Tuesday 8 January 2013

YTL Power - 2012 shareholding change in review.

EXECUTIVE SUMMARY

  • YTL + family cumulatively disposed of 233M warrants (WB) and 24.4 M shares of YTL Power in the period between March to July 2012.
  • EPF's net disposal for the year since March 2012 is approximately 13.5M shares, this pale in comparison.
  • Large amount of discounted warrant (733M was offered for sale) traded since Oct has continued to weigh on the price of YTLP since trading.
  • Share price has recently show some strength, coincidentally showing purchase by a director's spouse.
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During the past 12 months, YTLP declined from RM1.86 before hitting a trough of RM 1.50 (18/12/12) before recently rebounding past RM 1.60. I have been bullish on the fundamental of YTLP since 2011 and have sat through the volatility in the past 12 months.


Since my last post, I've had the opportunity to digest various market observer's comment on the price decline of YTLP - thanks for the food for thoughts.

Case against Privatisation

Given the privatisation of YTL Cement earlier this year through a share swap and Francis Yeoh's repeated broadcast of his desire to privatise YTLP, I was suspicious about a possibility of a similar privatisation through share swap involving YTLP.

However, Felicity has pointed out a very obvious fact that it is unlikely for YTL to dispose off the warrant into the market then buying it back within a short period. Yeah, they are not stupid people.

It was interesting looking at the analysis after the fact.

Price movement vs Shareholding movement

Firstly, let me apologise for the indicators on my graph - if anyone have a suggestion for a software for Mac to do a better job in editing the graph - I am all ears!

I've extracted some raw shareholding change information here.





Looking at the information extracted a few events was notable to me:
  • Event A - Francis Yeoh disposed off 21 Millions share in YTLP @ approximately RM 1.83
  • Event B - Between 26/3/2012 to 21/5/2012 - YTL Corp disposed off a total of 231,526,365 YTLP-WB at price range of approximately RM0.63 to RM 0.39. 
  • Event C - Short rebound, director and spouse disposed off 3,393,541 YTLP shares and 1,450,000 WB
  • Event D - 18 Sept, offer for sale to YTL shareholder WB of YTL at RM 0.20 (61% discount to 5dwa). (Initial announcement on proposal made May 29)
  • Event E - Trading of YTL post WB entitlement, reaching a support of RM1.50.










Other notable event?

- There was notice of various grants of options in August with acceptance date of option in June.
- A spouse of director has recently began acquiring YTLP shares at around RM 1.53- RM 1.59, after disposing the same share in June/July for around RM 1.76-RM1.80.
- Total disposal by EPF between 1 March 2012 to 31/12/2012 is 13,459,400 shares in YTLP. This pale in comparison with the 24 million shares and 233 million WB disposed off by YTL and family.

Conclusion
- There was an unusually large amount of disposal of warrants/share by YTL+family in the first half of 2012 that led to decline in YTLP shares/WB price.
- Subsequent to entitlement of discounted warrant by YTL shareholder on 2 Oct 2012, price of its mother share continued to decline before finding a support @ RM1.50.
- Insider has began acquiring YTLP shares at approximately RM 1.53 - RM1.59 after disposing it earlier.

Note (joke): To me the fact that a spouse of a director acquiring the share of YTLP seems to be a very Malaysia specific buy signal. (After assessing the fundamental).



10 comments:

  1. If you read YTL corp annual report 2012, you will notice that Yeoh family has exercise ~150 million of options into shares. That exercise costed them around 150 million ringgit.

    They needed to increase their holding in YTL corp after diluting their shareholding at YTL cement acquisition.

    My theory is that they sold YTLP shares/warrant to raise fund for option exercising. After all, they have a pretty strong grip on YTLP by controlling ~56% of the shares.

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  2. I've not analysed in depth their shareholding at various date, but I suspect they've got a firm control of its various listed vehicle - I will look into it.

    Your point:-
    1) Increase YTL corp holding following dilution done by YTLC privatisation - agree, last observed they are actively buying back shares.
    2) Selling YTLP w/s for option exercising - YTL Berhad is the vehicle doing the disposal of warrants, while YTL Family is acquiring and exercising the options. I suspect 150M is a drop in the bucket for them and this whole charade over past year serve a different purpose.

    Still trying to piece together possible rationale;
    Initial suspicion was privatisation attempt akin to YTLC exercise, however given the dilution done to family's holding in YTL and discounted sale - unlikely.

    More plausible, sale of discounted warrants to shareholder (including family) allowing them increase holding on private capacity of YTLP post option exercise. I am not sure what's the takeup rate of the option among those entitled. But will investigate.

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  3. Thanks for the food for thought.

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  4. No, you got me wrong. Francis Yeoh sold his entire direct stake on YTLP (mother share, not warrant)for 40 millon.

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  5. regarding to EPF shareholding, I think that you got the number wrong.

    At 31 March 2012, EPF have 756,320,311 share
    now, they have 652,198,666 share.

    ~100 million shares has been sold by EPF during that period of time.

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  6. ET,

    FY should still have 945k in YTLP based on 1/3/12 after his disposal, I didn't note any further disposal during the year.

    EPF holding was extracted based on announcement below made on 1/3/12 - just double checked, should be accurate. Where did you get the 756M holding?

    http://www.bursamalaysia.com/market/listed-companies/company-announcements/744945

    My arithmetic might be abit off, should have included the 500k in the total disposal, but that is immaterial overall to analysis.

    Thanks for checking, was extracting quiet a few data, any mistake spotted is appreciated.

    I can't speculate what the YTL family is up to, trying to come up with plausible reason but just noting the price pressure placed on the mother share by all these unloading (which hopefully ended).


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  7. It is from 31 March 2011, when EPF started to change from accumulation mode to disposal mode. I got the year wrong. Apologized for that.
    http://www.bursamalaysia.com/market/listed-companies/company-announcements/403114

    Francis has exercised his 7 million option to share
    http://www.bursamalaysia.com/market/listed-companies/company-announcements/1043157

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  8. just done some search

    EPF has actually disposed ~32m in the last three months.

    on 1st Oct 684,990,466 shares

    http://www.bursamalaysia.com/market/listed-companies/company-announcements/1081413

    now 652,198,666 shares

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  9. ET - the option is accepted but I don't think it's exercised yet... check out their annual report for the cumulative option grants.

    EPF is a big elephant in the room too, will look at their impact on market. Thanks for the heads up.

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