Adapt from the Questions and Answers for AGM 2020.
Changing its investment portfolio to a 100% allocation to equities within a year.
1) As at end 2019, our investment portfolio allocation was 66% to equity and 34% to fixed income. During the recent market correction, mDR took advantage of price volatility and was active in swapping bond exposure for equity exposure. The asset allocation as of May-end 2020 was 80% equity and 20% fixed income. mDR will continue to unlock liquidity from its bond portfolio to increase the equity exposure as the recession runs its course and we expect to have 100% allocation to equities within a year.
Next transformation phase into physical real estate with sustainable rental cash flow
2) The Group will continue to maintain the forward momentum to accelerate growth and create shareholder value and to improve its profitability, dividend and visibility. A financial crisis may present compelling distressed opportunities, in which case, the Group will work towards its next transformation phase into physical real estate with sustainable rental cash flow. The DMS and DPAS divisions will focus on maintaining their profitability, and will stay nimble and look for opportunities and additional revenue streams for expansion and growth. We expect mDR to have a stronger balance sheet and increased profitability in the next three to five years.
No further dilution to shareholders such as rights issue
3) The Company is not planning any rights issue or bonus warrants in the near future after the proposed consolidation of shares.
My takeover:
1) A share consolidation of 100 into 1 is positive. This will bring the outstanding shares from 90 Billion to 906 million shares. Post-consolidation NTA of $0.17. At pre-consolidation price of $0.001 , mDR is trading at 0.58x book value and at $0.002 , mDR will be trading at 1.18x book value.
The huge gap in valuation has possibly resulted in the poor trading sediments over the years.
2) The closest peer that i can relate or compare to, probably would be Global Investment.
Global investment is trading at 0.71x book value and 7% yield. mDR is trading at 0.58x and 3% yield before 2020.
Changing its investment portfolio to a 100% allocation to equities within a year.
1) As at end 2019, our investment portfolio allocation was 66% to equity and 34% to fixed income. During the recent market correction, mDR took advantage of price volatility and was active in swapping bond exposure for equity exposure. The asset allocation as of May-end 2020 was 80% equity and 20% fixed income. mDR will continue to unlock liquidity from its bond portfolio to increase the equity exposure as the recession runs its course and we expect to have 100% allocation to equities within a year.
Next transformation phase into physical real estate with sustainable rental cash flow
2) The Group will continue to maintain the forward momentum to accelerate growth and create shareholder value and to improve its profitability, dividend and visibility. A financial crisis may present compelling distressed opportunities, in which case, the Group will work towards its next transformation phase into physical real estate with sustainable rental cash flow. The DMS and DPAS divisions will focus on maintaining their profitability, and will stay nimble and look for opportunities and additional revenue streams for expansion and growth. We expect mDR to have a stronger balance sheet and increased profitability in the next three to five years.
No further dilution to shareholders such as rights issue
3) The Company is not planning any rights issue or bonus warrants in the near future after the proposed consolidation of shares.
My takeover:
1) A share consolidation of 100 into 1 is positive. This will bring the outstanding shares from 90 Billion to 906 million shares. Post-consolidation NTA of $0.17. At pre-consolidation price of $0.001 , mDR is trading at 0.58x book value and at $0.002 , mDR will be trading at 1.18x book value.
The huge gap in valuation has possibly resulted in the poor trading sediments over the years.
2) The closest peer that i can relate or compare to, probably would be Global Investment.
Global investment is trading at 0.71x book value and 7% yield. mDR is trading at 0.58x and 3% yield before 2020.
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