Ranhill: Our Financial News Being Used To Drive The Stock Higher!

The best performing stock yesterday was Ranhill who surged a whopping 30.5 sen or 31% to close at 1.27.

All thanks to yet another rumour being spun by our country's top financial news, Business Times, Ranhill said close to being taken private

• By Sharen Kaur Published: 2008/07/24
  
  RANHILL Bhd is close to being taken private by controlling shareholder Tan Sri Hamdan Mohamad in a deal that can be worth about RM420 million, says a source.
  
  The source told Business Times that Hamdan, who controls the engineering firm and is also the group's president and chief executive officer, is working out the details to take it private within the next three to four months.
  
  Hamdan and Ranhill executive director Datuk Chandrasekar Suppiah could not be reached for comment.
  
  Analysts said the controlling shareholders of Ranhill had toyed with the idea to take it private as the stock has relatively underperformed.

Now if the source and the analysts mentioned by the reported is credible then why is the source being afraid to be named?

Is it wrong to question who the source is?

Or does the source represents funds whose sole objective is to drive the stock higher?

Care to prove me wrong?

Now let's put some simple commonsense thinking also.

If Ranhill Bhd is really worth so much more and if the owners really want to take it private, why would they leak the news to the public? And when such news is leaked, surely the stock would be driven much higher, thus eliminating whatever privatisation value there might be! Would such reasoning be flawed?

So surely it wasn't the owners who leaked such news out.

But if it wasn't the owners, who then?

And why?

• Ranhill shares have dipped by some 70 per cent this year trading as low as 79 sen in the last few weeks from a RM2.65 high in January.

Why has Ranhill dipped so much?

Perhaps one should ask why did Ranhill traded so high in the first place?

That the stock used to trade so high simply is not a justification that the market valuation was fair!

How about the incredible incident last year when the local press blatantly suggested Ranhill had struck oil? A move which saw the stock gaining a whopping 29% in one session of trading?

Yeah, do refer to the following postings, According to Sources: Ranhill Strikes Oil!!!!!!!! , According to Bloomberg: Ranhill Denies! and Do you think that Bursa should take action against misleading reporting?

Ok and how about Ranhill's performance as a company?

Here is the link to its latest earnings report, Quarterly rpt on consolidated results for the financial period ended 31/3/2008.

It lost some 31.7 million for the quarter. Annualised earnings indicates earnings of around 38 million, giving a rough earnings per share of 6.4 sen only. So that Ranhill Bhd was trading at around 79 sen and given the fact that Ranhill cash balances were rather weak and extended, the low stock price had some just reasoning yes?

The article then continues..

• "Even if we assume there is no value attached to its construction and EPCC business and only assigned value to its 100 per cent stakes in Ranhill Utilities Bhd (RUB) and Ranhill Power Bhd (RPB) based on their respective privatisation valuations of RM1.1 billion and RM258 million respectively, coupled with debts of about RM100 million at holding company level, Ranhill's theoretical sum or parts fair value works out to about RM1.98 apiece," the analysts said.
  
  "This is very close to its net tangible asset of RM1.91 a share as at March 31 2008," they added.
  
  For the 12-month period to June 2007, Ranhill posted a profit of RM117 million and revenue of RM1.47 billion

OMG! A new valuation method - sum of private parts? LOL! Wonder where they learned this new one from?

And that very last line..

• For the 12-month period to June 2007, Ranhill posted a profit of RM117 million and revenue of RM1.47 billion.

That said 12-month period to June 2007 was last reported on Aug 2007. Here is the link to that earnings report. Quarterly rpt on consolidated results for the financial period ended 30/6/2007

It's now July 2008.

Why was the current earnings performance being left out?

Why was such an outdated earnings being used as reference in the news?

If it was outdated, surely it's not 'news' anymore, yes?

And consider the following. Latest earnings from Ranhill showed a huge loss of 31.7 million! Ytd earnings for its 3 quarters of this current fiscal year only totals 28.8 million. Quarterly rpt on consolidated results for the financial period ended 31/3/2008

It pales in comparison to a company earning 117 million!

So won't you ask if this was the reasoning why the information was blatantly left out?

And by whom?

Was it the reporter or the said same analysts?

Would you consider this as utterly horrific and appalling reporting of information where actual current facts are blatantly left out?

And when the stock soars more than 30%, don't you think it's simply more sickening?

Are our local press ruling the stock market?

Now let's consider the privatisation story again.

Let's look at Ranhill as it is. Look at some of its key balance sheet items. ( Let's refer to this Quarterly rpt on consolidated results for the financial period ended 31/3/2008 earnings report)

Deposits, bank and cash balances... 960,154
Short-term borrowings..................... 297,174
Long-term borrowings................... 3,232,196

Let's look from an ownership perspective. The moment the boss buys everything, the boss would be in full control over the cash and debts. Yes, Ranill has a nice 960 million in its piggy bank but its total loans totals a whopping 3.529 billion! Yes, Ranill Bhd is in a whopping net debt of 2.569 billion! Which means by buying this company as it is, the boss would be effectively 2.569 billion in debts!

So how much do you reckon the boss would fork out to buy this company which is in a net debt of 2.569 billion?

I wonder.

And you know, some folks views public listed debts in a different perspective. As a public listed company, the debts owned by the plc is public. And when it's a private company, the debts become theirs!

And then, another very interesting thing for me. I was looking at some recent shareholder buying/selling activities.

Changes in Sub. S-hldr's Int. (29B) - Hamdan Mohamad

Changes in Sub. S-hldr's Int. (29B) - Hamdan Mohamad

Changes in Sub. S-hldr's Int. (29B) - Hamdan Mohamad

Look at those recent disposals of shares by Ranhill Corporation Sdn Bhd. which dilutes the boss Tan Sri Hamdan Mohamad's stake in Ranhill Bhd.

I am confused.

Macam mana ni?

If there is intent by Tan Sri Hamdan Mohamad to take Ranhill Bhd private, surely all these disposals would not have taken place, yes?

How lah?

What do you think of this privatisation story on Ranhill?

You think got any substance, ah?

Or do you think it will turn out to be yet another 'According to Sources: Ranhill Strikes Oil!!!!!!!! , According to Bloomberg: Ranhill Denies!' fiasco?

Sigh!