want to spend an entire day tracking them down one by one. 

Overall, it looked like core management team remained more or less intact. Yeoh Soo Ann's selling down resulted in shuffling of equiy holding. But I don't think it is a boardroom tussle or crisis situation. Looked more to me like Yeoh acknowledging that his expertise might not be sufficient to lead the group to a new height, and he doesn't mind letting his friends / colleuages to take over from him.         


(e) As we all know, PRG was originally involved in manufacturing of furniture webbing. It subsequently ventured into property development.

On 9 November 2015, the Company announced that it would like to venture into construction industry. The Company will be seeking shareholders' approval for the proposed diversification. EGM will be held at Hotel Armada, PJ, Selangor at 2 pm, Tuesday, 12 January 2016.

Please refer to the Circular if you are interested to find out more.
http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=172880&name=EA_DS_ATTACHMENTS


(f) Since I published my article in March 2015, I have not been able to get any update on Picasso Residence. As we all know, the biggest issue for developers nowadays is not lack of demand, but difficulty in getting end financing for buyers. I am sure Picasso Residence faces the same set of problems.

Do I panic ? Absolutely no. I can't really justify to you why I am so calm. But Picasso Residence does have certain strong points. Its location is superb, it is being priced cheaper than other properties in the surrounding areas, etc etc. We will just have to be patient to let the Company sort things out (at one point, there were news of En Block Sale). 

You can't panic and jump off the building everytime your teacher didn't give you an "A".



3. Concluding Remark

I only have one thing to say - Optimus please don't attack me. 

Please......

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