Round Hill Music Royalty Share Discussion Threads

[dropside] 14/3/2012 16:50

Nope, I'm here too - had a spell of talking to myself on here previously!

Its an odd pattern, nothing at all for a while then a real buying hit out of the blue - big money going in very fast.

Takeover? possibly, certainly someone thinks it is worth their while to build a big stake in here.

[topinfo] 14/3/2012 16:16

Only me here? Look at all the buying in last 35 mins. All ATs too. Takeover????????

Plus that 300k buy other day at 45p says it all, someone knows something IMO

[topinfo] 12/3/2012 14:45

Lawson

Red Hot would then be a holding company with a 68% stake in Founder Berhad worth £29m. If we divide that by Red Hot's 36.6 million shares we get within a penny of Cheong's target price of 80p.

Looked at another way, RHM will hold 710 million shares in Founder Berhad post the transaction. Today, Founder's shares trade at RM0.175. Multiply that by 710 million and we get a figure of £26.2m, equivalent to 72p per RHM share, which is within 10% of Cheong's target and some 32p above the London price of RHM.

Either way, it looks as if local Malaysian investors can recognise a good business, and are ahead of the game here. What is more, Cheong Chia Chieh promised that there would be some more good news later this year. I'll keep you up to date.

[topinfo] 12/3/2012 14:34

300k buy RHM at 45p thats well over offer and thats £135k sterling!!!!!!!!!!!!!

[topinfo] 05/3/2012 08:43

RHM (RED HOT MEDIA)

1st Match 2012 by Tom Bulford



I'm not proud. I'll go anywhere to get a story. So last week found me in the Rivoli bar of the Ritz Hotel, Mayfair. I sat there, marvelling at the £6 cost of a thimbleful of cranberry juice and resenting the waiter's sniffy insistence that I should wear a proper jacket.

My mood, though, was lifted by the gentleman across the table.

His name is Cheong Chia Chieh and he was beaming from ear to ear.

In a series of visits to the UK he has been conducting a charm offensive designed to boost the share price of a business of which he owns 22%. And he told me that his efforts are working. The share price of his company has recovered by 60% from its October trough, and trading volume in this once moribund counter is lively.

Now the shares trade at 40p, but if Cheong has his way they will soon be at 80p. I have covered Red Hot Media in Penny Sleuth before, but let me tell you Cheong's story.

How to blow a bundle in Malaysia – and get nothing back

Cheong, a Malaysian, used to work for Nanyang Press Holdings, publisher of the Nanyang Siang Pau. Launched in 1923, it is the oldest Chinese language newspaper outside the mainland. One thing he learned in his time there was that advertisers spent plenty of money without having much idea of what they are getting for it. As the nineteenth century American merchant John Wanamaker put it, "half the money I spend on advertising is wasted; the trouble is I don't know which half".

This is particularly true when advertisers venture into foreign climes. Cheong observed foreign companies attempting to target the Malaysian consumer simply by appointing an international ad agency and throwing money at the problem. He reckoned that he could offer something better. So when Nanyang's owner MCIL went public, Cheong took the chance to buy out part of the business along with a partner with the initials 'RH' (from which was derived the wonderful and unforgettable name 'Red Hot' Media!).

Revenues have doubled, so why haven't share prices followed?

Today, Red Hot offers what Choeng calls "results based marketing". To be honest, I am not sure that this is so very different from conventional marketing, but Red Hot does claim a better knowledge of the route to the Malaysian consumer, and it has built a substantial local market share.

In the last four years, Red Hot has grown its revenues from RM19.3m (Malaysian Ringgit) to RM44.3m (that's about £9.2m) – and its pre-tax profit from RM2.2m to RM9.2m (c. £1.9m). If the forecasts of Allenby Capital prove to be correct there will be no let-up in this rate of growth.

But Red Hot's share price has so far failed to reflect this rude health. This is due to an innate UK investor suspicion of anything east of the Thames estuary, and to RHM's somewhat eccentric approach to investor relations. But also muddying the waters is a proposed deal that will see Red Hot inject its entire operating business into Founder Berhad in exchange for a 68% stake in the latter. Could this all lead to the change needed?

Founder Berhad is the Malaysian-listed arm of a major Chinese conglomerate, the Founder Group, which is involved in technology and financial services. Founder Berhad is a developer of fingerprinting security systems and "a renowned provider of IT solutions". It made a profit after tax of RM763,000 in 2010. Adding this to RHM's 2011 post-tax profit of RM10.5m (as forecast by Allenby), we get a combined number of c.RM 11.3m, rising to c. RM13.6m for 2012. Placing this on the price/earnings (P/E) ratio of fifteen that Choeng thinks is appropriate would value the business at RM204m, or £43m.

Red Hot would then be a holding company with a 68% stake in Founder Berhad worth £29m. If we divide that by Red Hot's 36.6 million shares we get within a penny of Cheong's target price of 80p.

Looked at another way, RHM will hold 710 million shares in Founder Berhad post the transaction. Today, Founder's shares trade at RM0.175. Multiply that by 710 million and we get a figure of £26.2m, equivalent to 72p per RHM share, which is within 10% of Cheong's target and some 32p above the London price of RHM.

Either way, it looks as if local Malaysian investors can recognise a good business, and are ahead of the game here. What is more, Cheong Chia Chieh promised that there would be some more good news later this year. I'll keep you up to date.

• This article is taken from Tom Bulford's free twice-weekly small-cap investment email The Penny Sleuth. Sign up to The Penny Sleuth here.

Information in Penny Sleuth is for general information only and is not intended to be relied upon by individual readers in making (or not making) specific investment decisions. Penny Sleuth is an unregulated product published by Fleet Street Publications Ltd.

[dropside] 30/12/2011 12:59

Some massive trades gone through recently, £117K at 33.5p on 28 Dec and on 23 Dec and a £90K yesterday at 36p. Must be due an RNS about holdings?

[dropside] 26/9/2011 18:41

And there they are. Big increase in revenue but look to be taking a margin hit to achieve it. Bullish forecast for the second half.

[dropside] 21/9/2011 19:14

windass - thanks!

[windass] 21/9/2011 16:48

Interims due next week

[dropside] 18/9/2011 19:28

Interims were 24 September last year. Maybe we will get them this week?

Maybe I am talking to myself lol!?

[dropside] 25/8/2011 19:58

So about £1m worth of business being announced in todays rns. If they have their usual good margins that is not to be sniffed at.

[dropside] 27/7/2011 19:49

Got a strong recommendation on this from my broker today and bought in. He has never let me down yet! Always a first time I guess lol. Very undervalued on fundamentals - profit and cashflow.

[mcamikeb] 05/7/2011 13:33

Sorry beagle - been busy. My opinion hasn't changed. A well positioned company with a fairly attractive valuation. Some more news from the company would help bring in new investors I'd expect - so let's hope the CEO has taken on board all this recent trading activity and sees the benefit of keeping the market frequently informed.

[the_beagle] 05/7/2011 08:57

MCAMikeB......Are you still around? Your header was very optimistic when the share price was 70p plus. What is your view now please?

[the_beagle] 05/7/2011 08:31

Thank goodness for that!

Hopefully a fund, having taken a bundle at 40p, will now up the anti a bit and buy some in the market.

The fall was all down to one forced sell as far as I can see, so we could bounce 50% from here, especially if there is news on a Far East listing as rumoured.

[double6] 05/7/2011 08:24

....at last!

[the_beagle] 01/7/2011 08:10

And another 200k placed. 300k ? to go then we could see some rise I think.

[the_beagle] 30/6/2011 08:41

200k buy at 40p. Still a load of stock to clear (500k?) but once it goes there should be a good bounce imo.

[the_beagle] 28/6/2011 14:17

A bit of action at 40p. Good to see.

[mcamikeb] 21/6/2011 21:31

Beagle - cool your boots man. This stock was unheard of a month ago. It takes time to create a loyal support base in the City, especially if you have the Asian Discount on your back! Let's give them some time to deliver the goods - they must have had a reason for coming to London last week. And at the very least, 40 pence still looks very cheap for a profitable, expanding media company, whose home market has strong GDP growth. Liquidity is at an all time high and the more that buy in, the narrower the spread and thus the cycle repeats itself. I'm holding for now and may top up if we get more news.

[the_beagle] 21/6/2011 12:17

And straight back down again on no reported trades! Why did I bother with this!!!

[aishah] 21/6/2011 10:18

overhang gone perhaps - don't see any reason for it to stay at this level otherwise.

[the_beagle] 21/6/2011 10:01

Up 8% on a 2k reported buy! This could fly anytime imo.