Nicorp – Throttle Forward

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The recent strong hit back of the bulls had definitely send the bears packing back into the caves. The global equity market had started to regain back it’s confidence as investor starts to pour down their cash into some bargain hunt as the DJIA started to rechallenging the psychological 17000 again. Is the market too big to be crashed? Had the fundamentals of the economy change? Probably, these are some of the self asking questions for your to determine whether you are prepared to be fully vested in the equity market or not.

While the market outlook continue to be volatile, I would be my interest to look into company that will be going through corporate restructuring exercise, or is in the midst of restructuring. While the development in Euro continue to be my favorite research, the latest development in Nicorp might be another big hit in the market.

Let’s have a quick look on the latest price chart on Nicorp

Nicorp had been trading below the price of RM 0.14 for around 1 year as it is pending for a restructure in the company. Previously, Dato Raymond Chan had been rumored to be restructuring the company with asset injection of 1Borneo Complex, however, had gone awry. With the price chart showing a syndicated accumulation within the price range of RM 0.115 to RM 0.13 in Nicorp, a convincing break above RM 0.14 with a good supporting volume will definitely mark a new journey for Nicorp.

Nicorp – Changing Trends of Wind

The latest corporate action that had rifled across the market had saw Dato Raymond Chan being relinquish of his position of being the CEO of Nicorp, and subsequently ceased to be a substantial shareholder in Nicorp as he had disposed his entire stake of 38,836,600 shares to Dato Siaw Swee Hin (acquire 28,836,600 shares) and Quantum Discovery Sdn Bhd (acquire 10,000,000 shares).

To recap back, few months back, Nicorp had underwent a private placement of 10% (70,203,000 shares) at the price of RM 0.12. Prior to the absence of CEO due to the redesignation of Dato Raymond Chan, a new face emerge as Dato Abdel Aziz @ Abdul Aziz Bin Abu Bakar is appointed as the Chairman of the company and acquired 9,434,000 shares, representing 1.22% of the company total shares issued. Dato Abdel Aziz @ Abdul Aziz Bin Abu Bakar is a former executive director of AirAsia. Currently, he is a non exec non independent director of AirAsia with a position as a member of the audit, nomination and remuneration committee.

Dato Abdel Aziz is also an executive chairman for VDSL Technology Sdn Bhd, which provides internet coverage for corporate tower and government offices blocks.

The whole development of Nicorp became more interesting when Dato Siaw Swee Hin raised his stake, acquiring a total of 39,172,600 shares representing 5.07% of the total share issued of the company from the open market and off market direct business dealing. Dato Siaw Swee Hin is a low profile businessman that had venture into Singapore during his earlier days as a marketing executive. Currently, he is the Managing Director of Alltrust International Group.

Alltrust Internation Berhad is a partner with NamHai JSC, which is dealing with the marketing and distribution of Vietnam Long Grain White Rice. Currently, NamHai JSC is the top 10 domestic rice player in Vietnam, and is able to hold a production of more than 1.5 million metric ton a year.

Alltrust Internation Pte Ltd is dealing with Interior Fit-Out & Mixed Construction Services, Oil & Gas, Chemical and Pharmaceutical equipments and will be expanding into providing mining technology and general import and export services.

Alltrust International Group had been growing steadily under the management of Dato Siaw, which saw the company enormous growth into different sectors of trades. With the coming up expansion, Alltrust International will need to more working capital to expand further and faster.

Speculation had been rife in what will happen to Nicorp in the coming days after much changes in the management of Nicorp and a significant stake up from Dato Siaw Swee Hin. Nicorp had been plagued in the red for the past years, and it is the desire of the company’s directors to turnaround Nicorp after a series of red inks in the financial statement.

Will Dato Abdel Aziz through his corporate experience and connection be giving Nicorp a turnaround, or will be heroic Dato Siaw Swee Hin be putting a huge restructure in Nicorp in the coming days with his almighty Alltrust International Group.

Nicorp, currently with a market capitalization of RM 96 million and 772 million shares issued will definitely be a good vehicle to be RTO for a quick listing and business expansion through raising funds from the public. A similar example will see Symphony House Berhad (Symphny -0016) which had 660 millions of shares and a market capitalization of RM 125 million is a RTO target by Ranhill.

While Nicorp foray directly into the oil and gas sector might still be vague now, the possibilities of Nicorp being linked up with Alltrust International Group to provide services or equipment that caters to the oil and gas sector is still a good possibility to be eyed upon after seeing a huge stake up by Dato Siaw Swee Hin.

Nicorp will be a good company to be looked at for the time being as more corporate exercise, restructuring is going to unfold. The current entry of Nicorp is deem attractive due to
– Private placement at RM 0.12 fully subsribed
– Increase of stakes by Dato Siaw Swee Hin, with majority purchase price at RM 0.125
– Ceasing of Dato Raymond Chan as the substantial shareholder and CEO of Nicorp
– Appointment of Dato Abdel Aziz as the Chairman of Nicorp
– Appointment of Cheang Soon Siang as the executive director of the company. Mr Cheang is experienced in handling cash flow, working capital management and restructuring and recovery of credit facilities for corporate.
– High Speculation of Nicorp as a RTO target, with Alltrust International Group as potential target.

Nicorp should be looking to trade stronger in the coming days with more corporate development unfolding one by one. A quick outlook will place Nicorp testing at RM 0.15, while a longer term outlook might suggest Nicorp putting RM 0.30 to test.

Thrust in? You decide.
Bone’s short term TP: RM 0.20.

Cheers and have a nice day

Regards,
Bone

Bonescythe Stock Watch

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