Airasia - MAS attack!

The government had reversed an earlier decision of a minimum floor price for MAS fares on its 22 domestic routes. As a result, AirAsia’s share price declined 2 sen to RM1.46 while its call warrants were unchanged at 16.5 sen, while MAS was up 1 sen to RM2.81 yesterday.

As been told by Tony Fernandes, this might be over reaction from the public. Airasia has been facing obstacles since they started this aviation company:
- Move Airport
- SARS
- Tiger Airlines
- Singapore Policy
- Goverment subsidised on MAS
- Tsunami
- Thailand Political
- Oil & Gas

Airasia still remain strong after all these years and that proved their fundamental is STRONG.
I believe in Tony Fernandes ability to bring Airasia to better stage and the Goverment move is to just to make sure a win-win situation.

The middle east is in turmoid now and I guess our market has reached the lowest point for this year. Now should be a great time to invest in such stable company.

Reviews of discussed IPOs on July 10, 2006

Rimbunan Sawit (RSAWIT)
Highest: 1.370
IPO: 1.00

MicroLink (MICROLN)
Highest: 0.735
IPO: 0.49

TH Plantation (THPLANT)
Highest: 1.900
IPO: RM 1.25

I Power (IPOWER)
Highest: 1.070
IPO: RM 0.43
Bonus: 10.8%

Most of the IPOs being discussed in this blog have performed well. We shall use this as case study. Malaysia Market (Mesdaq) is NOT that bad afterall (Kudos to Daniel).

IPO - Favelle Favco (Second Board)

Favelle Favco offers 48 million new shares and 22 million offer shares in its initial public offering (IPO), which are worth RM26.4 million based on a final price of RM0.55 per share.

Favelle Favco is a subsidiary of Muhibbah Engineering (M) Bhd, currently makes about 70 cranes a year at its factory in Senawang, Negri Sembilan. This translates into a 70 per cent capacity utilisation. The group is currently among the top 10 global suppliers for tower cranes, port/wharf cranes and offshore cranes.

About 80 per cent of the group's revenue are derived from overseas markets. In the last five years, Favelle Favco penetrated the US, Mexico, Azerbaijan and countries around the North Sea.

Today, some 70 per cent of the group's total revenue come from projects in the oil and gas industry. Its clients include Shell, British Petroleum, Exxon Mobil, Hyundai Heavy Industries, Talisman Energy and Petroliam Nasional Bhd.

Usage of IPO earning:
- Repay the group's borrowings
- Finance its research and development activities
- Pay for listing expenses and working capital

Future Plan:
- To expand its presence in countries such as Russia, Brazil and the Middle East, which are highly active in the oil and gas and construction industries.

Recent Contracts:
- Secured six new contracts from the Netherlands, Singapore and Malaysia. The current order book stands at RM310 million which should keep it busy until 2008

Revenues & Profits:
- In fiscal year to December 2004, the group made an after-tax profit of RM13.3 million (Exceptional gain of RM8.8 million) on RM267 million revenue.
- In fiscal year to December 2005, the group made an after-tax profit of RM7.8 million on RM330 million revenue.
- Projected RM349 million revenue for December 2006