20 November 2010

GCORP (3166): A Record about Winding-up company in Bursa Malaysia

Current Market Price: RM1.61

Summary of current announcements:
Announcement at 07/09/2010 Kindly refer to the company's First Announcement pursuant to Practice Note 17 (PN17) dated 6 September 2010.
Announcement at 05/10/2010 : Proposed Winding-Up. The Proposed Winding-Up will facilitate the distribution to the Company's shareholders [other than CRSB, the Relevant Family Members and PAC (both as defined in the Circular to shareholders dated 5 August 2010)] the sum of RM1.70 cash per GCB Share.

Procedure of Winding-up:
1. Proposed winding-up
2. Approved by shareholders
3. De-list from Bursa Malaysia.

Financial Year EndEPS (sen)Dividend (sen)
Net assets per share attributable to ordinary equity holders of the parent ($$)
31/01/2011 (until Q2 only)21.5-2.3900

Some insight:
Maybe this is the worst return when an investor invests an undervalued company - Winding-up. Undervalued company is not only has low PE, but also has a healthy balance sheet, dividend, and good prospect. In other words, undervalued company is a very good company but not yet get attention in the public.

Just assuming a company is an undervalued company based on its PE is very risky and dangerous. Because the PE value can be manipulated by debt and borrowing. Therefore, investor should avoid this kind of companies.

One of the value investment strategies is to calculate the value of a company when it is going to winding-up. Why a company want to winding-up even though it still gets profit annually? PN17? Undervalued? or another secret plan?

That's all for today. Feel free to give me a comment about this topic or any suggestion about Xaivier Blog. It will be a great support to Xaivier Blog.

Written by: Xaivier Chia

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