Stock Review – AJIYA (7609) - 3 (AJIYA BERHAD)

Bursa Malaysia - 7609

Bloomberg - AJY:MK
Yahoo - 7609 .kl
Webpage - http://www.ajiya.com/

Reason the stock price drop

The main reason the AJIYA had start dropping today is because of yesterday and today announcement of the private placement. The private placement at the peak of the price will definitely benefit the company because they can have more share premium.

The private placing to an unknown investor is a huge uncertainty. Investors that bought the share at below RM 3.00 might start to take profit from it. This unknown investor will become one of the major shareholders of the company and it might influence the operation of the company in the future.

With the current economy and might be worst next year, an expansion plan shall be on hold but AJIYA is announcing for private placement for expansion.

PROS:

Private placement at the peak will benefit the company

CONS:

Private placement to an unknown investor. The unknown investor will become the major shareholder. The uncertainty of the world economy is not the best time for expansion.

Summary of Stock Reviews

Stock Review – AJIYA (7609) - 2 (AJIYA BERHAD)

Bursa Malaysia - 7609
Bloomberg - AJY:MK
Yahoo - 7609 .kl
Webpage - http://www.ajiya.com/

Income Statement

According to the 3Q quarterly report the profit before tax for these quarter and 9 months cumulative is higher compared to previous year. Although there is a slight increase in long term borrowing, however the slight increase compared to last year audited report in long term borrowing is able to cover by the increase of cash and equivalent.

Although there is an increase of net asset per share from 3.74 (audited annual report) to 4.01 (3Q),  total liability is reduce from RM106,024,000 to RM 102,486,000 which means that AJIYA is not borrowing extra money to increase their asset.

The net cash flow from operation also increase from RM 11,578,000 (3Q 2014) to RM 27,178,000 (3Q 2015). There is almost 134 % increase. This is mainly cause by the depreciation of Ringgit Malaysia.

PROS:

Higher profit before tax Increase of net asset per share while the total liability is reducing. Almost 134% increase of operating cash flow from 3Q 2014.

Summary of Stock Reviews