Wednesday, March 07, 2012

AMedia dropped 8 sen or 19% today

Another stock which has plummeted sharply is AMedia. This stock lost 8 sen to close at RM0.34. It is a profitable company, which reported a net profit of RM15.2 million on turnover of RM36.5 million for FYE31/12/2011 (here). It was doing so well that it was reported to be planning a transfer to the Main Board (here). There was no report anywhere to explain the sudden drop in this stock.

I studied the financial statement for QE31/12/2011 & QE30/9/2011 and discovered a sudden increase in its Property, Plant & Equipment from RM36.7 million to RM70.0 million, which was financed by an increase in Other Payables & Accrued Expenses from RM0.8 million to RM30.9 million. These changes caused the company's Total Assets to jump from RM58.6 million to RM94.5 million while its Total Liabilities increased from RM2.6 million to RM34.6 million. While gearing ratio was negligible, its current ratio plummeted from 8 times to 0.6 times. However, AMedia was sitting on Cash & Bank Balances of RM12.6 million as at 31/12/2011 and this probably gave investors a high degree of comfort that the company was in a good financial position. It will be interesting to learn what caused the sudden drop in AMedia. I hope that it is not some skeletons in the closet like Silver.

Meanwhile, we can see that the stock should find support at the horizontal line at RM0.34 and thereafter at the intermediate uptrend line at RM0.32.

Chart: AMedia's daily chart as at March 7, 2012 (Source: Quickcharts)


Malaysia Stock Talk said...

Asia Media has installed substantial numbers of TVs on buses. If you take Rapid KL buses, you can see some buses with 4 TVs, of which 2 are new and working while the other are not.

This could explain the reason for the jump in property, plant and equipment

Fabien Wong said...

Hi Alex,

What do u think of JT International? At current price of 6.69 do u think its a viable buy?