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Courgette Chong
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Arbitrage Opportunity Abounds In Techbase Industries’ Rights Issue

IN THE ever-evolving landscape of the Malaysian corporate sector, Techbase Industries Bhd’s (formerly Prolexus Bhd) recent rights issue could present an intriguing arbitrage opportunity for astute investors.

Delving into the details of this corporate exercise and its implications, it is clear that this is more than just a routine capital-raising endeavour.

Techbase has unveiled a renounceable rights issue of up to RM102.58 mil nominal value of 2.05 billion five-year 0.10% irredeemable convertible unsecured loan stocks (ICULS) at 100% of its nominal value of 5 sen each.

This rights issue is on the basis of five (5) ICULS for every one (1) existing ordinary share of Techbase held by entitled shareholders as at 5pm on March 4, 2024.

Arbitrage opportunity

As of Friday’s (March 8) close, Techbase’s share price stood at 25 sen which is its post-ex-rights’ price.

For investors holding the mother shares, the ICULS comes at a cost of 5 sen. Given the conversion price of 15 sen for the ICULS, this presents a significant arbitrage opportunity where the cost of converting to mother share is just 20 sen.

Investors can potentially gain from the difference between the current share price and the conversion price, making this an attractive proposition for those looking to capitalize on short-term gains.

Techbase has a diversified business portfolio with a proven track record in the apparel industry. The company has been exploring various strategic initiatives to enhance its operational efficiency and market positioning.

In the past year, Techbase had attempted to organise an extraordinary general meeting (EGM) concerning property developer South Malaysia Industries Bhd (SMI) but was not successful.

However, with SMI’s AGM (annual general meeting) scheduled for March 2024, the corporate scene in Malaysia is abuzz with speculation about what might transpire and how it could impact the dynamics between these two entities.

The proceeds from Techbase’s rights issue are earmarked for several strategic initiatives, including the installation of rooftop solar photovoltaic systems, bolstering working capital, repaying bank borrowings and exploring acquisitions or investments in complementary businesses.

These initiatives are expected to create value for the group by enhancing operational efficiency, reducing costs and paving the way for sustainable growth.

The upcoming AGM of SMI and Techbase’s potential involvement in its board could have significant implications for the corporate landscape in Malaysia.

It remains to be seen how this will unfold but it is clear that Techbase is positioning itself as a key player in the apparel industry with strategic moves that could re-define its future trajectory and impact the broader corporate scene.

In conclusion, Techbase’s rights issue presents a unique arbitrage opportunity for investors, backed by strategic initiatives that aim to create long-term value for the company.

As the corporate saga between Techbase and SMI continues to unfold, it will be interesting to observe how it shapes the future of these companies and the Malaysian corporate sector at large.

At 3.50pm, Techbase was up 0.5 sen or 2% to 25.5 sen with 10.46 million shares traded, thus valuing the company at RM71 mil.

https://focusmalaysia.my/arbitrage-opportunity-abounds-in-techbase-industries-rights-issue/
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VL
indian lapsap so called guru buy call faster run
1 Like · 3 days · translate
Aubree Yap
Haha. Who's that Indian guru? The guy who can speak Mandarin one?
Like · 3 days · translate
Marcus Chan
4 Like · Reply
I think It's a solid investment, seriously. Big discount to net assets, loads of cash in hand, and potential value from their SMI subsidiary. Additionally, with a fat war chest post-rights issue and recent share price dips, it's the perfect moment to jump in and make some serious gains. Personal opinion only
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WH8786 N
Very good analysis, unfortunately the share prices tell it all .....
Like · 1 week · translate
Bowman Su
Its Q2 result was out. Revenue improved in terms of QoQ and YoY, whereas net loss was narrowed. Seems like a good opportunity as its price is almost at the bottom
Like · 5 days · translate
David Chua
7 Like · Reply
Correct me if I'm wrong
1. Each ICULS costs RM0.05
2. Capital remains RM0.20 per share, regardless of the conversion method
3. Sell at the theoretical ex-rights price of RM0.235 to RM0.240 results in a profit
4. Even if the share price drops to RM0.220 after theoretical ex-rights price, you still make at least a 10% gain
5. For each Techbase share you hold, you can subscribe for 5 ICULS
6. In the end there's a potential 50% profit based on the conservative ex-right price estimated
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Chong Kim Huat
Subscribe and hold above 0.25-0.30 lah
Like · 2 weeks · translate
Bowman Su
Price pullbacks a bit. Wait until it reaches 30 cents and then convert ..
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Eric Fong
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Why others income so less compare previous year? Anyone know what is their other income?
And why admin expenses suddently hike so high?
Coleman
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Game is on ? Tp around 0.25-0.30
James Talk
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TECHBASE are still standing strong above 0.20, no problem for me here
James Talk
1 Like · Reply
Our stock screener noted significant price momentum for Techbase Industries for the past 5 trading days. Both MFI and Accumulation Index showed positive indication of strong influx of buyers’ interest, supported by an upward trending EMA9. Over the immediate short term, we see a potential challenge to RM0.30 as the immediate resistance, while the support level remains at RM0.24.

For arbitrage traders, the subscription into the rights issue of Techbase is encouraged as Techbase is showing an uptrend, and with a conversion price of RM0.20 (surrendering 1 ICULS + RM0.15). Should Techbase hit RM0.30 (TP), the value of ICULS would be RM0.15, rendering a potential upside of 200%.

SP: RM0.24, RM0.20

TP: RM0.30
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James Talk
Big volume coming in lately, slowly moving towards to 0.30 while collect around 0.20-0.25
1 Like · 1 week · translate
NXOPE
2 Like · Reply
请问ICULS是什么来的 一定要认购吗 会影响母股价格吗
Aubree Yap
@Rainmaker KLSE. 母股才能认购,也就是Ordinary share
https://www.klsescreener.com/v2/announcements/view/6606681
1 Like · 2 weeks · translate
Rainmaker KLSE
哎呀。。可惜咯。。谢谢大家的解答!
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Coleman
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Buy and subscribe ICULS, will hit 0.30 - 0.35
Coleman
15 + 5 = 20 captial, now TECHBASE trading at 0.25 which is 25% upside. In near future if price = 0.30 then 50% return
Like · 2 weeks · translate
Poh Huat Ang
1 Like · Reply
Free money counter???
Poh Huat Ang
9点交易密室/股权异动

Techbase Industries 附加股带来套利良机?

在变化莫测的股海中,要找到适当的投资良机并非易事。

而在近期,Techbase Industries的附加股活动,可能为精明的投资者们提供了一个极具吸引力的套利机会。

前身为宝翔(Prolexus)的Techbase Industries宣布进行一项可放弃附加股计划,发行20亿5156万7055股5年期0.10%的不可赎回可转换无担保债券股(ICULS),每股面值5仙,总值1亿257万8353令吉。截至2024年3约4日下午5点的合格股东,每持有1股Techbase Industries普通股即可认购5股ICULS。

截稿时,Techbase Industries的股价企于25仙,这是除权后的价格。对于持有母股的投资者而言,ICULS的成本为5仙,而ICULS的转换价为15仙,代表因为 转换成母股的总成本仅为20仙。

和当前股价相比,投资者可从之间的差价中获利,是一个重要的套利空间。

Techbase旗下业务组合多样化,且深扎服装业多年,已有坚实的良好记录作为支撑。该公司一直探索各种战略举措,积极提高其运营效率和强化市场地位。去年,Techbase尝试举办一场关于南马工业(South Malaysia Industries Berhad,简称SMI)的股东特别大会(EGM),最终未能成功。不过,市场如今正聚焦SMI即将在2024年3月召开的股东常年大会(AGM),紧密关注接下来的事态发展,以及两家公司之间是否会有新的动作。

通过此次附加股所筹得的资金,Techbase将会用于所部署的数项战略举措,包括安装屋顶太阳能光伏系统丶强化运营资本丶偿还银行贷款,以及探索收购或投资能带来互补效益的业务。这些举措料能助提高运营效率丶降低成本,助该公司创造更大的价值,确保未来取得更可持续的成长。

SMI即将召开的股东大会,以及Techbase可能加入其董事部,可能会在市场掀起一阵波澜。虽然这一切还有待观察,但我们可见到最明确的一点是,Techbase坚定成为行业中重要的业者,所布局的战略举措将会重新定义其未来发展历程,并在广泛的企业界发挥更大的影响力。

统而言之,Techbase的附加股为投资者们带来一个独特的套利机会,而且这还有其旨在创造长期价值的战略举措作为支撑,必能提振市场对该股的购兴。Techbase和SMI这两家企业的传奇故事未完待续,值得市场继续观察这两家公司以及整个大马企业界的未来如何发展下去
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