Friday 7 June 2024

Penny Stock Oceanus Group Roared Back To Life.

Recently on 29th May 2024, Oceanus Group announced a RMB 200Mil investment intention agreement with the Shaoxing Huangjiu Town local authority to help grow its alcohol distribution business in China. The town of Shaoxing is known since ancient times for producing yellow wine such as the famous "Nu Er Hong". This will give a boost to its future earnings via its already well established current distribution network painstakingly built up over the years. From this partnership, the local partner will import alcohol distributed by Oceanus, and on the other hand, Oceanus will help expand the distribution and grow the demand of yellow wine produced by Shaoxing.
1. Major Shareholder, Alacrity Investment Group, Mops Up Additional Shares from Market.
Alacrity Investment Group, the largest shareholder of Oceanus Group, has further raised its stake in Oceanus Group to express its vote of confidence in the future prospects of its investee. On 30 May 2024, it acquired 30 million shares for a total of $300,000 from the open market. The following day, it acquired another 25 million shares for $265,000. Following these two transactions, Alacrity now owns 4.43 billion shares or 17.25% of the company. The average price of the purchases is thus around S$0.01 per share. This seems to indicate that the major shareholder is extremely optimistic about the future of Oceanus Group.

2. Historical Oceanus Group Price Recap.
In 2022, Oceanus Group placed out additional 5.2 per cent of its existing share capital with Alacrity also taking part at S$0.023 per share. 

I recalled that in April 2021 I have ventured into Oceanus at S$0.038 per share and exited at around S$0.040 per share a few months later (Oct 2021). Interestingly, Oceanus Group went on to make losses despite initially getting out of the watchlist of SGX after its current CEO turn the business around. Its current prices has plunged to S$0.009 to S$0.01 per share this week.  

3. Financials
While Oceans Group is still making losses for its latest FY2023, it has managed to reduce its losses to <S$2.2Mil> relative to FY2022 staggering losses of <S$11.7Mil>. With the continuous growth in its trading business and topline revenue generation, FY2024 maybe the year of breakeven with some profits.

Parting thoughts
I think that Oceanus Group is roaring back to life with the results of the transformation work set in place for the past 4 years gradually surfacing. Hence I decided to take up a minor position in Oceanus Group again with 65,000 shares @ S$0.01 per share. Perhaps, Oceanus Group is finally ripe for harvesting. 

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