$ANCOMLB / 0048 (ANCOM LOGISTICS BERHAD): A Green Company Ahead

$ANCOMLB / 0048 (ANCOM LOGISTICS BERHAD) used to be a RTO target of S5 Holdings Inc. and now it's going to turn to become a homegrown environmental solutions company. How is it going?
1. ANCOMLB proposed to acquire the entire share capital of Green Lagoon Technology Sdn Bhd for RM120mil.
2. RM120mil would be raised through issuing 1billion shares at the issue price of RM0.12/share.
3. This acquisition will provide profit guarantee of at least RM8mil PAT for first year and RM10mil PAT for second year. Any shortfall will be compensated by vendors in cash.
4. At the same time, ANCOMLB proposed private placement of 183.33mil shares to $KLSE-ANCOMNY with RM0.12/share, totalling of RM22mil.
5. ANCOMLB proposed to dispose all of its subsidiaries to ANCOMNY in cash settlement.

After the successful disposal and acquisition

1. ANCOMLB would become a homegrown environmental solution company, as Green Lagoon specialises in the design, construction, operation and management of biogas plants, effectively transforming waste into valuable resources.
2. The number of shares will increased to 1.47bil from 473.29mil. (No wonder share price dropped)
3. PAT guarantee of RM8mil is definitely good in changing the company's financial from loss to profit.
4. This is going to make the company's EPS become RM0.0054, P/E based on current share price would be 33.33x. (Not cheap)
5. The second year EPS would be RM0.0068 and P/E would be 26.47x. (Still not cheap)
6. Cash position is expected to be increased after sold the subsidiaries.

After shares enlargement

1. Share price might correct to RM0.14.
2. P/E for first year would be 25.93x and second year would be 20.59x.