Vincent Tan’s Berjaya Corporation Berhad (KLSE: BJCORP, stock-code 3395) has attracted punters and speculators for the last 2 weeks with great interest. The stock price more than doubled since end of September 2007 when the stock breached the resistance level of RM0.52 confidently and never look back. FinanceTwitter had blogged about the stock earlier as I was curious since the data from Bursa that showed Vincent Tan had acquired shares from Berjaya Corporation as well as Silver Bird.

Season-players were not surprised with the soaring share price since Vincent Tan was known to be a master in frying his shares up during former premier Mahathir’s rule. Just before the local stock market close for the long holiday, Berjaya Corp announced that it had successfully clinched the franchise to operate the US-based Wendy’s International (NYSE: WEN, stock) burger chain in Malaysia.
Berjaya Corp reportedly plans to open more than 70 Wendy’s fast-food outlets in Malaysia over the next 10 years. Vincent Tan’s group already operates food and beverages brands such as Starbucks Coffee, Kenny Rogers Roasters, 7-Eleven and previously McDonald’s (sold in 2006 to McDonald’s Corp, NYSE:MCD). Of all his chains, perhaps the most successful and profitable is McDonald’s and Starbucks Coffee. In fact McDonald’s Malaysia is so successful that it surpassed Kentucky Fried Chicken as the most preferred fast-food place to hang-out for youngsters and families, at least me.

Die-hard fans of Vincent Tan would have made handsome gains if he/she had invested in Berjaya stocks. Supposing if you had bought only 3,000 shares of now-privatised Berjaya Capital which was traded at below RM1.00 a share, he / she would have ended up with over 18,000 shares of Berjaya-Corp-ICULS plus the over RM2,000 from the disposal of the remaining Berjaya Capital (720 shares to be precise) to Vincent Tan. That 18,000 shares of BJCORP-ICULS is today worth RM0.55 a share based on Friday’s closing stock price bringing the holding to RM9,900.00. Add this to the above RM2,000 and you ended up with RM11,900.00 – a whopping 296 percent profit.

But does the story of Berjaya Corporation stops here (with Wendy’s International)? I doubt so and I think Berjaya Corporation still has rooms for growth (punt). While the main BJCORP’s shares are still relatively cheap at RM1.08 per share, its ICULS is the one that attracted the punters since it costs only RM0.55 per share with the expiry only in 2015. Of course I’m talking without taking fundamental into consideration.
Another reason why I think the story has not comes to an end is the fact that Vincent Tan has continuously acquiring BJCORP shares, the latest being the filing on 12th Oct 2007, yesterday. It appears the tycoon had increased its direct stake to 31.92 percent. His acquisitions via conversion of ICULS are at the price ranging from RM0.908 to RM1.00 per BJCORP shares.

Let’s fantasize and assume Vincent plans to achieve at least 100 percent profit. That means somehow BJCORP stock prices need to be pushed up to RM2.00 a share and with such the ICULS will worth at least RM1.00 a share. Who said stocks punting is difficult? Trade at your own risk.

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October 13th, 2007 by financetwitter

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