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Tuesday, April 13, 2010

Something Brewing In Advance Information Marketing Berhad?

Advance Information Marketing Berhad, together with its subsidiaries, provides customer loyalty management solutions and business process outsourcing services in Malaysia, Singapore, and Indonesia. It develops and provides loyalty and database management software applications and information technology infrastructure. The company offers Advance Information Marketing System, an enterprise marketing management solution that comprises managed loyalty application to manage various aspects of loyalty program, including members’ information, merchant activities, inventory updates, and redemption process; enterprise application for campaign management, e-auction engine, SKU tracking system, payment gateway, electronic data interchange, B2B integration with Web services, grid computing, and mobile and wireless computing; and business intelligence application that enables users to analyze their customers’ profile, and purchasing behavior and pattern. It also offers various solutions, such as business intelligence services; outsourced integrated marketing services; inbound and outbound contact management solutions, including customer service, telesales, relationship, and contest management; outsourced procurement and fulfillment services; and technology infrastructure solutions.

AIM is listed in ACE market of Bursa Malaysia just in case you can't find it. It has market capitalisation of RM 49 mil,Current asset of RM 40 mil compared to total liabilities of RM 16 mil. So,AIM has about RM 24 mil liquid assets.That means out of RM 49 mil, about 49% is cash or equivalent.Investors are paying half for its business plus the remaining fixed assets of RM 9 mil.Let's exclude the fixed asset of RM 9 mil for simplicity.

The question now is what is so attractive about AIM that I have to pay about RM 25 mil for its business component?

1) Actually there is nothing attractive in the "Income Statement" of AIM. In 2009, its revenue is about RM 46 mil (very stagnant for 4 years) but COGS has been increasing from RM 24 mil in 2007 to RM 41 mil in 2009. Profit margin has been shrinking which signifies intense competition in that industry.It may also means "hanky panky" stuffs have been happening for the past 4 years. My point here is,why spent so much when the revenue is stagnant?

2) Something is happening to the shareholder.
On 8 April 2010,DATO' SHAMSUDDIN BIN HAYRONI has sold all his shares in AIM @ RM 0.23. Before this, he and his wife owned about 19.1% of AIM. Their 19.1% was sold for around RM 8.23 mil.His wife Datin Rahmah Binti Kassim has resigned as the Alternate Director.This is quite a good news because Dato Shamsuddin and Datin Rahmah had sold their 127 m2 condominium in Villa Flora TTDI to AIM for RM 430,000. They bought it for RM 375,000 in 2003.Why the board of directors approve it if it's not in favour of AIM?

3)Who is DATO' SHAMSUDDIN ?

Shamsuddin Bin Hayroni serves as Executive Chairman of Majulia Group of Companies. Dato Bin Hayroni has been Non-Executive Chairman of Advance Information Marketing Bhd. since February 21, 2005. A civil engineer by training and profession, Dato Bin Hayroni started his illustrious career in Jabatan Kerja Raya, Selangor at Public Works Department, Selangor from 1978 to 1988 and Project Lebuhraya Utara Selatan (PLUS) Bhd from 1989 to 1995. He then ventured into the construction and property development industry in 1995. Subsequently, in 1999, he ventured into the CRM business and serves as Director of Electronic Commerce Technology Sdn Bhd (ECT). Dato Bin Hayroni graduated from University Technology Malaysia with a Diploma in Civil Engineering in 1978 and a Bachelor Degree in Civil Engineering from the University of New Hampshire, USA in 1983.

His company Majulia Group of Companies, has obtained many projects from JKR. I don't know whether it was a fair tender but don't play play with this guy because he and his wife are 'orang kuat'. No wonder AIM bought their condominium.

3) Appointment of Tan Chin Yen as Executive Director. She is quite experience in the current industry.
From qualitative point of view,it's a good news that Dato Sham is leaving. And i'm sure that his shareholdings of RM 8.23 mil has been bought by 'someone' else but it was not reported.Tay Woon Teck and Nyang Koon Seng (CEO & Executive Director) jointly owned 43.5% of AIM.

So,nothing to worry because i personally think AIM is planning to offer something "nice" for its shareholders.
Possibilities are
1) Bonus issue
2) Special Dividend
3) Acquisition of another complimentary business
4) Successfully obtained big contract from government
5) Joint venture with another companies

Good news are brewing, Are you buying?


4 comments:

  1. Hi BBC:

    But it has moved a lot already from 12 sen?
    What's the TP please?

    ReplyDelete
  2. I have no superpower to predict the target price.What i presented here is solely based on my analysis.AIM's current valuation is pretty attractive from "corporate event" perspective (new Executive Director & departure or politicians) and "cheap valuation" (paying 50% for its business only).

    ReplyDelete
  3. Hi BBC,

    This stock seems to be attractive. But it has been dropping drastically lately. I am wondering what happening to this counter?

    ReplyDelete
  4. This stock is for trading.After i recommended it,AIM bulls run to about RM 0.40 per share.I sold all my holdings already.You would have made a lot $$$ if you do the same.Now,I'm buying more because next quarter earning is coming out!

    ReplyDelete