Catcha Media: The company which only cares about revenue but forgot that it lost money?!

If you are a shareholder of Catcha Media, try reading the below announcement.

Catcha Media Records Revenue Growth in 2011
Kuala Lumpur, Malaysia; 29 February 2012 - Catcha Media Berhad (“Catcha Media”) today announced its results for 2011, with revenue for Q4 2011 increased by 26% as compared to Q4 2010. This follows its previous announcement that its Q3 2011 revenue also showed an increase of 20% as compared to Q3 2010.

Said Mr Patrick Grove, CEO Catcha Media, “After experiencing growth through 2011, it is very exciting to see our business grow in Q4 2011 by another 26% as compared to Q3 2010. The internet and new media environment is moving very rapidly, and we are glad Catcha Media is remaining at the forefront of the industry.”

He continued, “Moving towards 2012, we anticipate even better financial performance, with significant growth in our e-commerce revenues. We are well positioned after a year of achievements and investment in 2011 to capitalise on the growth in the online and new media industries through the coming months and years, and have positioned us to expand in the new year. The overall operating result of the company for 2011 was affected by a number of non-recurring, one time charges and are natural for a new public company, though we are extremely pleased to have the company continuously growing at such an impressive rate.”

Catcha Media recently entered into an agreement to acquire Malaysia’s leading car classifieds website, Carlist.my. This acquisition came not long after the successfully completion of the acquisition of Hauteavenue.com, a leading luxury flash sales website. These acquisitions, coupled with the existing market-leading position held by Catcha Media including exclusive partnerships to operate Microsoft’s online properties in Malaysia and Lowyat.net, gives the company almost 10 million Malaysian online customers and users on a monthly basis.
- end -
Issued by:
Catcha Media Berhad


Note the word "revenue and growth" mentioned few times. BUT, where is the word loss or profit?

Then look at the financial performance for FY2011 below. I think they forgot that if you mentioned revenue and growth and things look so nice and dandy, then you forgot to tell your investor you carry losses for the period.

Is this a case of misreporting and misleading the shareholders? Can SC please look at this? Call a spade a spade, do not try to mislead investors!

Serious Investing!

Bonia: Is there something interesting?

There is a saying, "Better late than never." I have to admit there is a stock with which I always have interest in following - value stock priced (7x to 8x PE), good growth potential (double digit growth), consistently good management decisions and sound business acumen among its top management - Bonia!

However I have to admit that while every time I looked at its potential and financial results there is this sense of unbelieving, but I could not find fault in them. Cashflow is good, P&L and Balance Sheet strong, receivables believable. So what is wrong there? I think probably because when looking at the Bonia's line of products, maybe I am not one who would buy them. That's it. The products are not to my taste. Slap me please then!

Look at its performance:

There is not much you can fault the management. Current market capitalization of below RM450 million and projected profit after tax of more than RM72 million for FY2012. After acquisition of Jeco, besides Bonia's main house brand of Bonia and Sembonia, they now have Braun Buffel, Renoma, Pierre Cardin in the Asian market. While I may not be quite particularly excited over the last 2 brands in the list but Braun Buffel - I feel they have their decision making and focus right i.e. cornering the middle market for leather products. While Bonia is not in the same mould of LV, Prada, Gucci etc., it does have a market and Asian community is CRAZY over branded products. (if you do your google search over 2011's listing for Prada in Hong Kong, you will know why).

So current price RM2.20 is capitalizing Bonia at RM443 million. With that, just look at its half year performance for FY2012. Is this something which will excite you?

Serious Investing!

Be careful on Opensys short term trade!

While I may have posted earlier piece on Opensys being a value investment for dividends as well as its attractive valuation, traders should beware of some of these news:

- CIMB sold 21,544,010 units or equivalent to 9.64% of Opensys block to an unknown buyer on 12 December 2011. Since this is a block which is more than 5%, if a single buyer bought this, they would need to file a substantial shareholding report. If any of the substantial shareholders or directors bought the block as well, they would need to do the filing. However since nobody did any filing on new purchases, this means that it was sold to private party or nominees who owns less than 5%. Ever since the block changed hands, the share price was ramped up signalling that potentially the buyer of the block was just doing a short term trade, hence you saw high volume in the stocks ever since 12 December 2011, a day after the block changed hands;

- the CIMB block was sold at 11.5 sen per share. If you followed my piece, the block is at an attractive price, however the volatility is due to there are syndicates playing and potentially trying to dispose off the 9.64% block partly or entirely. Hence for traders, treat this stock carefully for the short term;

-  recently traded price of 20.5 sen high and 12 sen low, it all depends on the new buyer have fully disposed off the 9.64% block;

- article on Thestar on Saturday, 18 Feb 2012 was merely just a rumour, as there is no proof that Yeoh Eng Kong is looking to control the company. If any, why would the price of Opensys dropped from 20 sen to 12.5 sen within a week. Obviously, the news was just planted through Star to misguide investors. Along the story, potentially they could be selling hoping that investors would buy into the story;

- with Opensys having a strong cashflow, at price of 20 sen, I do not see the current controlling shareholders of Opensys to be willing to sell. After all it is starting to ditch out attractive dividends.

It would be interesting to know whether the block that CIMB sold was to interested parties related to the current controlling shareholders or outsiders.

Serious Investing!

Why Jobstreet is a good buy

Not many stocks have the following traits - good growth prospects, strong net operating cashflow and gives good dividend. Jobstreet is one of the few. Let's take a look at the 5 year performance below:

On the group performance highlight alone, you can see consistent growth for the past 5 years. For the next 5 years, I do not think they will achieve the same growth profile as what they achieved in the last 5 years but I still believe that Jobstreet is going to register growth that consistently exceeds any average company.

Although there are no data provided on the market share that Jobstreet has in the online job posting market in Malaysia and Singapore, I however believe Jobstreet is the leader in the online job market in both countries. As the internet penetration increases, there will be less and less companies doing job advertisements on the newsprint due to two reasons, circulation drop and costs. It is obvious that costs for doing job ads on newspapers is much higher than doing it online. Doing it on the newsprint, there is the printing, distribution and paper costs while online the only cost is manpower which a newspaper may in fact face a potentially higher costs than online job advertising business. On circulation, with internet and especially recently tablet becoming part of the gadget that an average person would carry, I am assuming newsprint circulation will continue to drop. That is happening in all parts of the world, Asia included.

Would there be any new competitors?

As barrier of entry is low, Jobstreet is bound to have lots of potential competition from current as well as new entrants. Among them are Jobsdb, Monster, JobsandMore etc. however the key indicator for this is subscribers. Jobstreet has the most subscribers in the business in the main countries that they operate in. Monster and Jobsdb could potentially be bigger in the countries that they dominate themselves but Jobstreet wins in Malaysia and maybe Singapore. Jobstreet owns an equity accounting stake (of more than 20%) in 104 Corporation, an online job site company which is leading in Taiwan.

On the competition from traditional online job posting, I am not too worried but the more worrying part is technology. In US, there are already some data that shows LinkedIn may have taken some share from Monster.com but even then US is facing a severe unemployment problem.

Cashflow

One of the strength of Jobstreet is cashflow. There are not much new investments to be made and if any, its profitability would have easily overcome the investments. Its cashflow is in fact so strong that it has committed to paying 50% dividend from its profit after tax. Its dividend over the last 3 years are as follows:

From the above, the dividend yield is around 3.3% which is very attractive.

Price

Jobstreet's price has dropped from its high of RM2.78 in between March and May 2011 to around RM2.15 recently. The drop I believe is partly to do with disposal by one of its larger institutional shareholders, FMR LLC and FIL Limited. I am not too worried over the disposal as I believe this is part of the process where institutional investors are locking in profits. This could be also due to movement of portfolio by these funds as US and Europe seem to be more attractive than Malaysia or Asia rather recently. FMR sold around 3.5 million stocks over the last 6 months and from this sale, it allows Jobstreet to become attractive.

At RM2.15, it is trading at 14x PE. Consider this - for a company that still has good growth and dividend, the 14x PE is good price.

Take a look at its last 4 quarters result:

Serious Investing!

Sold Genting

After some thoughts, I have decided to sell Genting at RM11.18. I believe that there are better and more attractive stocks to buy. A hint - now I am looking at a dotcom (not many out there in Malaysia that is making money) as its international investor is reducing its stake hence making the stock now rather attractive.

Here is the performance of my stocks investment after 1 year.

The performance of my investment against KLCI and if I put those cash in Fixed Deposits:

Serious Investing!

Too many nurses chasing too few jobs - remember Masterskill?

I have previously posted 2 articles on my apprehension over the call for Buy by investment advisors over Masterskill. Since my posting, Masterskill has dropped from RM3.80 to now RM1.20. Each year they are catering for more than 8,000 new students. I wonder how they can sustain.

Below is an article from www.freemalaysiatoday.com.

Too many nurses chasing too few jobs

PETALING JAYA: Is the government simply incompetent when it comes to the glut of nurses or are the Health Ministry and Higher Education Ministry officers on the take?

Parti Sosialis Malaysia (PSM) feels that there is more than meets the eye and it is suspicious that private colleges are greasing the palms of these officers.
Yearly, private colleges are producing about 12,000 fully trained nurses but there are only 1,000 to 1,500 nursing jobs in the private sector each year, according to PSM central committee member and Sungai Siput MP Dr D Michael Jeyakumar.
Jeyakumar said figures given to him in Parliament showed that in 2010, some 5,000 out of 7,500 nursing graduates could not find jobs as nurses and ended up working at other sectors or were jobless.
There are currently more than 37,500 nursing undergraduates enrolled in 61 private institutes teaching nursing. Other nurses are trained in public institutions.
Jeyakumar said PSM has, over the past couple of years, received dozens of complaints from graduate nurses and their parents, higlighting this issue.

 “Many of these girls can’t get jobs as nurses so they work as salesgirls, clerks, and receptionists, which may pay maybe RM800 when a staff nurse is supposed to get RM1,800 a month,” he said.
He said with such difficulty finding a nursing job, many are unable to repay their PTPTN (National Higher Education Fund Corporation) loans, and he asked the government to waive those loans.
“You have to forfeit the loan; if they can’t afford a job, how can you ask them to pay?”
Jeyakumar pinned the blame on the problems on the government officials from both the Health and Higher Education Ministries.
“The government’s regulation of private colleges giving nursing courses is very, very disappointing. The Higher Education Ministry and the Health Ministry are both involved. They are not doing their jobs properly and now we have a gross oversupply of nurses, some poorly trained who are unable to find jobs.

Big scandal, big weakness
He said the Health Ministry was the one that allowed private colleges large quotas for their nurse intakes. The Higher Education Ministry, on the other hand, was the one that regulates the institutions and gives out licences.

 “It is a big scandal and big weakness in the system. We are saying the whole thing is a mess. We want the government to tell us whether it is incompetence or is it because the private colleges are giving financial inducement to officers in the Health Ministry? I want them to check as there are only either of these two possibilities,” said Jeyakumar.
Jeyakumar said that sources within the nursing colleges indicate that the profit margin for nursing courses was about 50%.
“So for a typical three-year diploma course costing RM55,000, the private college can get more than RM25,000. This goes into the hundreds of millions in profits, there is huge money there (RM25,000 x 12,000= RM 300 million),” he said.
Jeyakumar said the problem was the weak structure that is influenced strongly by financial inducements.
He added that in the whole scheme of things, only the owners and shareholders of the colleges profit.

 “Obviously profit seems to be the main objective here. We want the public, the parents of those after SPM, to know. We don’t want another 10,000 cheated again in future years,” he said.
The government now should cut down and freeze the intake into the private sector, said Jeyakumar, who also called on the government to review its quotas and licensing.
In April 2010, The Star quoted Higher Education Minister Mohamed Khaled Nordin as saying that the government was stopping more colleges from having nursing courses to prevent an oversupply of nurses and other problems arising from graduate unemployment.
“There will be no more private institutions providing nursing courses as we are already on the right track to achieve the recommended World Health Organi­sation nurse to population ratio of 1:200,” he was quoted as saying.
On Dec 13 last year, PSM handed over a memorandum to the Higher Education Minister on the issue, but claimed that there has been no active feedback so far.

Serious Investing!