YFG (7122) - Sold NTPM and bought YFG
I have no particular strong (fundamental) reason to buy YFG except for the recent announcement which causes some quarters grow weary of the company. The par value reduction should not cause drop in share price as there is no negative impact towards the counter.
Don't think there will be a RTO (of course I can be wrong) but I felt that the reason there was a par value reduction is to strengthen the position of the company. I felt that because of the accumulated losses that the company had experienced as well as the discount on shares, it is susceptible to PN17. (Read in what situation it can be in PN17 here)
The one area under PN17 which the company is very susceptible is the less than 25% of the issued and paid up capital of the company. Hence, by them reducing the paid-up capital, the chances of it getting to PN17 should be lower.
The other reason is that it now can raise private placement at below 10 cents as previously with par value of RM0.10 it may need to raise their funds at the minimum par value. Issuing at a discount would be much troublesome. Now the new proposal is for par value reduced to RM0.02.
In any case, there should be no reason for me to buy as there are no fundamentals except that the company has a very low market cap and being a penny stock (hence high volatility).
The other thing is that it does seem to progress with a new Chairman and some Directorship change. Am just wondering what takes them so long??? In any case, the new guy in charge of corporate seems to be better. Now for the real business!!!
I still think it will need to raise funds to strengthen its financials and then move forward.
http://www.intellecpoint.com
