Update on YLI Holdings

My Dearest Doc,

Here is an update to the YLI Holdings posting.

Today's Business Times reported the following, Syed Yusof buys 30pc stake in YLI

• Syed Yusof buys 30pc stake in YLI
  
  June 9 2007
  
  TAN Sri Syed Mohd Yusof Tun Syed Nasir, a prominent property developer, has bought 30 per cent of YLI Holdings Bhd, a pipe maker for an undisclosed sum.
  
  Syed Yusof bought 29.6 million, or 30 per cent, of YLI on June 7, the company said in a statement to Bursa Malaysia yesterday.
  
  On the same day, the same number of shares were sold by Loh Yok Yeong, the major shareholder of YLI. This means that Syed Yusof is now the single biggest shareholder of YLI.
  
  Loh held some 40 per cent of YLI as at June 30 2006, its annual report showed.
  
  Shares of YLI were up 10 per cent to RM3.20 yesterday.
  
  Syed Yusof, who made a small fortune from the takeover of Southern Bank Bhd by Bumiputra-Commerce Holdings Bhd, had told Business Times that he was looking to buy shares of undervalued companies.
  
  In August last year, Syed Yusof sold his shares in Landmarks Bhd to Genting Bhd, presumably for a tidy profit, after he threatened to make a bid for the firm.
  
  Then, he was unhappy because the incumbent shareholders wanted to dilute his stake and tighten their grip on the company.
  
  It is unclear what he intends to do with YLI. The pipe maker reported an 8 per cent rise in net profit to RM14 million in fiscal 2007. It also has a clean balance sheet: about RM50 million in cash and zero debt.

I just realised that I had a copy of OSK report in my mail box on YLI too!

• Given that the new shareholder may significantly boost sales going forward, we have fine tuned our earnings projection by 14.1% and 15.3 for the next 2 years. On top of that, the news may also uplift market sentiment for YLI and thus we are upgrading our recommendation to TRADING BUY. We have applied a more aggressive valuation parameter based on 5 year average peak PER of 20.7x FY08 EPS that translate into fair value of RM4.18 or 43.6% upside potential.