Tanco-WC Is Trading at a Discount – What It Means for YOU

Tanco Holdings Berhad has been delivering stellar share price performance, especially with its share price climbing steadily and now approaching the RM2.00 mark. But while the mother share is gaining traction, its warrant, TANCO-WC (stock code: 2429WC) has become a hot topic for a different reason: it's currently trading at a discount, something that doesn’t happen often in the warrant market.

Technical price chart of Tanco Holdings Berhad

To break it down simply, a warrant is like a ticket that lets you buy the company’s actual share (the “mother share”) at a fixed price, known as the strike price, before a specific expiry date. In the case of TANCO-WC, the strike price is RM0.31, and the warrant expires on 25 August 2025. That means you can buy one Tanco share for RM0.31, as long as you hold one unit of the warrant and convert it before that expiry date.

Here’s where things get interesting: the warrant is currently trading around RM1.62 to RM1.63, and the actual Tanco share is worth RM2.03. If you were to buy one unit of the warrant at RM1.62 and then pay RM0.31 to convert it into a mother share, your total cost is only RM1.93, cheaper than buying the mother share directly at RM2.03.

That’s a RM0.10 difference, or roughly a 5% gain if you were to sell the share immediately. In simple terms, it’s like buying something at a discounted rate and instantly being able to sell it for more.

This situation where the total cost through the warrant is lower than the actual share price, is what’s known as a discount in the market. Usually, warrants trade at a slight premium because of their time value and potential upside. But when a warrant trades at a discount, it opens up an opportunity for investors to make a profit if they act smartly and quickly.

Investors can benefit in a couple of ways. One option is to buy the warrant, convert it into a mother share at RM0.31, and sell that share at the market price. The other is to trade the warrant itself, its price is likely to rise as Tanco’s share price climbs, so there could be capital gains just by holding and selling the warrant without converting it. Because the warrant is cheaper than the mother share, it also allows more flexibility for investors with limited capital, giving them exposure to price movements at a lower entry cost.

With Tanco showing strong momentum above RM2.00, the warrant’s discounted pricing may not last long. For those familiar with how warrants work, this might just be one of those windows of opportunity worth considering.

$TANCO / 2429 (TANCO HOLDINGS BERHAD)