PSC Corporation Ltd

By: Derek Lim

PSC Corp was the top volume today and my mom being their shareholder got really excited. It in turn got me fired up and decided to do a little study on it.

The sudden surge in volume today is mainly due to a Substantial Shareholder’s Interest – Goi Seng Hui (The Popiah King). He increase his stake by 12.13%. Many people including myself regard Goi as a savvy investor.

The following report was taken from CNA forum on Friday June 22.

Description: PSC Corporation (PSC Corp) manufactures, markets, and sells household
consumer products, soybean products, and paper products. The company also provides healthcare consultancy and hospital and hotel management services, develops properties, and provides management services to Econ Minimart chain of stores.

Immediate outlook: PSC Corp tested its resistance at S$0.12 on strong volume yesterday. It tried but failed to breakout. We believe it is only a matter of time before the breakout happens. Both its short-term technical indicators are looking bullish. Technical
Buy now at S$0.10-0.115 with a stop placed at S$0.09.
ST target of S$0.155-0.16.

Medium-term outlook (2-6 months):
For PSC Corp is bullish after the stock broke out of its LT consolidation triangle in last week.
We believe that the downside risk is quite limited at this juncture.
LT investors should accumulate on weakness, preparing for the upcoming rally.
The breakout target points to S$0.20-0.225
(its high in 2000).

´╗┐At a glance
Last Price 0.115
YTD (%) +35.3
Issued shares (m) 1,868.36
Market cap (S$ m) 214.86
52-wk range (S$) 0.075 – 0.13
3M avg volume (m) 3.92
2008 P/E (x)* N*censored*
P/BV (x) 1.1
*Bloomberg Consensus
By GK research

I did a simple calculation on the proposed share consolidation and rights issue.

I still have not figure out the problem. But base on the above calculations, the share consolidation and rights issue means that I will make a loss. Surely something is not right here.

Saturday, July 7, 2007
I have figured out the problem in my calculation. Read it here.

Comments

  1. Anonymous says

    simply because you had divided the 0.75 by 2 to make room for the rights
    but its not so, the price should go down by 1/3, not 1/2 as its a 1 for 2 rights issue?

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