Dsonic was listed in September 2012 at its IPO price of RM2.00. In May 2013, it broke above the RM2.00 resistance and launched into a rally that saw its share price rose 13-fold!! If you have the good fortune to buy 2000 Dsonic shares at the point of breakout at RM2.00, you would now have 15,000 Dsonic shares trading at RM3.62. The increase in units was not due to any Rights Issue but purely due to a 1-for-2 bonus issue and a 1-to-5 share split. This means that your initial outlay of RM4000 is now worth RM54300.
Imagine my surprise when I recently learned that Dsonic is again proposing another bonus issue! Mind you, this is a 1-for-1 bonus issue! Like Mae West, Dsonic subscribes to the idea that "Too much of a good thing is wonderful."
I have seen quite a few spectacular rises in the past but Dsonic must take the cake. Never have I seen a stock so determined to reward its shareholders like Dsonic. This stock will be long remembered as a stock that keep on giving....
I appended below the quarterly results (in table & chart) and the price chart for your perusal. You will note that the earning dipped slightly last quarter. That's not a significant development unless this trend persists for next 1-2 quarter(s). The EPS is about 12 sen (arrived at by dividing its NP of RM82 million by the total shares issued of 675 million units). At the current price of RM3.62, it is trading at a trailing PE of 30 times.
Table: Dsonic's last 7 quarterly results
Chart 1: Dsonic's last 7 quarterly results
Chart 2: Dsonic's daily chart as at Mar 13, 2014 (Source: Tradesignum)
I touched on Dsonic a few months back (here), lamenting about missing out on the stock. Others have done a better job at selling this stock. For example, RHB Research called a BUY on it with TP of RM3.36 (here) while Maybank IB highlighted it as a trading idea (here, go to Page 5). RHB's TP of RM3.36 is based on PE of 23.5x FY2014F and even that bullish target has been overrun.
In times like this, I remind my clients to be careful. Whenever we blow a balloon too fast, we run the risk that the balloon will blow up in our face.
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Dsonic.