GHLSys broke above its strong horizontal resistance at RM0.50 this morning. This is a follow through of a bullish upside breakout of a triangle in August at RM0.38. With this breakout, GHLSys may rally to its next resistance at RM0.80.
Chart 1: GHLSys's daily chart as at Oct 7, 2013_11.00am (Source: Quickcharts)
Chart 2: GHLSys's monthly chart as at Oct 7, 2013_11.00am (Source: Quickcharts)
There is an announcement by e-pay Asia Ltd (of Australia) that it "has received an off-market takeover offer from GHL Systems Berhad for a cash consideration of A$0.40 per share - valuing e-pay Asia at around A$22.8 million."
"e-pay Asia shares closed at $0.375 on Friday, with the stock trading as low as $0.135 in July this year. The offer price is a 6.67% premium. e-pay Asia shareholders have been offered an alternative to cash of 2.75 GHL shares for each e-pay Asia share held."
If you value e-pay Asia at A$0.40 apiece, then GHLSys would be valued at RM0.44 apiece. Presently, GHLSys is trading at 0.59 (as at 12.05pm)-- way above the valuation as per the share swap. For more, go here.
Surprisingly, GHLSys is not suspended.
[UPDATED: GHLSys was suspended on October 3 (here) for the announcement of multiple proposals including the acquisition of e-pay Asai (here).]
Chart 2: GHLsys's last 11 years performance
Table: GHLsys's last 11 years performance
Based on technical breakout, GHLSys could be a trading BUY.However, it must be noted that GHLSys is trading much higher than the value assigned to the stock as per the Australian acquisition.
Note:
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, GHLSys.
6 comments:
It was actually suspended from last Thursday afternoon till Monday morning
Hi Malaysia Stock Talk
Thank you for pointing out the error.
Hi Alex,
Can you kindly comment on Scomi?
Still in uptrend?
Thanks.
Hi Jim
Scomi's rally in Jul-Oct 2012 has passed. Now the stock is moving 'sideway' with resistance at RM0.45 & support at RM0.35. This 'sideway' movement could be an ascending triangle. Thus a breakout at RM0.45 could be positive while a breakdown at RM0.35-0.37 would be negative.
hi Alex, what's your view on Unisem. It's price to book is on historical low. .. worth holding for medium term? ?
Hi Stanley
I would rate Unisem a HOLD. It broke above its long-term downtrend line at RM1.00 in early July but it has since dropped back below the downtrend line. It however has strong horizontal support at RM0.80-0.82.
Unisem will have to seek new growth areas, away from the pc-related chips. If it can execute a successful diversification, like Gtronic, it will prosper. If not, it will continue to drift.
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