Share price increased 107.9% to close at 13.1 cents today, compared to 6.3 cents as at the close on last Friday, 6 September 2013. The volume of Shares traded today was 103,567,000 Shares.
SGX Query 2:
Are you aware of any other possible explanation for the trading?
Company’s Response 2:
We are not aware of any information that had not been previously announced on 2 September 2013 regarding the aircraft leasing business. The seven (7)-paged announcement contained a comprehensive explanation on the aircraft leasing business. The possible explanations could be the following:
(a) The market has taken some time to evaluate, assess and understand the aircraft leasing activity of the Company and its subsidiaries (the “A-Sonic Group”);
(b) After evaluation and assessment, the market might have particularly taken into consideration the following points:
(i) The A-Sonic Group’s aircraft leasing business is unique in that it starts from the acquisition of pre-owned airframe, assembling, retrofitting and/or upgrading of the
interior and systems, into airworthy and serviceable aircraft;
(ii) To the best of our knowledge, there is no competitor in Singapore that engages in the aircraft leasing of the aircraft type which includes the assembly of the airframe, the aircraft engines, and the retrofit of the aircraft that the A-Sonic Group is involved in;
(iii) The A-Sonic Group had fully financed the acquisition of airframe, aircraft engines and components through internal resources. This indicates that cash out-flow has been accounted for, and hence the leases should result in positive cash flow for the two (2) aircraft which have been leased out;
(iv) Another two (2) aircraft are at the final stage of being leased out;
(v) With letters of intent signed to acquire another seven (7) airframes, one (1) aircraft and
three (3) aircraft engines, these indicate potentially that, the A-Sonic Group may have the capability to sustain the aircraft leasing business and develop the economies of scale;
(vi) The future potential spin-off from the aircraft leasing business includes the following:
- One of our lessees has appointed us as an exclusive vendor and provider for aircraft parts and system (“Aircraft Parts & Systems”); and
- To be one of the pre-qualified logistics and reverse-logistics service providers for our lessees in respect of their logistics requirement for the aircraft engines and Aircraft Parts & Systems.
A-Sonic Aerospace has lost its boom, closing at 9.2 cents.
I struggle to understand why it's a hot stock.
1H2013 profit before income tax of US$0.999 million could have turned into red ink if not for a US$2.566 million "realized gain resulting from the partial divestment of the air cargo management business unit."
The operating business is struggling. Can anyone enlighten me as to what I am missing?
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