SERNKOU (7180) - A New Alignment
With the current economic headline focused on the ECB decision to inject
more than 1.1 trillion euros (usd 68 billion) into the financial system
through a buying of private and public securities amounting to as much
as 60 billion euros a month that will start in March 2015 and run until
September 2016. The stimulus which aim to spin more economic activities
within the European region from the threat of deflation will certainly
looking to have a spill over effect over Asia manufacturing country.
One of the rising industry that can be looked into will never be shy of the furniture industry, which had been picking up spot light since last year when the US QE3 started to pick up the economy and also the recent stronger USD against MYR had been adding another boost to the industry which had been traded in USD denomination.
Of the whole pack of listed furniture company in KLSE, Sernkou Resources Berhad would be an interesting take after the company had started to pick up recently, reflecting a continuous 4 quarter positive result.
Let's have a quick look at Sernkou
Sernkou had been trading in a resilient manner in the past 6 mths, and Sernkou had been able to put up a great display during the Oct-Dec 2014 market sell down period, standing firm at the 40 cents region. Currently, a quick outlook might see Sernkou resistance at the range of RM 0.43, in which a break out above this zone with a convincing volume will bring Sernkou trading towards the new uncharted territory. A quick outlook will be seeing Sernkou testing at RM 0.50.
Sernkou - Packing Forward
Sernkou had been plying in the blues for a quite a moment, however, not until recently which saw the restructuring of the group under Low Peng Sian @ Chua Peng Sian and Koh Kun Chuan. The group had been trimming for a better operation as well as looking to diversify into other sector as well.
The recent bullish run in the furniture sector had been lead by sector leaders comprises of Latitude, Pohuat and Homeritz, where all the 3 had saw a more than 50% gain in their share prices.
1. Latitude
2. Pohuat
3. Homeritz
With a more bullish outlook to be seen in the European counterparts as well as a stronger outlook in the USD, the furniture sector is not set to rest for the time being as the rest of the packs starts to pick up their paces, which includes Sernkou.
At the mean time, Sernkou will also be venturing into construction sector as well as plantation sector in the coming days. Currently, Sernkou will aim to complete the diversification into construction sector through the acquiring of B Cor Geotechnics Sdn Bhd by 1st half of 2015 with a cash consideration of RM 1.2million. B Cor Geotechnics Sdn Bhd which carries a Grade G7 contractor license for General Building Works, General Public Engineering Works and Piling Works. The construction sector in Malaysia will continue to see demand from both public and private sector.
Coming up Catalyst
Sernkou will be looking to see a private placement to be issued this year after the approval in the AGM for a share placement of not more than 10% of the paid up shares. The private placement objectives will be most likely looking at
- Paring down debts
- Fund Raising for new business acquisition / start up
With the current Par Value at RM 0.50, the private placement exercise will be required to be more than RM 0.50 in order to be performed. As of last Friday, Sernkou last traded at RM 0.43.
While Sernkou current financial might not be able to translate to a valuation of more than RM 0.50, it's interesting land asset and properties will be a very good take.
With oldest valuation dated back then to 1995 while most of them at the year 2001, Sernkou is sitting on a huge revaluation reserved that could easily propel the company NTA to more than RM 1.00, which would be a good move in 2015 to revalue all land and assets before GST that will be kicking in in 1st April 2015.
I believe Sernkou will be an interesting counter to look upon as the new management had a lot of things in plan for the company, in which will automatically sees a lot of coming in corporate exercises that will make the counter an interesting topic.
Sernkou quick term outlook will definitely sees the share price pegging at the range of RM 0.50, also a price to compliment the private placement which should not be lower than the par value of RM 0.50. A medium - longer term outlook might be seeing Sernkou putting up a base at the range of RM 0.60.
Bone's short term TP: RM 0.55
Cheers and have a nice day
Regards,
Bone
One of the rising industry that can be looked into will never be shy of the furniture industry, which had been picking up spot light since last year when the US QE3 started to pick up the economy and also the recent stronger USD against MYR had been adding another boost to the industry which had been traded in USD denomination.
Of the whole pack of listed furniture company in KLSE, Sernkou Resources Berhad would be an interesting take after the company had started to pick up recently, reflecting a continuous 4 quarter positive result.
Let's have a quick look at Sernkou
Sernkou had been trading in a resilient manner in the past 6 mths, and Sernkou had been able to put up a great display during the Oct-Dec 2014 market sell down period, standing firm at the 40 cents region. Currently, a quick outlook might see Sernkou resistance at the range of RM 0.43, in which a break out above this zone with a convincing volume will bring Sernkou trading towards the new uncharted territory. A quick outlook will be seeing Sernkou testing at RM 0.50.
Sernkou - Packing Forward
Sernkou had been plying in the blues for a quite a moment, however, not until recently which saw the restructuring of the group under Low Peng Sian @ Chua Peng Sian and Koh Kun Chuan. The group had been trimming for a better operation as well as looking to diversify into other sector as well.
The recent bullish run in the furniture sector had been lead by sector leaders comprises of Latitude, Pohuat and Homeritz, where all the 3 had saw a more than 50% gain in their share prices.
1. Latitude
2. Pohuat
3. Homeritz
With a more bullish outlook to be seen in the European counterparts as well as a stronger outlook in the USD, the furniture sector is not set to rest for the time being as the rest of the packs starts to pick up their paces, which includes Sernkou.
At the mean time, Sernkou will also be venturing into construction sector as well as plantation sector in the coming days. Currently, Sernkou will aim to complete the diversification into construction sector through the acquiring of B Cor Geotechnics Sdn Bhd by 1st half of 2015 with a cash consideration of RM 1.2million. B Cor Geotechnics Sdn Bhd which carries a Grade G7 contractor license for General Building Works, General Public Engineering Works and Piling Works. The construction sector in Malaysia will continue to see demand from both public and private sector.
Coming up Catalyst
Sernkou will be looking to see a private placement to be issued this year after the approval in the AGM for a share placement of not more than 10% of the paid up shares. The private placement objectives will be most likely looking at
- Paring down debts
- Fund Raising for new business acquisition / start up
With the current Par Value at RM 0.50, the private placement exercise will be required to be more than RM 0.50 in order to be performed. As of last Friday, Sernkou last traded at RM 0.43.
While Sernkou current financial might not be able to translate to a valuation of more than RM 0.50, it's interesting land asset and properties will be a very good take.
With oldest valuation dated back then to 1995 while most of them at the year 2001, Sernkou is sitting on a huge revaluation reserved that could easily propel the company NTA to more than RM 1.00, which would be a good move in 2015 to revalue all land and assets before GST that will be kicking in in 1st April 2015.
I believe Sernkou will be an interesting counter to look upon as the new management had a lot of things in plan for the company, in which will automatically sees a lot of coming in corporate exercises that will make the counter an interesting topic.
Sernkou quick term outlook will definitely sees the share price pegging at the range of RM 0.50, also a price to compliment the private placement which should not be lower than the par value of RM 0.50. A medium - longer term outlook might be seeing Sernkou putting up a base at the range of RM 0.60.
Bone's short term TP: RM 0.55
Cheers and have a nice day
Regards,
Bone
http://bonescythe.blogspot.com/
