This is a long awaited move from us.
We have finally decided to arbitrage our position.
Pentamaster Corp Bhd on Bursa for Pentamaster International on HKEX.
Pentamaster Corp Bhd had been the most phenomenal investment for us for the past 5 years or to be exact for our whole investment career. Our average price is MYR 0.27 and we are selling it at MYR 5 giving us a 18x bagger for the past 4 years.
Pentamaster Corp Bhd has been the reason why we started Unrecognised Growth Investing.
If there is nothing to buy, we would be most reluctant to sell Pentamaster Corp Bhd even at 50x PE.
The reason is that it is just so tough to find another company which we could see into the future with. In addition, our purchase price is so low that it will take a total fraud to wipe us out of a decent return.
But with the chance to buy essentially the same company - Pentamaster International at 12x PE, we had harden our heart that it is something we must do NOW.
Pentamaster Corp Bhd derive most of their revenue from Pentamaster International.
The initial idea is that by listing Pentamaster International on HKEX, Pentamaster International may get some exposure from the listing but it seems that it has only created a pricing difference between the two counters.
We will be removing our initial purchase of Pentamaster International from our 2020 3Q/4Q pick as it has just become our arbitrage move.
So long Pentamaster Corp Bhd and welcome Pentamaster International.
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