Maxi-Cash Financial Services Corporation

[CityFarmer]

The SGX announcement shows Koh Wee Seng (Non-Executive Chairman), purchase another of 700 lots shares today @ S$0.405, with PE of ~40x

With closing price of S$0.44 today, historical PE is ~44x (base on FY2011 ~1cts EPS) and PB of more than 2.

IMO, With insiders buying, and assume Chairman Koh is an astute businessman, pawnshop biz model should have sufficient merit to pursue.

Having said so, i still do not feel comfortable with the valuation given.

Excluding Aspial's shareholding of 81.08%, free float for Maxi-Cash is at a mere 18.92%. Till date, Mr Koh holds 1.31% in direct stake. Effectively, he takes up 6.92% of the remaining free float.

If he continues to buy share and reduce the free float, he is going to become very rich.

IIRC, the free float should be kept above 15%, so i believe Koh can not buy beyond that.