Sunday, January 15, 2023

MCLEAN EYING TO MAKE IT BIG ON NICHE BIOTECHNOLOGY SECTOR WITH 40% CAGR


Every crisis is an opportunity. As most of Malaysian equity were settled down at the lower price range, does not this turn into an opportunity for a good bargain?

Revisit back to Mclean (0167), this company is involved in the E&E industry, specifically on surface treatment and cleaning, with major customer in the HDD industry. While the development of better HDD technology continued to keep HDD relevant in enterprise data storage, Mclean took a big step in diversifying in healthcare through asset injection from the current major shareholder - Yeo Hock Huat.

The latest proposal involving asset injection - Biocair, a Singapore based home grown brand that manufacture and sell bio-active disinfectant.



The acquisition will be funded through
- private placement
- rights issue and free warrant upon subscription
Upon completion, Mclean will own 60% of JCS Biotech Pte Ltd, which is the holding company for the disinfectant brand, Biocair.

The acquisition will come with a profit guarantee of SGD 5.5 million.

The fund raising and acquisition will also provide a bridge for 

Biocair to penetrate into Europe (UK) market for the start.

The market prospect for disinfectant is growing very strong, with CAGR of 41% in the global export market. The covid-19 pandemic had help raise awareness on usage of air purification in the general market.

Market observers are of the view that medical sanitization which include air purification are here to stay. This once a niche segment will be a big growing market especially in the developed country.

The BAIT AND HOOK BUSINESS MODEL

One of the strong and successful business model is bait and hook model. There are a lot of successful example in the consumer product segment which uses this business model such as water filter system and coffee maker (machine and pellets)

This business model operate on selling a one time cost hardware at a low cost, and capture a repetitive revenue from product consumption.

For Biocair, it will be selling air purifying machine for 1 time, and it will lock the customer into purchasing refillable disinfectant liquid for a period of time until the customer changes their brand preferances.

Mclean diversification into this industry will present the listed company with a better growth prospect, which will be good for investor in the long term.


After all, at a price below 20 cents, it represents an attractive prospect for investor on the future growth of Mclean.


IMPORTANT NOTICE
Please be informed that I am not a professional or certified analyst. I am not a licensed consultant, just a normal retail investor. I am just sharing my ideas and opinion on the market outlook. Any company mentioned should not be interpreted as a buy/sell/trade call. Please do your own research and buy/sell/trade at your own risk.



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Friday, January 6, 2023

WILL NOTION VTEC REPEAT THE FEAT OF 2017 WARRANT NOTION-WB EXPIRY FROM RM 0.40 TO RM 1.40


Equity market continue to be volatile with the mixed view on the economic outlook. Some say economy is hampered by inflation, hence the need to increase interest rate to cool down the inflation. Food cost continue to rise, and energy prices are elevated due to war and also economy going back to pre-covid level. 6 to 7 years of under investment in the oil and gas sector resulted in oil production unable to cope with the demand. On the bright side, oil and gas industry are flourishing with fat pay checks and bonuses. Every crisis come with opportunities, it is a matter on whether you choose to look at the crisis and run away or find the opportunity and take action.

Notion VTEC Bhd (NOTION 0083), primarily involve in HDD business and automotive brake part fabrication. However, through years of improvisation, the group is now an EMS supplier for top MNC. They are also involved in face mask supplies.

Season and experienced investor will know that Notion is an exciting counter to trade at when the time is right.
Going down memory lane, one of Notion strong rally came during the near maturity date for Notion-WB in 2017.


Notion WB exercise price RM 1.00

As we can see the mother share had rallied strongly at the start of the year from RM 0.40 until RM 1.40 for the warrant to be worth converting into mother share.


Coming into 2023, now we have Notion-WC in the coming of maturity stage in the month of MARCH 2023.

At the revised exercised price of RM 0.56, can Notion mother share rally to RM 1.00 region again?

It will be very much interesting to see how Notion will trade in the next few weeks

Technical outlook will be seeing a good uptrend outlook for Notion entering the new year of 2023.



NEXT ON NOTION  ---> Potential new EMS contract from existing customer in 2023?



IMPORTANT NOTICE

Please be informed that I am not a professional or certified analyst. I am not a licensed consultant, just a normal retail investor. I am just sharing my ideas and opinion on the market outlook. Any company mentioned should not be interpreted as a buy/sell/trade call. Please do your own research and buy/sell/trade at your own risk.

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Wednesday, January 4, 2023

WASEONG TO BENEFIT FROM MORE OIL AND GAS PIPELINES JOB IN 2023


Happy new year 2023 to all my readers. May you continue to be blessed with good health and good wisdom for your investment journey.
2022 was a rough year for most of the investor as the market is very volatile with wars, geo-political tension, election, rising interest rate, covid lock down. However, one thing that is certain for 2023 is a very positive outlook from Petronas on the local and international oil and gas prospect. 
As we entered into a series of energy transition - towards cleaner energy, the current set up and infrastructure will slowly transit in stages with hydrogen as a core clean energy, and as an energy storage medium.
To achieve a cleaner energy production, an important aspect in the production of sour gas oil field (oil field with high CO2) will require carbon dioxide to be stored into depleted oil well instead of being released into the atmosphere. Another aspect of it will see the storing of CO2 into depleted oil well from the process of refining LNG into hydrogen.
All the method will require the installation of oil and gas pipe from production site into depleted storage well, which can run into more than 100 kilometers.
According to the Petronas 2023 to 2025 outlook activities, the required pipeline will run up to 11,000 kilometers.

Wah Seong Corporation Bhd (Waseong 5142) expertise in the oil and gas pipeline coating is the leading company in this niche industry. It has got a range of track record in the international presence, including the 1200 km long NORD STREAM 2.
In Feb 2022, Waseong announced RM 1 billion contract from EAST AFRICAN CRUDE OIL PIPELINE.
In Dec 2022, Waseong surprised the market with a topside module contract for YINSON FPSO worth USD 127 million.

However, there are still many other prospects for future project to be won by Waseong from the carbon capture and storage infrastructure.
1. Sarawak KASAWARI - site to storage approx 110km
2. Terengganu - blue hydrogen (CCS)

Waseong to see strong reversal on project impairment?
Waseong had in FYE 2021 impaired all the project that is being delayed due to oil price slump and covid19. However, all those projects in the middle east had since restarting slowly in stages.
The revival of project will be going to see massive reversal from the project impairment that runs up to more than RM 200 million.
On the technical outlook, Waseong does trade in technical points by looking at parallel lines created by 1 and 3, and project the parallel line to upwards spot 2 to predict the 4th spot.

The current upwards trend might signal a reversal on spot 3 (in green) heading towards spot 4 region.

After all, Waseong is fully impaired in its book, and do not have anything much to lose, but have everything to gain with a bright prospect in the oil and gas industry.
I am obliged to inform my readers that I owned Waseong shares. Currently at the price of RM 0.64, will it be a good entry point?

IMPORTANT NOTICE

Please be informed that I am not a professional or certified analyst. I am not a licensed consultant, just a normal retail investor. I am just sharing my ideas and opinion on the market outlook. Any company mentioned should not be interpreted as a buy/sell/trade call. Please do your own research and buy/sell/trade at your own risk.


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