27 November 2012

ECS ICT BERHAD: Re-evaluate Q3 EPS after Bonus Issues

The quarter 3 (Q3) EPS of ECS ICT BERHAD (5162) was 5.40sen. In a comparison to its market of RM1.00, PE was only 5. What a good deal.

Wait!! ECS has issued bonus recently. In other words, we need to re-evaluate or examine whether its reported EPS has been corrected or not.

According to the announcement from Bursa Malaysia,

"Bonus issue of 60,000,000 new ordinary shares of RM0.50 each in ECS ICT Berhad (“ECSB Shares”) (“Bonus Shares”) to be credited as fully paid-up on the basis of one (1) Bonus Share for every two (2) existing ECSB Shares held at 5.00 p.m. on 30 October 2012"

So, total shares is 180,000,000 = 60,000,000 (1 bonus shares) + 120,000,000 ((2 existing shares)).

Since the net profit was 6,537,000, the corrected EPS = 6,537/180,000 = 3.67sen

With EPS of 3.67sen or approximately 4sen, the current market is slightly less attractive to me (after considering its balance sheet and cash flow). Therefore, the probability for me to be the shareholder of ECS ICT Berhad is very much dependent on whether got nice people willing to "make a deal"* with me.

That's all for today. More fascinating articles and sharing will be updated from time to time in Xaivier Blog. So, you are welcome to subscribe our feed, look at our sitemap or simply visit our Homepage for latest sharing.

Written by: Xaivier Chia

p/s: *To make a deal with me, most of the time, it only occurs during panic sell or bear market.

P/S: The above sharing is solely based on personal insight. Please do not take it seriously. However, your valuable feedbacks are very welcome.


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