Albedo

Albedo: Soared 23% from a very low base to $0.016 following its proposed acquisition of a 51% stake in a Taiwanese aesthetic medical group, China iMyth Company (CiC), for $18.9m to diversify into China's fast growing healthcare market.

CiC was formed in Apr '15 to assume the medical operations of iMyth Aesthetic Medical Group (iAM), established in 2008 and led by Taiwan's plastic surgeon Dr Chung Yih-Chen, which runs a flagship specialist health and beauty clinic in Taipei, as well as orthopedic surgery hospitals in Shanghai and Zhengzhou and provides medical services in Guangzhou. Dr Chung will hold the remaining 49% of CiC and become its Managing Director.

The vendors of CiC are Dato Dr Choo Yeow Ming, Qiang Lin Mei and Prometheus Partners. Dato Choo was previously the introducer of an earlier failed RTO deal involving the injection of land parcels in Iskandar Malaysia by Tan Sri Dato Danny Tan.

The consideration of $18.9m will be satisfied via $12m in cash and 550m new Albedo shares at 1.25¢ apiece, which will result in Dato Choo and Qiang each owning 11.2% of the enlarged capital of Albedo.

In connection to proposed acquisition, Albedo will issue 100m free unlisted and non-transferrable warrants with an exercise price of 1.125¢ to introducer Oei Siu Hoa. Additionally, the group will also issue 840m unlisted and non-transferable warrants to four new investors at 0.1¢ each, with the same exercise price.

While the proposed deal would enable the group to diversify from its loss-making steel distribution business and mark its entry into the aesthetic beauty market in Taiwan and China, investors ought to take note that Albedo is no stranger to ditched deals.

Pending an independent valuation and details on the financial track record of iAM, it is difficult to ascertain the merits of the deal. Despite its low price, the counter currently trades at 3.1x P/B, given its equity base of $9.7m as at Mar '15.