Only one type or ordinary share.

They not only have warrant A & B, but convertible loan stock & ESOS (all need to be taken into consideration). And share price also have some influence to the diluted EPS. Easiest way to get diluted EPS (not so update one, true as when they publish the report) is from their Financial Statement. You can get from http://www.klse.com.my/website/bm/listed_c.../historical.jsp.

Think myself get carry away too much, my apology to anyone who might get offended by my previous quote. But to calculate diluted EPS is not that straight forward as imagined. Interest party can do some reading at http://www.asc.gov.sg/frs/attachments/2004/FRS_33_2007.pdf. But that's Singapore's FRS, Malaysian one shouldn't be differ much (think we never bother to change anything unless really needed ).

Sunday coming

This post has been edited by htt: Nov 15 2008, 09:17 PM

Before the issuance of Warrant B the EPS IS around 22 sen. Issuance of Warrant B is 3 mother share to 1 warrant B.

Diluted EPS = (22SEN X 3) /4 = 16.5 SEN

BUT, You got to consider the cash use to convert the warrantB into mother share as current asset.

Not just calculate the diluted EPS.

Of course after conversion of warrant B the EPS should be erroded to 16.5 sen (by assuming that the earings, tax , interest , forex exchange remain the same) But, don forget the cash for converting the warrant B will definitely increase the current asset of the company....

This post has been edited by darkknight81: Nov 15 2008, 09:46 PM

Normally people hold WB for the leveraged returns when the stock experience some upside. Note that it can go down as well. But either way, for lesser amount of capital, the potential to earn more is there.

It's WB doesn't earn any dividend and that is something you need to calculate yourself.


230lots WB = potential 230 lots worth of dividends but need to add lot of capital to realise that, about RM27k exercise price.

But 230lots WB also = potential 230 lots of capital appreciation at no additional costs, if the mother share price appreciate, ala successful acquisition.


For me, WB is 1/3 of the mother share. Just like the distribution ratio. So if I buy more mother share, I buy WBs 1/3 ratio.

But if you feel the counter will rise significantly within 1 year, then best to sell all mother share and buy all WB. Because 1 sold mother share can buy 3 WBs and if mother share prices shoot up, WB shoot up same amount but you will earn 3x more if holding WBs.

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Added on November 15, 2008, 10:57 pmLatest quarterly report shows that EPS for previous year was 19.99 sens. The diluted EPS after considering all WA and WB warrant conversion and Zero Couponconversions plus ESOS as well is 15.31 sens.



This post has been edited by skiddtrader: Nov 15 2008, 10:57 PM

Yup i was doing that. I bought 360 lots mother share at RM 1.84 and 230 lots warrant B at RM 0.55 after issuance of warrant B. Which approximately equal to RM 2.05 before issuance of warrant B. My concern now if ... this counter stay stagnant for 3 - 5 years then i am losing a lot of dividend ....

Yeah that is possible as well if the counter stays stagnant.

Just for info, depended on company, some warrant being converted to mothershare will not rank parri passu (same status) with the mothershare in the first year after being converted aka, not entitle the immediate coming dividend declared. So, in this case, you need to wait the second year before can start enjoying the dividend.

But it depended on company policy when setting the warrant term time. But most nowadays, warrant being given or set at rank parri passu when being converted.

Yes, you concern is perfectly reasonable, as YTLpower share is generally quite stagnant most of the time. That's why warrant being traded on par with the mothershare valuation or sometime slightly discount.
By right, for normal circumstances, warrant should trade at slight premium because of gearing.

Senior UK politician warns of run on the pound

LONDON (AP) - Britain's government risks seeing the value of its currency collapse unless public borrowing is kept under control, one of the country's senior opposition politicians said in an interview published Saturday.

Conservative lawmaker George Osborne told a British newspaper there could be a run on the pound sterling if the country's debt keeps growing.

"We are in danger, if the government is not careful, of having a proper sterling collapse, a run on the pound,'' he was quoted as saying in the Times of London newspaper Saturday. "The more you borrow as a government the more you have to sell that debt and the less attractive your currency seems.''

British Prime Minister Gordon Brown, in Washington for an economic summit intended to relaunch the crippled global financial system, said he regretted what he called "partisan talk.''

"I believe that at a time when nations are coming together all over the world to deal with these problems, I think people are looking to politicians to be responsible and to show leadership,'' Brown said.

He had no apologies for his government's plan to extend borrowing to jump-start Britain's faltering economy, saying the country's central bank backed his move.

"The governor of the Bank of England has made it absolutely clear that it is not only right to cut interest rates, but it is perfectly reasonable to have a fiscal stimulus,'' Brown said.

The pound fell to a six-and-a-half-year low against the dollar and a record low against the euro this week amid mounting fears that Britain could be in for a long and deep recession - and market rumors that the Bank of England could eventually cut interest rates to as low as 1 percent.

The government has stated that it will increase government spending in an effort to push back against the looming recession, and suggested it would drop a decade-old fiscal rule that public spending cannot exceed tax revenue over the course of a complete economic cycle.

British treasury chief Alistair Darling has said that strictly following the rules on borrowing would be perverse during a downturn, but Osborne, Darling's opposition counterpart in Parliament, condemned the move.

"The public is very concerned about how much money is being racked up on the country's credit card,'' Osborne was quoted as saying by the Times. "They know you can't just borrow your way out of debt.''-AP

Thanks for Skidd, Cherroy and Sky for your feedback..

Thats y i think it is a wise move to convert all my warrant B to mother share ASAP That for example i am losing the dividend on 28 Dec 2008 already

Is better convert to mother share and enjoy the dividend...Maybe use the dividend to buy the warrant B at a lower price may be 35 sen per pc...

If pound keep on depreciate i beliv ytl power will slide some more, then might be a good move to buy warrant B at lower price

Regarding the issue raise my master Cherroy "parri pasu" need to take a note Got to check with my remisier this coming monday.

This post has been edited by darkknight81: Nov 16 2008, 09:20 AM

[quote=darkknight81,Nov 15 2008, 09:13 PM]
Thanks for Skidd, Cherroy and Sky for your feedback..

Thats y i think it is a wise move to convert all my warrant B to mother share ASAP That for example i am losing the dividend on 28 Dec 2008 already

Is better convert to mother share and enjoy the dividend...Maybe use the dividend to buy the warrant B at a lower price may be 35 sen per pc...

If pound keep on depreciate i beliv ytl power will slide some more, then might be a good move to buy warrant B at lower price



It is no easy decision to make. You still need to speculate and the outcome no one knows!!!

There are three options.

1) convert to mother share

2) maintain warrants

3) convert to cash

Which is the best option??

Personally speaking, I sold down 70% of warrants into cash. It was a guess, so far not bad as the price has come down and may go down further. This would allow me to get more warrants. Yet I am aware that an acquisition may suddenly send the price up (maybe by 20 sen) which will result in me not getting as much. No easy decision.

Even though comparatively it is a safe counter, still it is a gamble.

Just a reminder, the expected latest quarterly report is due end of next week. This report should show some sign whether the GBP effect is as we feared. 1st quarter time-line is from 1st July to 30th Sept 2008.

It's about the same time the GBP started falling significantly against the RM but a more clearer view should be the 2nd quarter ending Dec 2008. If there is a dent in the profit margin, with an explanation, then that would be worrying. But if all still looks good, then less worrying.

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Added on November 16, 2008, 11:07 amIf the acquisition of Power Seraya really materializes, the EPS of YTLPOWER would increase by at least 50% because Power Seraya last net profit was more than RM500 mil. That itself would mean the share would appreciate by at least 30% if the deal is fair enough.

If the mother share increases by 30% following the increase of EPS from RM1.70 to RM2.21, the WB price would double from the current RM0.50 to RM1+. That's why I said if anyone is confident of an acquisition, they should buy all WB and wait for the jump.

Even if the acquisition fail to materialize, the WB would stay the same in the short term.

This post has been edited by skiddtrader: Nov 16 2008, 11:09 AM

Thanks. How do you get these numbers?

I can guess the 19.99 EPS you would get from the latest annual report? Why doesn't the annual report reports EPS in diluted EPS and non-diluted EPS? Like this we don't need to be so troublesome to calculate diluted EPS.

How do you know how many warrants A & B out there? How do you know 1 warrant convert to how many mother shares?

How do you know how many ESOS outstanding?

At RM1.70, the P/E is 1.70/0.1531 = 11.1. Not cheap at all.

This post has been edited by simplesmile: Nov 16 2008, 12:01 PM

All are in the latest quarterly reports. The diluted EPS as well is calculated for you. How many shares, ESOS convertible bonds, are all stated. It's all near the end of the report. Expected NTA after all those conversions are also stated.

PER at the current moment if you take the diluted is higher of course.

But the new WB warrants lasts for 10 years. It would be very conservative to take that into account when calculating PER. Of course this all depend on your own margin of safety so it's all personal calculation.

For me, the current PER if using the 19.99 sens EPS is RM1.70/0.1999 = 8.5x

Slashing 50% of potential dilution of EPS within the year, the EPS still will be about 17 sens, which nicely sits the PER at 10x.

Of course, if the EPS is affected by the GBP effect, then it's a whole different ballgame.

Thanks.

This post has been edited by simplesmile: Nov 16 2008, 01:13 PM

Yes the report is usually released on the 22nd, but since it is a saturday it may be released next week, Unless they decide to release it one day earlier.

Looking at total YTLPOWR shares as approximately 5.2 Billion, correct me if I am wrong (keeps increasing with weekly conversions of warrants to mother to the tune of about 6 to 10 million), and looking at seraya net profit of RM500 mil, it works out to roughly 10 sen a share per annum.

Now if YTLPOWR is sucessful in the bid, and someone knocks on my door and says would you like to sell your shares to me, the premium I would charge this fella if at 50 sen will be like asking for 5 years of seraya profits to be paid in advance. Boleh-lah.

Actually I have been waiting to pile back into warrants, but would like to wait for the report to clear some clouds. If it is not good will maintain my current position, unless there is a lot of selling, then I would buy and buy to add more.

Not much time though to decide, with bid submission's on Dec 2nd for seraya.

Another exciting thing to look forward to is the Pahang Selangor water transfer project, presently are accepting tenders.

What you mentioned is speculation thats y you choose to buy warrant only. But nobody know what is the price YTL power bid for Seraya. We don know that and i will probably don want to speculate much on it yet

Again, if you said YTL power will invest in pahang water transfer project... I strongly suggest not as.... you know our government lar....flip flop decision.... today impose windfall tax... tomolo cancel ... next week maybe renegotiate PPA again..... never ending .... . I beliv francis yeoh will not consider invest in malaysia anymore....

Speculate warrant pricing at this moment may not be the right move....I would rather get an annual (almost constant) dividend

I beliv if Seraya power really sucessfully acquire by YTL power....it will not guarantee you that the share price will surge during current market situation as everybody is in fear....

For the EPS dilution from Simple, you cannot say that after conversion of warrant the EPS will directly errode to 0.15 sen then you say the PE is 11.... HOw about the cash being raised from the conversion of warrant B ? It is an asset for the company....And don forget the cash can enhance the EPS in future...

Whether we buy the mother or daughter it is still speculation.

Pahang water transfer project, from what I know previously YTLPOWR and Pahang royals are together into this. Maybe that will help to smoothen a deal.

True, successful bid on Seraya may not mean YTLPOWR will POP. With singapore in recession, future earnings of Seraya may be affected also, for the next few years.

Altogether expected if all conversions of warrants, zero coupon bonds and ESOS, YTLPOWER will raise another RM3 bil or so. But unfortunately, cash in hand for the most part only earns interest from banks. So the contribution to EPS is not as significant. But yes, NTA will increase slightly if all conversions are done.

green color now

You still don get what i mean . i mean for warrant you are purely speculate as you don reciv any dividend.....Where as if i buy mother share i don need to worry much if the recession prolong to more than 5 years... as i still have income annually from my investment. Not to say warrant is bad but just that current situation not so avisable to speculate on warrant. Like i said i will consider warrant only if it really drops to 30 sen... Currently i would try to convert my warrant first

Everyday the situation changes. If the shares are sold down as recently happened, mother went down to $1.62 and warrant-B to 40sen, If take opportunity to sell and convert to warrants, can get 4 warrants for 1 mother share . within a few days price went up by 10 sen. If mother makes Rm10,000/= for 100 lots, Warrant-B makes RM40,000/= and all this while the dividen is nowhere to be seen. Are you sure waiting for dividen is the best thing to do?

Don't mean to criticize, but no fixed ideology (keeping an open mind policy) appeals to my style of investing.

We have our own ways, just sharing my thoughts.