Not too many things have been going right for Yongnam Holdings Ltd (&ldquo Yongnam&rdquo ) over the past few years with seemingly one bad news after another.

For instance, it announced on 31 May 17 that it had recorded 3 consecutive years of losses and only avoided being placed on SGX&rsquo s watchlist by virtue of its larger than $40 million market capitalisation.
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This follows a dismal showing in the last full financial year of 2016 when it recorded a whopping loss of $31.6 million, matching its largest since listing in 1999, and a far cry from its heydays of FY2009 to FY2012 when it was generating more than $40 million in net profits in each of those 4 years. Its future prospects also look challenging as its order book dwindled to $218 million as at 31 March 17, just slightly more than half what it was at the end of 2014. 

Even an attempt to raise funds amounting to $33 million via a rights issue in 2016 was met with poor response. Despite the rights being priced at a significant discount to Yongnam&rsquo s closing share price just prior to the rights issue announcement, its own shareholders only took up 36% of their rights entitlement. The fund raising was eventually saved by the 33% excess rights application (including 23% by its CEO Seow Soon Yong as per undertaking) with its underwriter CIMB picking up the rest.
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Not surprisingly, its share price has been battered. At the last close of $0.235, it is trading close to a level last reached in the 2008-2009 global financial crisis and at about a 63% discount to its NTA backing. 

New Substantial Shareholder emerging

Despite the ongoing challenges, Yongnam has curiously managed to attract a new substantial shareholder, Mohamed Abdul Jaleel, in recent months. Mr Jaleel&rsquo s initial substantial interest appears to have been a result of CEO Seow&rsquo s post-rights issue put and call arrangement with CIMB to acquire the underwriter&rsquo s 49.4 million shares at the then rights issue price of $0.21 per share. Of these, 23.5 million share options were still outstanding until early February when Mr Jaleel coincidentally filed with SGX an increase of his holdings by the same number of shares acquired at $0.21 each. He subsequently made 2 other off-market purchases, raising his holdings to 36.5 million shares for a 7.7% stake.  

Rest of article in the link:  http://stockresearchasia.com/latest-recommendations/yongnam-holdings-ltd-all-eyes-on-mega-mrt-depot-project