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22-05-2012, 07:52 AM
A punter's favourite. Can the Company pick itself up and show consistent earnings?
The Straits Times
May 22, 2012
JEL hopes to get off SGX watch list soon
Penny stock has paid debts and reported $4.7m profit in first quarter
By Anita Gabriel
JEL Corp has settled its debts and clawed its way well into the black in the latest quarter with a plumped-up kitty.
Now the penny stock sweetheart expects to climb off the dreaded Singapore Exchange (SGX) watch list very soon.
The distributor of consumer electronics products such as Apple and Fujifilm recently received an extension until next March from the SGX to shape up or face being delisted. But it may not have to wait that long.
'We will soon be in a position to apply for removal from the list. It will likely happen shortly as we've met the criteria in terms of profitability for fiscal year 2011, and soon, will meet the one on market capitalisation,' said Mr Gilbert Ee, JEL's chief executive and controlling shareholder with a 32.6 per cent stake.
For the first quarter ending in March this year, the firm said it made a net profit of $4.7 million, up from $100,000 last year, largely from gains from a scheme of arrangement completed in February and improvement in operations. Revenue rose by 23 per cent to $27.8 million.
With that, the firm, to be called GSH Corp starting on Thursday, appears on track to rebuild its business and explore new ventures.
Playing an integral role in the firm's turnaround story is food tycoon Sam Goi, widely known as the 'Popiah King', whose 15 per cent stake is set to get bumped up to 58 per cent soon.
Mr Goi will pump some $14 million into the mainboard-listed firm through the subscription of two billion new shares at 0.67 cent apiece. Then, Mr Ee's stake will be reduced to 14 per cent. The proposal is pending shareholder approval. Mr Goi has also sought a seat on the board.
'While he has invested in many companies, he doesn't sit on their boards, except for Super Group. He's here for the long term,' said Mr Ee at a media briefing here on the firm's recovery plan and outlook yesterday.
JEL completed a rights issue that raised $5.3 million in February which was used to repay debt. On completion of the second cash call, Mr Ee said the firm will have $37 million in net assets, zero debt and $20 million in its coffers.
JEL plans to expand its product range while exploring new businesses by tapping Mr Goi's wide contact base. The firm expects to soon distribute information technology products made in China in markets where it already has a presence, such as Central Asia, the Middle East and Indochina.
'We are also expanding our product range to medical imaging products and medical consumer goods which have higher margins of between 10 per cent and 20 per cent.'
Mr Ee, a former banker who took over the helm of the firm in mid-2007 and has since slashed costs by half, said the firm will announce its foray into a new business by next quarter.
In recent months, JEL has been a magnet for punters and syndicates looking for a quick gain amid an adrenaline rush for penny stocks. It is a regular in the 'most actives' list in the market.
In the year to date, the ultra penny stock has risen 15 times to 0.6 cent. On April 25, over one billion JEL shares changed hands, a rarity for a single counter.
'I was aghast but I can't help it if speculators get in. At that time, the stock was fairly illiquid, which attracts speculators as the price can move (easily). We can't prevent people from buying and selling our shares. We are what we are - a penny stock,' said Mr Ee.
anitag@sph.com.sg
The Straits Times
May 22, 2012
JEL hopes to get off SGX watch list soon
Penny stock has paid debts and reported $4.7m profit in first quarter
By Anita Gabriel
JEL Corp has settled its debts and clawed its way well into the black in the latest quarter with a plumped-up kitty.
Now the penny stock sweetheart expects to climb off the dreaded Singapore Exchange (SGX) watch list very soon.
The distributor of consumer electronics products such as Apple and Fujifilm recently received an extension until next March from the SGX to shape up or face being delisted. But it may not have to wait that long.
'We will soon be in a position to apply for removal from the list. It will likely happen shortly as we've met the criteria in terms of profitability for fiscal year 2011, and soon, will meet the one on market capitalisation,' said Mr Gilbert Ee, JEL's chief executive and controlling shareholder with a 32.6 per cent stake.
For the first quarter ending in March this year, the firm said it made a net profit of $4.7 million, up from $100,000 last year, largely from gains from a scheme of arrangement completed in February and improvement in operations. Revenue rose by 23 per cent to $27.8 million.
With that, the firm, to be called GSH Corp starting on Thursday, appears on track to rebuild its business and explore new ventures.
Playing an integral role in the firm's turnaround story is food tycoon Sam Goi, widely known as the 'Popiah King', whose 15 per cent stake is set to get bumped up to 58 per cent soon.
Mr Goi will pump some $14 million into the mainboard-listed firm through the subscription of two billion new shares at 0.67 cent apiece. Then, Mr Ee's stake will be reduced to 14 per cent. The proposal is pending shareholder approval. Mr Goi has also sought a seat on the board.
'While he has invested in many companies, he doesn't sit on their boards, except for Super Group. He's here for the long term,' said Mr Ee at a media briefing here on the firm's recovery plan and outlook yesterday.
JEL completed a rights issue that raised $5.3 million in February which was used to repay debt. On completion of the second cash call, Mr Ee said the firm will have $37 million in net assets, zero debt and $20 million in its coffers.
JEL plans to expand its product range while exploring new businesses by tapping Mr Goi's wide contact base. The firm expects to soon distribute information technology products made in China in markets where it already has a presence, such as Central Asia, the Middle East and Indochina.
'We are also expanding our product range to medical imaging products and medical consumer goods which have higher margins of between 10 per cent and 20 per cent.'
Mr Ee, a former banker who took over the helm of the firm in mid-2007 and has since slashed costs by half, said the firm will announce its foray into a new business by next quarter.
In recent months, JEL has been a magnet for punters and syndicates looking for a quick gain amid an adrenaline rush for penny stocks. It is a regular in the 'most actives' list in the market.
In the year to date, the ultra penny stock has risen 15 times to 0.6 cent. On April 25, over one billion JEL shares changed hands, a rarity for a single counter.
'I was aghast but I can't help it if speculators get in. At that time, the stock was fairly illiquid, which attracts speculators as the price can move (easily). We can't prevent people from buying and selling our shares. We are what we are - a penny stock,' said Mr Ee.
anitag@sph.com.sg
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