recently I read about STARHILL REIT and Sunreit. Actually the dividend yield for REIT in Malaysia is comparable to EPF return. So it would be advisable to put our extra savings into REIT in order to keep up with the inflation. Do you agree with this?
Have you thought about investing in REIT? I see that you do not have any REIT in your portfolio.
Dear Felicity, I noticed HELP has been a laggard stock for maybe a year or two now. HELP seems like expanding aggressively especially the upcoming international school but also trading at a rich valuation of about P/E 20.
I like HELP, but I guess like you said the valuation for HELP is rich now. The problem for the business is that there is not enough differentiation factor for any of the education companies to be dominant. Recently, it has been affected due to the reduced revenue from overseas students which probably bypassed Malaysia now. Like most education stocks, they are now into private schooling and international school which is getting more and more popular. Don't know how that will play out though although I am pretty sure there's more demand for these kind of services.
Hi Felicity Happy new year to you...what do you think of Bjfood and Myeg...I've hold those stocks for sometime now which have appreciated fair bit...do you think both stocks still have potential to grow further? Thanks.
thanks for sharing your thought on REIT. I went through your articles about AEON Credit and RCE Capital again to compare with Malaysia Buildung Society (MBSB). MBSB is a competitor to RCE Capital that seems to be a good growth stock too. What do you think about MBSB?
I like MYEG, Its business is a good growth company. As for Berjaya Foods I like its Starbucks but not the Kenny Rogers. I think Kenny Rogers will pull down the company while Starbucks will do well. Unfortunately both of them are together.
I think RCE Capital wanted to acquire MBSB. MBSB has an advantage over RCE as it is a deposit taking unit. RCE is not.
The thing about MBSB is that it lends money for properties. If properties is slowing down, it may be affected. MBSB despite that is lending to the lower end properties. It is ok as an investment but I am not overly crazy over this.
Nah. Heard a lot and know the risk but the main problem is that I do not live in US and am unable to see brands or businesses run as I am able to in Malaysia. Also, there are just too many stocks in US that I have no idea where to start.
By the way, how about setting up a similar fund as you did for Malaysia investing in US stocks? I would be extremely interested.
Anyway, thank you very much for your help thus far. Appreciate it.
I have different strategy compared to Malaysia. In Malaysia, if you look at my portfolio, most are mid-sized companies as I still have exposure to these companies as you said.
US, companies that I have exposure are mainly large caps - APPLE, Bank of America, Wells fargo, VISA, Starbucks, even Berkshire Hathaway-B (not A). Well, these companies had a sort of run last 6 mths. The one which I am losing money are Corning (GLW) and Tesco. I am very bullish on large cap banks. Heavily exposed there.
Felicity : I share the same view with you about US Big Cap Bank. WFC is a no brainer stock. I like Lucadia ( LUK ), Berk.B and SYA. The housing industry is showing some signs or turn around which will be a boon for WFC for most of it's loan is mortgage based. In term of volatility, HK is much "roller coaster" than US. That is why I am out of the HK market. Furthermore there is too many financial shenanigan among the China based company in HK market. As for Malaysia market I can't find any worth buying at this level except Hartalega and Allianz. I hold Hartalega, Ber.B, APPL and going to bet heavily on WFC. Waiting for the right entry point. In comparison to Top Glove, no offence, I still think Hartalega is a better choice. People will keep on switching from rubber glove to nitrile glove. If you look at this industry in a longer period, the momentum of switching has started years ago even at that moment the nitrile glove was much more expensive than rubber glove. The pace of switching is quickening these 2 years and I think will be so in near future as long as the pricing mechanism is still in favor to nitrile glove. Happy Trading.
Its great to hear at least some people have comments on big bank stocks. Ya, I think it is still good time to hold these stocks despite the volatility. The reason is simple - after the crisis is over and banks back to full business, the big 3 - JP Morgan, BAC and wells fargo will be the main beneficiary. The deposits alone from the big 3 consists of 50% of total deposits. Hence, money is cheap for them.
On Hartalega, actually I agree but why I look at Top Glove - it is much larger capacity wise.
I am also thinking about Allianz - since the takeover from CIMB Assurance, its business sort of picked up very well.
Hi Felicity : Thank you for your comments. I vet through DKSH number and found that the in term of profit margin wise it is actually very very thin. I must say I am not familiar with their business model, the thing I am aoncerning is the profit margin which stretch too thin ( less than 1 % ). Maybe you have some insight which I hope you don't mind to share. At this moment of time, I hold quite substantial of cash ( > 50% cash ) which I don't like. I need to deploy the cash. Broder market wise, I just don't feel it is the right time to jump into the bandwagon. Malaysia market is funny, it is not like US or HK which are very efficient. Election is just around the corner, I hope it is a clear cut win or loose for either party. If is is hanging and uncertain, it is going to hurt the market. Maybe then is the best time to load. Need to do some homework and prepare for it. Don't you think so ?
For DKSH, I hope I am not wrong but I have figured it out this way. It is a distribution company with a full host of services. Imagine for a company which would like to distribute their products in Malaysia or Thailand. If the company already has products ready, for it to build a distribution channel, it would be very costly.
What it needs is DKSH or Harrisons. Beyond these two there are very few who have the capacity, size and reach. However, these two only have two strengths - distribution, collection. Beyond that, it did not do anything. Marketing are all done by the products companies themselves.
As a result of that, the revenue, volume would be extremely high for DKSH but it probably could not demand high margin. It nevertheless would still have the one link that most companies do not have and offer it to them.
It is the largest private distributor and no other companies would even dare to create and come close to it. moving further, it will still have that strength - because of the margins are thin, there could be surprises in terms of income but the revenue will continue to grow. To me, the strength and its competitiveness is good enough for me.
On Malaysian market, Ya I personally am not fully into Malaysia. Overseas markets consist of a bigger exposure.
Hi Fecility : I have been holding Cypark for a while before I sold it all at RM1.58 before it anounce it financial reselt couple of days ago. The result hosws the increased profit but again the increase of its receiable is alarming. but the market doesn't think so. It share price soar to RM 1.80 at the time of writing. Did I miss something ? You could have a look of what I wrote here http://sgbuaya.blogspot.com Appreciate your insight. I am intrested in Benalec as well. but the business model of claim the land, get the land and later sell it for a profit won't show consistence cashflow whiich is a flaw to me. But the Directors are keep on loading it up. I know I shall not consider this as an buying indication. But it is just merely extra information to be considered. What do you think if you ever vet through these 2 counters number. Thanks. Happy Trading.
Benalec is an expert in what they do. Just that the business model seems a little bit riskier.
As for Cypark, I am very worried over the receivables. Maybe you can check the team of people - are they experts in what they do or is it a political company. Check out the Chairman. Google it. ex-UN man.
Do search the two names in my blog as I have written about them before.
Any thoughts on Scientex? They are acquiring GW Plastic, which would make enlarge their production capacity for packaging business and diversify its exposure to F&B industry. Another growth factor would be their property business in Iskandar, though the property development cost may be a drag to the cashflow if it doesnt pick up as expected. What is your take?
Hi Felicity : Thanks for your comment on Benalec and Cypark. As you have said, I am very worried about Cypark receiveable too. hence I am taking the sell call. Yeah I did read about the UN man in Cypark. But that should be a consideration to make a buy call. As for Benalec, I have to admit that it's quality of earning is not good for I can't see the consistency in the coming quarters. Furthermore, it is hard for me to make a long term buy in a company which didn't show consistency of cash flow. It's piggy bank is not really growing as well. I once read that " One has to take care of the downside, the upside would take care of itself ". I will have to say a pass on these 2 companies. Thanks.
Hi Felicity, as the share prices of Padini significantly dropped over the last couple of month, would it be a good idea to have a position now? I have been learning a lot by reading your posts, and I am a beginner. Your feedback will be greatly appreciated.
Yes receivables is very high, but government as a paymaster for >70% of the revenue, it is expected that the receivables will be long.
The earning is dependent on new concessions received. Currently 8 mw Pajam solar power park is delivering consistent (albeit still small) profit.
Profits from RE will jump soon, as the 2mw bio gas energy and additional 5 mw solar panel is already near completion and would contribute to the bottom line once online.
There is hardly any maintenance or additional cost for RE once installed.
The land filling business revenue is a bit lumpy, but RE revenue is more consistent that's to the guaranteed 21 year feed in tariff rate. Current revenue rate is ~1.4 mil/mw/year.
However the biggest risk is election risk if BN losses, the concessions might take a hit.
Gark : I do agree with you that the government is the pay master for >70% of the revenue. But if the receivable is due for more than a year that doesn't sound good to me. The increase of the receivable is outpacing the increase of it's revenue. It sound like a business which are unable to collect it's cash but at the same time giving more credit facilities to it's customer. If the trend continues it will even sound fishy. it just doesn't make any sense to me. But Mr. Chua Mah You is one of the major share holder if I am not mistaken. It is bewildering.
Well it is stated in the CIMB report that the average sales billing to convert to cash from the Home Ministry which is 330 days. It is indeed that long... that is why Cypark is slowly exiting the landfill business (and also no more new projects. In 2013, the revenue from landfill is expected to be reduced by 1/2.
Current RE billing receivables turnover is 21 days from TNB, which will increase the future cash flow to a more predictable figure.
SENDAI has just hit 52 week low, the stock seems fundamentally strong however its share price has been moving downward since its IPO listing. May I have your thoughts or advice?
WingTM has two portions of its business - properties and the more stable fashion (apparel) industries. It is a decent developer but it does not have much landbank for its future development as I can see it. As for the apparel, I quite like it especially for the Uniqlo venture despite it owning the smaller 49%. Noticed that its price have recently gone higher which to me is quite fair.
Eversendai is fundamentally strong, except for its high exposure to the Middle East properties segment.
Engineering wise, it is a strong company but really I do not know where it stands in terms of valuation Based on its results and market cap, it is not richly valued. In fact, looks quite attractive.
I do not see you holding any of the oil and gas in your funds. Is it because there is no good stock in this sector to you or others reason ? But i see 2013 oil and gas sector may be one of the out standing sector. Hope you can share some good buy for this sector
Gark : Yes. Until there is some light shinning on the receivable issue, I think it is a huge risk to take up Cypark. I have been watching Cypark, bought it, then sold it. I have been following it for the past 4 quarters and there was no sign of declining receivable. Until then I would not touch it anymore.
While P&O seems to be attractive, however it is a standalone insurer. Standalone means it does not have bank support or is it associated to any large insurer globally. Over the last few years, Bank negara has been allowing many insurers to sell or tie up with foreign insurers to allow these insurance companies to strengthen.
As a result of that, you see Allianz, Zurich bought MAA and several banks selling their insurance arms - CIMB, Ambank, Hong Leong to MSIG etc.
P&O being a standalone will be facing much competition as these insurers are giant in relative to P&O. As P&O is now trading above its NAV, it is not that cheap anymore although the PE seems to be so.
What is more important is where does P&O stands in a small market like Malaysia in future.
Well,I agree it is going to face a lot of competition from big players, but I think it another way. MAybe when the market required to further consolidate in future, it is a good target to hold until that day. Like what happen to banks, local bank consolidated into less than 10 now.
I see its value in Insurance, if you read Chinese, you can see this link, http://www.investalks.com/forum/viewthread.php?tid=623&extra=page%3D1&page=29
I think it deserve a revalue once it sold its portion
Just happened to stumble on this here site today, and I have to say I'm duly impressed! Keep up the good work.
Just wondering, are there any sites out there that aggregate financial data for Malaysian companies? So far I've had to rely on the outdated (and at times, incorrect) data from WSJ/FT/Bloomberg/Reuters. Pretty new to all this, so I'm still looking around alot - time consuming when the only source is from the PDFs on the company websites.
Also adding to Art's query on US stocks; I hope you can share some of your experiences with brokers. Uncertain whether I should open a cross border trading account with a local firm or consider one of those popular online brokers. Focusing more on the longer term, so I'd be a little miffed if they upped and left.
(Sorry about the deletion. Darn typo demon got to me again. Didn't realise it'd show up as a 'deleted post'.)
there are probably no other sources of data except for the ones from Bloomberg, Reuters for now.
As for the market between 21 - 23 Jan, well I guess I am a bit too late to reply but as one can see, it is some knee jerk reaction and it has stabilised for quite a bit towards the end of the week.
I am actually expecting market to be sluggish between now till the GE results kicks in. Not selling anything though on my side.
got a question about Malaysia Airport Berhad. The important person behind the recent sterling performances of the company Tan Sri Bashir is retiring in June. Do you think the company will still be worth investing then?
Since you recently posted about a China-based stock (China Stationery Ltd),would like to know your opinion on HB Global (formerly SOZO).
As it had not been performing since its IPO, do you think it was due to negative sentiments towards Chinese stocks in general? While the last few quarterly results had not been wonderful, my gut feeling is that the business is at least genuine and I do foresee some prospects in the future.
Appreciate your comments and of course do shout if you spot something fishy or smell a rat!
Hi felicity. I would like to seek for your comment on SKP resource. Historical data showed that its kind of good company with consistence earning growth, positive operating cash flow, free cash flow to sales of >5%,net cash and high Dividend yield.. However, its now still trading at low PE? how do you think about it and its business? Thanks so much..
SKP resources has very strong track record and its stocks does not look expensive. I however lack understanding of what they do except for the plastic manufacturing solutions. that's why can't say much.
Hi,Felicity, Can you comment on PRKCORP(8346)?It's EPS stands at 38sen,NTA at RM4.68 and has net cash of nearly 77sen per share.It has even proposed a gross dividend of 7.48 sen.All these at 1.46!Could the potential political upheaval in Perak in the coming elections be the reason for its underperformance? Thank you in advance for your comments.And thanks for providing this blog.It has provided much needed views and information to assist in my investments.
I am afraid I will not be able to comment much. But my guess is this - since it is state owned, the impact would not be that great. usually a performing state owned corp will want to pay high dividends as its payment will go direct to the state.
State owned is basically the same as a company controlled by the federal government - any change in govt, they would want the best for the company, I presume.
The thing is that since it is a Perak state - that may however have some complications - remember what happened to the administration in 2009 if not mistaken.
Do you think National Bank of Greece is too big to fail? If you remember Citi, it was priced below $1 during the sub-prime crisis, but it's now trading at $40++ RBS, after partial nationalisation by UK government, rebounded as well. Bank of Ireland too had doubled since last year.
So, do you think NBG is a bargain at the current price of EUR0.59?
While I agree that Hapseng Consolidated is well diversified and has solid fundamental, but its plantation unit has some challenge where the high % of oil palm are aged and may need replanting soon.
On the change of management of SP Setia, it is most probably that they are moving to the newco of TSL as have the ex-chairman, ex-gm for penang as well as one ind director. While it will not impact them in the short term, in the longer term, as with all PNB companies, they will somehow manage even in the worse of times and the best of times. The govt support will be very strong as PNB cannot afford to fail.
Magni looks good but there are enough things which I know but would not be able to mention here. On paper it looks good though. Be careful of the industry - pretty tough
The shares rose over 30% in a very short time, I think in less than a month. I guess this could be partly to do with its better quarter results, as well as the market and they could have played it up as well. Shares that rose that fast, usually there are more reasons than just fundamental.
Note that I am just guessing, not necessarily correct as I am holding Wing Tai as well.
Numbers wise, Can One looks to be the more attractive of the two, mainly due to the profit contribution from the acquisition of 32.9% stake in Kian Joo. It is currently trading at a PE ratio of 3 on 2012 earnings and cash flow would pay off all borrowings in 5-6years if performance is maintained.
For me, the biggest risk remains the on-going suabbles in court. Can One filed a motion to dismiss the proposed bonus and rights issue on worries about possible dilution in its investment in Kian Joo.
Any thoughts? Stay away until a clearer picture on the legal front?
The PE is not 3x, Can-One has recognized a one-off profit of RM120 million from its acquisition of Kian Joo's shares in 2012. Without that profit, its PE would have been slightly more than 10x.
Hi Felicity. I noted that the Government of Singapore Investment Corporation has been paring down its stake in Parkson, which has contributed to the recent price weakness (based on Bursa filings).
Ya noticed that. Thanks, Hope it is wrong or they could be rebalancing the portfolio. Sometimes, these funds also disguise their act by buying and selling
My view on Kian Joo and Can One as I hold shares in these 2 companies.
The bonus issue should not be the basis for your decision as we know bonus issue does not affect the value but just improve liquidity.
Canone and KJ combined will be the biggest can producer in this country (even on their own, it is also the leading can producer), KJ trading at single digit forward PE and Canone, on its own (without results from KJ) will be slightly more expensive. But when Canone take in the results of KJ, then it looks more attractive, but I am of the view that KJ will soon pay more dividend as Canone needs cash inflow to service its debt, so need more dividend more KJ.
Both these companies are good proxy to the F&B consumer play.
The operation CF from the latest qtr for KJ seems that it pay off more creditors than it can collect from debtors. Shall see next qtr if receivable collection still slow, however, it has healthy cash position (though not net cash position yet).
The operation CF from the latest qtr for KJ seems that it pay off more creditors than it can collect from debtors. Shall see next qtr if receivable collection still slow, however, it has healthy cash position (though not net cash position yet).
Agreed, Canone financials has put many stay sideline - highly geared becos of loan to take up stake in KJ and operation cf not able to support all that. hence, i believe it needs substantial dividend from KJ. Inventory built up is too early to judge - is it they anticipate good business ahead/cost may go up or now has slow moving stock issues? I believe its the earlier as their revenue in Q2 & 3 usually pick up based on past trend. My allocation- i have allocated 75% in KJ and 25% in canone( to take a bit of risk bcos of its 32% stake in KJ put its valuation attractive).
Yes, thanks for correcting me on Can One's PE. I find cash flow a bit of a concern for both Can One and Kian Joo. Debtor Days are much higher than Creditor Days and free cash flow is inconsistent over the years. Looking to see if this improves over time.
I'm holding Padini since it's value of ±600M+ and today I found there is another quite similar business stocks call Asia Brands, which just released it's first quarter result, by looking at it total equity for 191M+ and I presume it have over 20% of ROE, but looking deeply which found the intangible asset of 130M+ !
If we substract the 130M+ intangible asset out, the NTA will become negative ! (Even Padini don't have this type of huge intangible asset )
I need your advise how do we assess this type of company ? because I quite like the anakku brands which has over 30+ years in the market and believe it could go further.
The intangible assets is not that much of a concern. Yes after taking that into effect, it would have become negative net Asset. This intangibles is acquired from its last year's acquisition of Anakku, Audrey etc. What is important from there is what are the contribution from these companies after the acquisitions. Until now it is hard to see much except if we dissect the announcements as well as the independent report from Alliance Bank. I have yet to read through much in detail.
However, one thing which is very substantial is the use of debt to purchase the acquisitions. As at latest result announcement, it has a very high debt of around RM232 million whereas its net tangible asset is negative (as said above). That part is highly worrying. I am very sure this company will go through one or two rounds of cash calls either rights, private placements, warrants etc.
I am sure the acquisition of the brands will enhance the profitability of the group but equally worrying is the balance sheet strength.
Your interest on some of the brands is good. Do keep on the lookout but do be aware of its need for cash which is very critical. I do not think the cashflow from operations will be quick enough to resolve its problem. It may take years.
Appreciate your thoughts on Asia Brands, as the yearly PBT ( by assuming the current quarters result ) of around 50M, I would said the total debts of 230M are quite manageable as it is about 4~5 times it yearly profit, but as I didn't invested in this type of company before, so really feel a bit of skeptical.
Anyway, let's see how it goes.
By the way, I think you are reading the annual report for company starting with alphabet of "Y" now, I'm quite tempting and interested in a company call Yoong Onn with market cap now at ±100M only.
They have steady profit over the years, healthy balance sheet and their business model is something I like too.
Do you think this company would replicate the success like Padini ?
I am surprise of the profitability level of companies like Yoong Onn. However, do be careful of the level of inventory. It has been on the rise over the last few years. If you notice products like bedlinen, rug - they tend to provide 50% to 70% discount to be able to sell. I do not know the condition of its inventory. Valuation however is not overpriced.
Hi Felicity, LANDMARKS is hardly profitable recently because it is in the midst of renovating its flagship,The Andaman.This affected its occupancy rate and hence the under performance.Works are also in progress for its Treasure Bay Bintan in Indonesia.The Bintan project will be completed by 4Q2013 and is scheduled to be opened in 1Q2014.The completion of such works could duly return LANDMARKS to the black again.Apart from its high NTA of 3.70,it's also backed by around 98million in net cash.GENTING is a major shareholder with around 30% stake acquired around RM2.00.
Hi Felicity, i know u have parkson in your portfolio, could u talk about its asset turnover? As for retail, i supposed it should be higher asset turnover to be better rite..
Hi Felicity, SCOMI's price is low, its and O&G comp, and I heard that it may end up taking over one of the oil fields in Malaysia (SapuraKencana is the other bet), from Newfield, who is closing shop.. what do you think
hi Car-Tea, when comes to the O&G sector, anything is possible. I think with IJM in as a small shareholder, it would mean something is probably brewing - don't know what.
I am currently looking at Myeg 2012annual report, i found that under the financial highlight, the previous year revenue figure had been restated? It has a different figure inside the 2012 AR compare with the AR in the past few years.What is that "restate" regards? Which figure is better to refer to? Thanks to you in advance..
What do you think of these group of companies listed in SGX?
ST Engineering, Super Group, SIA Engineering, Boustead Singapore, ARA, Raffles Medical Group, Jardine Matheson Holdings Limited, Jardine Strategic Holdings, Japan Food, and Dairy Farm.
If we were to buy these companies and hold for the long term, would we be rewarded?
Just drop by your blog, can’t stop reading all of your posts. I like your views on stocks which was rather detailed and unbiased from what we can get from research report.
Just curios and hope you don’t mind to share how do you obtain such a sharp analytical skill. Have you gone through any formal training/are you from the industry of investment banking, investment management or audit? Or do you obtain your investing skill purely through self-initiatives?
I know that the industry used Bloomberg for stock analysis (and it’s costly), however; do you think it is worthwhile for an individual to lease a terminal?
Last but not least, Ahmad Zaki has been hot in the news lately and target price is aggressive. Any view on Ahmad Zaki for long term investing at current price?
Thats a nice compliment. Don't think I deserve that. I do have training in multiple areas in finance - inclusive of stock research, corporate finance, financial management.
however I guess, its me - always wanted to know and find out about business and stocks - its my passion.
Dear Felicity, What you think for HAP SENG CONSOLIDATED? I personally think this is a good fundamental stock with proven track record. Thanks for your kind sharing and information.
On Jaya Tiasa I think it is not too bad, depending on what you want to buy. I like the below asset price but it is not the best oil palm plantation company. Not too sure on how well it is run though as the performance does not seem to be good though. When the price of palm oil if above RM3k, it is an easy choice but when the price is bad, it seems to be suffering. On that note, I will want to buy a better managed palm plantation.
The company has acquired good overseas company that specializes in niche products to enlarge its own product database. I think it is going to the right direction. Furthermore, the capex that petronas is going to spend in the next 5 years and its maiden venture into Indonesia will certainly improve it's prospect in the coming years.
I just got to know your blog recently and I find it really interesting and I really like your approach to investment. Appreciate your hardwork.
I came across a research report early in the year covering topics about the property market in Sabah, especially Kota Kinabalu where the big boys like MahSing and SP Setia are currently moving in.
Suria Capital came into the picture when this topic is brought up. Can you please comment on this particular company with regard to its :
1) financial position and performance 2) Business characteristics (ie. monopoly, GP/NP Margin) 3) Is it considered a good/fair price for its current market price?
and a little touch up on HAPSENG Consolidated maybe?
Thank you in advance and hope to hear from you soon!!
Hi Felicity, Instacom is an up and coming stock but the very speculative flavor of its legacy as I Power is creating high volume trading. Is it wise to go long on this counter.
I have less understanding of Instacom. But my fear is its dependence on telcos as their customers, hence payment can be slow. 4G LTE is an upgrade from 3G, hence not a total change. Towers will still remain and Malaysia has already enough towers. The thing that causes them to have increase in revenue is the new players i.e. YES and few others I think. These players are non factor in the telco war. The big three are still Maxis, Celcom, Digi. Check out how much deal are provided to these players.
Instacom does not have recurring income which I do not like. I see it as a play. you may wanna try as the stocks are still tightly held, but know when to leave. I don't.
If you are willing to learn and be accountable for what you do yourself, do learn about investment. This is not to say savings plan is bad, but the way they are structured in Malaysia is not good.
In any case, if you are under employment, there is already an EPF which takes away 23% of your salaries. One must however have the discipline to save yourself through other means of investments be it properties or stocks. Learn through the fundamentals. The only problem with most or many people is that they are really looking at the short term when comes to investments.
I do not know why there is no one talking about glove makers company here. The big player are going to make money in the coming years. I persnolly like Kossan a lot and bet it in a big way. It's income is predictable and there are plenty of research houses cover this stock. I wonder why it is not in the Felice's Fund. I tis a stock which shall not be missed. With the current Chaos in Bursa ( -36 points now ) it is a good time to accumulate. Dont you think of Fecily ?
I am not into this, but I think someone is collection Keuro (United Frontiers). the way the price is being traded now does not make sense. I guess the controlling parties are just shaking out the short term holders especially when a rights issue is coming soon.
Hi Wong Interestingly people are looking for places to put their money as return from savings in the banks are just too low for a long period of time. And it does not seem that return from savings will be going higher in the short period of time.
Due to that different schemes which are promising or providing good returns like the Bitcoin concept, Genneva and prices of properties gone much higher including stocks etc. Alternative investments are attracting lots of people but they could have gone overly optimistic.
Gold has dropped significantly over the last year. People who are buying jewelleries are having somewhat a different kind of attitude - believing in jewellery as a kind of savings. But one has to be careful over their stocks as prices of these commodities have dropped substantially and it may not be picking up soon - that's what I think.
I believe the nature of jewelry shop still serve to customer which is more like a consumer rather than an investor. As for investor, they are many channels to invest in pure gold, like coin, or bullion and even gold bar. What for to pay extra for craftsmanship?
Celebratory events like weddings, anniversary, and others still acts the major source of demand for jewelry business. And in Malaysia, and other Asian countries still prefers Gold jewelry compare to other precious metals. Furthermore typical Asian I would say feels that gold is the good way to preserve its value against inflation.
Gold price raise or fall does little affects to jewelry business. When the gold price raise, as it can sell higher price, yet they need to replenish inventory with higher cost.
When the gold price drop, the margin is lower but the cost of inventory replenishment is lower too.
The ability to control cost and raise selling price affects the most on the company profitability. Same as other consumer based company, buy commodities, sell product/brand.
Huge company like Nestle, Dutch Lady is able remain profitable despite of the rise and fall of the commodity price. Does Poh Kong has the ability to do so?
With Price(0.465) to Book (1.07) at 0.43, is Poh Kong worth of investment?
AEONCREDIT has just released another outstanding quarterly result with seemingly no slowdown in sight. What are the inherent risks in it's business model that one has be mindful about? Hope you can give an analysis of the company one day. TQ
MAHB: having looked at the results and its comments, it is hard to evaluate the impact from the KLIA2 especially at a period when it just opened. I am sure, there are additional costs incurred especially the transfers etc.
I personally am positive on the impact of KLIA2 to the group, but the recent MH370 and MH17 will definitely cause some uneasiness towards the airports results as well. However, if as I see the KLIA2 will allow some of the LCC to expand, I will be positive towards MAHB's results in the future - but not immediate.
I remember you mention about YGL before. At current price of 0.14 the price have slowly move up albeit low volume. What's your comment? Any margin of safety still at 0.14? Thanks in advance.
I would think there is a strong margin of safety for YFG given the background of the people that are behind the company. I know this is a different view from what I have been preaching i.e. value stocks, YFG will be slightly different given the revenue that it is generating. It will take some time to clear up the balance sheet and management issues but once completed, should be ok in my opinion.
I have just stumbled upon your blog and I'm impressed with the discourse which is rationally done. I read somewhere about your favourable view on MYEG - I am still trying to grapple its business model. If you have researched it already mind if you share? Further if you like MYEG which is IT centric and I assume would keep OPEX relatively low, then you should similarly like Tuneins as the modus operandi should be fairly similar. What's your views of these 2 shares and their value proposition? Regards, Harry
Tune Insurance is very dependent on Airasia. I think they will do whatever to make sure it does well with the sales coming from Airasoa's website.
However, I am not that favorable as compared to the other two i.e. Jobst and MYEG as they are one dimension in terms of depending on its clientele list
Travel to KL using KLIA 2 last weekend. Experience is horrible! Arrive 10:30pm at KLIA2. By the time I managed to buy a Taxi ticket, it was 12:10am. Wait for 20 more minutes for Taxi ! The designer of KLIA 2 definitely does not consider customer experience!
Yet despite the poor design and management, KLIA 2 is full of people.
This reminds me of a Warren Buffet quote:
"I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will."
The only way for KLIA 2 to change is to the better. I wonder what else can get worst. Once the gestation period is over, AirPort is worth invesment consideration.
I think it (Turbo-Mech) is a good stock with consistent income. Good space it is in. Kinda like it, just that not sure how the recent slide in oil price will affect it. I guess because of its maintenance business, it will not. Anyhow, it has been operating in low oil price environment before.
TA Enterprise has dropped a lot even it made a good profit last quarter. All due to various factors from internal and external. What is the support line for now?
with the potential listing of the warehouse business, did u see any value in tnlogistic? Apparently they are the largest local logistics and they own the largest warehouse in terms of capacity, but pe is the lowest among all mainly bcause they own the property business too. What do you think?
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185 comments:
Hi Felicity,
recently I read about STARHILL REIT and Sunreit. Actually the dividend yield for REIT in Malaysia is comparable to EPF return. So it would be advisable to put our extra savings into REIT in order to keep up with the inflation. Do you agree with this?
Have you thought about investing in REIT? I see that you do not have any REIT in your portfolio.
Retail REITs are ok if you are able to find good ones. Starhill REITs portfolio of properties to me does not look convincing.
As for SunREIT, perhaps slightly better.
Properties to me is overpriced hence REITs may have that same problem although their income are from rental etc.
Dear Felicity,
I noticed HELP has been a laggard stock for maybe a year or two now. HELP seems like expanding aggressively especially the upcoming international school but also trading at a rich valuation of about P/E 20.
What do you think of this company?
Thanks.
I like HELP, but I guess like you said the valuation for HELP is rich now. The problem for the business is that there is not enough differentiation factor for any of the education companies to be dominant.
Recently, it has been affected due to the reduced revenue from overseas students which probably bypassed Malaysia now.
Like most education stocks, they are now into private schooling and international school which is getting more and more popular. Don't know how that will play out though although I am pretty sure there's more demand for these kind of services.
Hi Felicity Happy new year to you...what do you think of Bjfood and Myeg...I've hold those stocks for sometime now which have appreciated fair bit...do you think both stocks still have potential to grow further? Thanks.
Hi Felicity,
thanks for sharing your thought on REIT. I went through your articles about AEON Credit and RCE Capital again to compare with Malaysia Buildung Society (MBSB). MBSB is a competitor to RCE Capital that seems to be a good growth stock too. What do you think about MBSB?
Hi GL
I like MYEG, Its business is a good growth company. As for Berjaya Foods I like its Starbucks but not the Kenny Rogers. I think Kenny Rogers will pull down the company while Starbucks will do well. Unfortunately both of them are together.
I think RCE Capital wanted to acquire MBSB. MBSB has an advantage over RCE as it is a deposit taking unit. RCE is not.
The thing about MBSB is that it lends money for properties. If properties is slowing down, it may be affected. MBSB despite that is lending to the lower end properties. It is ok as an investment but I am not overly crazy over this.
Hi Felicity,
Just out of curiosity, what U.S listed stocks do you currently hold?
Thanks.
Hi Art
I am quite heavily exposed to financial stocks like BAC, WFC which have seen some rise recently. You are in US as well?
I have been investing in Malaysia for 3 years now. Got to admit I am still new and young. Thinking of diversifying out of Malaysia recently.
I wonder which website do you look for financial reports on companies listed in US?
For US, go to www.sec.gov for its Annual Report and Quarterly Report. Annual Report is called 10-K while quarterly is called 10-Q.
However, if you are considering US, be prepared for volatility as it is much more volatile than Malaysia or any part of the region. Surprise?
Nah. Heard a lot and know the risk but the main problem is that I do not live in US and am unable to see brands or businesses run as I am able to in Malaysia. Also, there are just too many stocks in US that I have no idea where to start.
By the way, how about setting up a similar fund as you did for Malaysia investing in US stocks? I would be extremely interested.
Anyway, thank you very much for your help thus far. Appreciate it.
I have different strategy compared to Malaysia. In Malaysia, if you look at my portfolio, most are mid-sized companies as I still have exposure to these companies as you said.
US, companies that I have exposure are mainly large caps - APPLE, Bank of America, Wells fargo, VISA, Starbucks, even Berkshire Hathaway-B (not A). Well, these companies had a sort of run last 6 mths. The one which I am losing money are Corning (GLW) and Tesco. I am very bullish on large cap banks. Heavily exposed there.
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Felicity :
I share the same view with you about US Big Cap Bank. WFC is a no brainer stock. I like Lucadia ( LUK ), Berk.B and SYA. The housing industry is showing some signs or turn around which will be a boon for WFC for most of it's loan is mortgage based. In term of volatility, HK is much "roller coaster" than US. That is why I am out of the HK market. Furthermore there is too many financial shenanigan among the China based company in HK market. As for Malaysia market I can't find any worth buying at this level except Hartalega and Allianz. I hold Hartalega, Ber.B, APPL and going to bet heavily on WFC. Waiting for the right entry point. In comparison to Top Glove, no offence, I still think Hartalega is a better choice. People will keep on switching from rubber glove to nitrile glove. If you look at this industry in a longer period, the momentum of switching has started years ago even at that moment the nitrile glove was much more expensive than rubber glove. The pace of switching is quickening these 2 years and I think will be so in near future as long as the pricing mechanism is still in favor to nitrile glove. Happy Trading.
Hi Akagi
Its great to hear at least some people have comments on big bank stocks. Ya, I think it is still good time to hold these stocks despite the volatility. The reason is simple - after the crisis is over and banks back to full business, the big 3 - JP Morgan, BAC and wells fargo will be the main beneficiary. The deposits alone from the big 3 consists of 50% of total deposits. Hence, money is cheap for them.
On Hartalega, actually I agree but why I look at Top Glove - it is much larger capacity wise.
I am also thinking about Allianz - since the takeover from CIMB Assurance, its business sort of picked up very well.
Hi Felicity :
Thank you for your comments. I vet through DKSH number and found that the in term of profit margin wise it is actually very very thin. I must say I am not familiar with their business model, the thing I am aoncerning is the profit margin which stretch too thin ( less than 1 % ). Maybe you have some insight which I hope you don't mind to share. At this moment of time, I hold quite substantial of cash ( > 50% cash ) which I don't like. I need to deploy the cash. Broder market wise, I just don't feel it is the right time to jump into the bandwagon. Malaysia market is funny, it is not like US or HK which are very efficient. Election is just around the corner, I hope it is a clear cut win or loose for either party. If is is hanging and uncertain, it is going to hurt the market. Maybe then is the best time to load. Need to do some homework and prepare for it. Don't you think so ?
For DKSH, I hope I am not wrong but I have figured it out this way.
It is a distribution company with a full host of services. Imagine for a company which would like to distribute their products in Malaysia or Thailand. If the company already has products ready, for it to build a distribution channel, it would be very costly.
What it needs is DKSH or Harrisons. Beyond these two there are very few who have the capacity, size and reach. However, these two only have two strengths - distribution, collection. Beyond that, it did not do anything. Marketing are all done by the products companies themselves.
As a result of that, the revenue, volume would be extremely high for DKSH but it probably could not demand high margin. It nevertheless would still have the one link that most companies do not have and offer it to them.
It is the largest private distributor and no other companies would even dare to create and come close to it. moving further, it will still have that strength - because of the margins are thin, there could be surprises in terms of income but the revenue will continue to grow. To me, the strength and its competitiveness is good enough for me.
On Malaysian market, Ya I personally am not fully into Malaysia. Overseas markets consist of a bigger exposure.
Hi Fecility :
Thanks for your explanation.
Hi Fecility :
I have been holding Cypark for a while before I sold it all at RM1.58 before it anounce it financial reselt couple of days ago. The result hosws the increased profit but again the increase of its receiable is alarming. but the market doesn't think so. It share price soar to RM 1.80 at the time of writing. Did I miss something ? You could have a look of what I wrote here http://sgbuaya.blogspot.com Appreciate your insight. I am intrested in Benalec as well. but the business model of claim the land, get the land and later sell it for a profit won't show consistence cashflow whiich is a flaw to me. But the Directors are keep on loading it up. I know I shall not consider this as an buying indication. But it is just merely extra information to be considered. What do you think if you ever vet through these 2 counters number. Thanks. Happy Trading.
Benalec is an expert in what they do. Just that the business model seems a little bit riskier.
As for Cypark, I am very worried over the receivables. Maybe you can check the team of people - are they experts in what they do or is it a political company. Check out the Chairman. Google it. ex-UN man.
Do search the two names in my blog as I have written about them before.
Cheers
Any thoughts on Scientex? They are acquiring GW Plastic, which would make enlarge their production capacity for packaging business and diversify its exposure to F&B industry. Another growth factor would be their property business in Iskandar, though the property development cost may be a drag to the cashflow if it doesnt pick up as expected. What is your take?
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Hi Felicity :
Thanks for your comment on Benalec and Cypark. As you have said, I am very worried about Cypark receiveable too. hence I am taking the sell call. Yeah I did read about the UN man in Cypark. But that should be a consideration to make a buy call. As for Benalec, I have to admit that it's quality of earning is not good for I can't see the consistency in the coming quarters. Furthermore, it is hard for me to make a long term buy in a company which didn't show consistency of cash flow. It's piggy bank is not really growing as well. I once read that " One has to take care of the downside, the upside would take care of itself ". I will have to say a pass on these 2 companies. Thanks.
Hi Felicity, as the share prices of Padini significantly dropped over the last couple of month, would it be a good idea to have a position now? I have been learning a lot by reading your posts, and I am a beginner. Your feedback will be greatly appreciated.
Padini, if the management continue to execute their strategies correctly - it should be a strong stock to own
Just some comment on cypark..
Yes receivables is very high, but government as a paymaster for >70% of the revenue, it is expected that the receivables will be long.
The earning is dependent on new concessions received. Currently 8 mw Pajam solar power park is delivering consistent (albeit still small) profit.
Profits from RE will jump soon, as the 2mw bio gas energy and additional 5 mw solar panel is already near completion and would contribute to the bottom line once online.
There is hardly any maintenance or additional cost for RE once installed.
The land filling business revenue is a bit lumpy, but RE revenue is more consistent that's to the guaranteed 21 year feed in tariff rate. Current revenue rate is ~1.4 mil/mw/year.
However the biggest risk is election risk if BN losses, the concessions might take a hit.
Gark :
I do agree with you that the government is the pay master for >70% of the revenue. But if the receivable is due for more than a year that doesn't sound good to me. The increase of the receivable is outpacing the increase of it's revenue. It sound like a business which are unable to collect it's cash but at the same time giving more credit facilities to it's customer. If the trend continues it will even sound fishy. it just doesn't make any sense to me. But Mr. Chua Mah You is one of the major share holder if I am not mistaken. It is bewildering.
Well it is stated in the CIMB report that the average sales billing to convert to cash from the Home Ministry which is 330 days. It is indeed that long... that is why Cypark is slowly exiting the landfill business (and also no more new projects. In 2013, the revenue from landfill is expected to be reduced by 1/2.
Current RE billing receivables turnover is 21 days from TNB, which will increase the future cash flow to a more predictable figure.
Hi Felicity,
What are your thoughts regarding WingTai Malaysia.
Many thanks
Hi Felicity,
SENDAI has just hit 52 week low, the stock seems fundamentally strong however its share price has been moving downward since its IPO listing. May I have your thoughts or advice?
HI Emily
WingTM has two portions of its business - properties and the more stable fashion (apparel) industries. It is a decent developer but it does not have much landbank for its future development as I can see it. As for the apparel, I quite like it especially for the Uniqlo venture despite it owning the smaller 49%. Noticed that its price have recently gone higher which to me is quite fair.
The challenge is however, future development.
Eversendai is fundamentally strong, except for its high exposure to the Middle East properties segment.
Engineering wise, it is a strong company but really I do not know where it stands in terms of valuation Based on its results and market cap, it is not richly valued. In fact, looks quite attractive.
Hi Felice,
If I want to put up an ads on your blog, how much I need to pay?
I do not know where to post this one......
Hi Feli,
I do not see you holding any of the oil and gas in your funds. Is it because there is no good stock in this sector to you or others reason ? But i see 2013 oil and gas sector may be one of the out standing sector. Hope you can share some good buy for this sector
Lim
Hi Jacky
Quite simple. I have poor understanding on oil and gas sector.
Hi Crab Grill
Can you email me at intelecpoint@gmail.com?
Gark :
Yes. Until there is some light shinning on the receivable issue, I think it is a huge risk to take up Cypark. I have been watching Cypark, bought it, then sold it. I have been following it for the past 4 quarters and there was no sign of declining receivable. Until then I would not touch it anymore.
Hi Felicity, like to read your blog a lot.
I have been monitoring a stock lately, P&O insurance.
It seems like very undervalued compared to its peers.
Hi
While P&O seems to be attractive, however it is a standalone insurer. Standalone means it does not have bank support or is it associated to any large insurer globally. Over the last few years, Bank negara has been allowing many insurers to sell or tie up with foreign insurers to allow these insurance companies to strengthen.
As a result of that, you see Allianz, Zurich bought MAA and several banks selling their insurance arms - CIMB, Ambank, Hong Leong to MSIG etc.
P&O being a standalone will be facing much competition as these insurers are giant in relative to P&O. As P&O is now trading above its NAV, it is not that cheap anymore although the PE seems to be so.
What is more important is where does P&O stands in a small market like Malaysia in future.
Well,I agree it is going to face a lot of competition from big players, but I think it another way. MAybe when the market required to further consolidate in future, it is a good target to hold until that day. Like what happen to banks, local bank consolidated into less than 10 now.
I see its value in Insurance, if you read Chinese, you can see this link,
http://www.investalks.com/forum/viewthread.php?tid=623&extra=page%3D1&page=29
I think it deserve a revalue once it sold its portion
P&O insurance itself is worth RM1.90 from the calculation of holdings to P&O holdings
Wow I totally missed out on the sale. It is now a different story.
Hi Felicity
Any thoughts about the market movement the past two days?
Just happened to stumble on this here site today, and I have to say I'm duly impressed! Keep up the good work.
Just wondering, are there any sites out there that aggregate financial data for Malaysian companies? So far I've had to rely on the outdated (and at times, incorrect) data from WSJ/FT/Bloomberg/Reuters. Pretty new to all this, so I'm still looking around alot - time consuming when the only source is from the PDFs on the company websites.
Also adding to Art's query on US stocks; I hope you can share some of your experiences with brokers. Uncertain whether I should open a cross border trading account with a local firm or consider one of those popular online brokers. Focusing more on the longer term, so I'd be a little miffed if they upped and left.
(Sorry about the deletion. Darn typo demon got to me again. Didn't realise it'd show up as a 'deleted post'.)
Hi Ladder Operante
there are probably no other sources of data except for the ones from Bloomberg, Reuters for now.
As for the market between 21 - 23 Jan, well I guess I am a bit too late to reply but as one can see, it is some knee jerk reaction and it has stabilised for quite a bit towards the end of the week.
I am actually expecting market to be sluggish between now till the GE results kicks in. Not selling anything though on my side.
hi Felicity,
got a question about Malaysia Airport Berhad. The important person behind the recent sterling performances of the company Tan Sri Bashir is retiring in June. Do you think the company will still be worth investing then?
Hi Keano
I am not too worried over change in management for MAB for the moment. Let's see how it goes...
Cheers
Hi Felicity,
what do you think about PESTECH? The company is fundamentally good and expanding quite well overseas.
Most of the stocks I monitor is increasing this few days, the last run before election？
KeckSeng is the best hold so far
Hi Felicity,
Since you recently posted about a China-based stock (China Stationery Ltd),would like to know your opinion on HB Global (formerly SOZO).
As it had not been performing since its IPO, do you think it was due to negative sentiments towards Chinese stocks in general? While the last few quarterly results had not been wonderful, my gut feeling is that the business is at least genuine and I do foresee some prospects in the future.
Appreciate your comments and of course do shout if you spot something fishy or smell a rat!
Cheers!
Hi felicity.
I would like to seek for your comment on SKP resource. Historical data showed that its kind of good company with consistence earning growth, positive operating cash flow, free cash flow to sales of >5%,net cash and high Dividend yield.. However, its now still trading at low PE? how do you think about it and its business? Thanks so much..
Hi Gnihckes
SKP resources has very strong track record and its stocks does not look expensive. I however lack understanding of what they do except for the plastic manufacturing solutions. that's why can't say much.
Hi,Felicity,
Can you comment on PRKCORP(8346)?It's EPS stands at 38sen,NTA at RM4.68 and has net cash of nearly 77sen per share.It has even proposed a gross dividend of 7.48 sen.All these at 1.46!Could the potential political upheaval in Perak in the coming elections be the reason for its underperformance?
Thank you in advance for your comments.And thanks for providing this blog.It has provided much needed views and information to assist in my investments.
Hi Newbie
I am afraid I will not be able to comment much. But my guess is this - since it is state owned, the impact would not be that great. usually a performing state owned corp will want to pay high dividends as its payment will go direct to the state.
State owned is basically the same as a company controlled by the federal government - any change in govt, they would want the best for the company, I presume.
The thing is that since it is a Perak state - that may however have some complications - remember what happened to the administration in 2009 if not mistaken.
Dear felicity,
What is your opinion regarding the retirement of Tan Sri Liew Kee Sin and resignation of Dato' Chang Kim Wah?
Hi Felicity,
Do you think National Bank of Greece is too big to fail? If you remember Citi, it was priced below $1 during the sub-prime crisis, but it's now trading at $40++
RBS, after partial nationalisation by UK government, rebounded as well. Bank of Ireland too had doubled since last year.
So, do you think NBG is a bargain at the current price of EUR0.59?
Thanks.
Wow, I am not sure, but guess Greece is a different country compared to US for example. Citigroup and Bank America would have been different.
On the change of management within SP Setia, I think it will not change the company much
Hi Felicity,
Is DKSH fully valued at current price? Hap Seng seems to have quite good fundamental and good DY. What do you think? What do you think of Tambun?
Hi Felicity,
Judging by the recent success of Hibiscus, do you think CLIQ could be prospective as well?
Thanks.
hi felicity, may I ask your opinion on hapseng?
Hap Seng is not too bad of a diversified concern.
While I agree that Hapseng Consolidated is well diversified and has solid fundamental, but its plantation unit has some challenge where the high % of oil palm are aged and may need replanting soon.
On the change of management of SP Setia, it is most probably that they are moving to the newco of TSL as have the ex-chairman, ex-gm for penang as well as one ind director. While it will not impact them in the short term, in the longer term, as with all PNB companies, they will somehow manage even in the worse of times and the best of times. The govt support will be very strong as PNB cannot afford to fail.
Hi Felicity,
DKSH stock RM5.27 Am planing to enter what do you think about the stock. Wish to see your point of view.
Thanks if i can get an advise
On DKSH, I dont know actually but I do not buy stocks on the run
on the run ? you means on the bullish
sorry for my noob question as i m very new to stock
Hi Felicity,
Can u comment on Magni. Thanks.
Magni looks good but there are enough things which I know but would not be able to mention here. On paper it looks good though. Be careful of the industry - pretty tough
I think you know a lot about value investing. So might as well learn from you.
Recently read about the sell off in WingTai by its executive director. It's quite substantial. Mind sharing with me your comment on this.
http://klse.i3investor.com/servlets/anpth/909813.jsp
Thank you.
The shares rose over 30% in a very short time, I think in less than a month. I guess this could be partly to do with its better quarter results, as well as the market and they could have played it up as well. Shares that rose that fast, usually there are more reasons than just fundamental.
Note that I am just guessing, not necessarily correct as I am holding Wing Tai as well.
Hi Fecility,
What are your views of Kian Joo & Can One?
Numbers wise, Can One looks to be the more attractive of the two, mainly due to the profit contribution from the acquisition of 32.9% stake in Kian Joo. It is currently trading at a PE ratio of 3 on 2012 earnings and cash flow would pay off all borrowings in 5-6years if performance is maintained.
For me, the biggest risk remains the on-going suabbles in court. Can One filed a motion to dismiss the proposed bonus and rights issue on worries about possible dilution in its investment in Kian Joo.
Any thoughts? Stay away until a clearer picture on the legal front?
Hi Carina
The PE is not 3x, Can-One has recognized a one-off profit of RM120 million from its acquisition of Kian Joo's shares in 2012. Without that profit, its PE would have been slightly more than 10x.
Cheers
Hi Felicity. I noted that the Government of Singapore Investment Corporation has been paring down its stake in Parkson, which has contributed to the recent price weakness (based on Bursa filings).
Ya noticed that. Thanks, Hope it is wrong or they could be rebalancing the portfolio. Sometimes, these funds also disguise their act by buying and selling
Hi Carina
My view on Kian Joo and Can One as I hold shares in these 2 companies.
The bonus issue should not be the basis for your decision as we know bonus issue does not affect the value but just improve liquidity.
Canone and KJ combined will be the biggest can producer in this country (even on their own, it is also the leading can producer), KJ trading at single digit forward PE and Canone, on its own (without results from KJ) will be slightly more expensive. But when Canone take in the results of KJ, then it looks more attractive, but I am of the view that KJ will soon pay more dividend as Canone needs cash inflow to service its debt, so need more dividend more KJ.
Both these companies are good proxy to the F&B consumer play.
Hi Multi Bagger,
But we can see that there is not much cash generated from operation in recent qtr results
Hi Jacky
The operation CF from the latest qtr for KJ seems that it pay off more creditors than it can collect from debtors. Shall see next qtr if receivable collection still slow, however, it has healthy cash position (though not net cash position yet).
Hi Jacky
The operation CF from the latest qtr for KJ seems that it pay off more creditors than it can collect from debtors. Shall see next qtr if receivable collection still slow, however, it has healthy cash position (though not net cash position yet).
Hi Multi Bagger,
I mean the Canone and especially the inventory part in this qtr result.
Agreed, Canone financials has put many stay sideline - highly geared becos of loan to take up stake in KJ and operation cf not able to support all that. hence, i believe it needs substantial dividend from KJ.
Inventory built up is too early to judge - is it they anticipate good business ahead/cost may go up or now has slow moving stock issues? I believe its the earlier as their revenue in Q2 & 3 usually pick up based on past trend.
My allocation- i have allocated 75% in KJ and 25% in canone( to take a bit of risk bcos of its 32% stake in KJ put its valuation attractive).
I think so. I believed Canone earning is going to improve in coming qtr.
Yes, thanks for correcting me on Can One's PE. I find cash flow a bit of a concern for both Can One and Kian Joo. Debtor Days are much higher than Creditor Days and free cash flow is inconsistent over the years. Looking to see if this improves over time.
Bad payables is better than bad receivables.
Dear Felicity,
I'm holding Padini since it's value of ±600M+ and today I found there is another quite similar business stocks call Asia Brands, which just released it's first quarter result, by looking at it total equity for 191M+ and I presume it have over 20% of ROE, but looking deeply which found the intangible asset of 130M+ !
If we substract the 130M+ intangible asset out, the NTA will become negative ! (Even Padini don't have this type of huge intangible asset )
I need your advise how do we assess this type of company ? because I quite like the anakku brands which has over 30+ years in the market and believe it could go further.
Thanking in advance!
Hi P
The intangible assets is not that much of a concern. Yes after taking that into effect, it would have become negative net Asset. This intangibles is acquired from its last year's acquisition of Anakku, Audrey etc. What is important from there is what are the contribution from these companies after the acquisitions. Until now it is hard to see much except if we dissect the announcements as well as the independent report from Alliance Bank. I have yet to read through much in detail.
However, one thing which is very substantial is the use of debt to purchase the acquisitions. As at latest result announcement, it has a very high debt of around RM232 million whereas its net tangible asset is negative (as said above). That part is highly worrying. I am very sure this company will go through one or two rounds of cash calls either rights, private placements, warrants etc.
I am sure the acquisition of the brands will enhance the profitability of the group but equally worrying is the balance sheet strength.
Your interest on some of the brands is good. Do keep on the lookout but do be aware of its need for cash which is very critical. I do not think the cashflow from operations will be quick enough to resolve its problem. It may take years.
Dear Felicity,
Appreciate your thoughts on Asia Brands, as the yearly PBT ( by assuming the current quarters result ) of around 50M, I would said the total debts of 230M are quite manageable as it is about 4~5 times it yearly profit, but as I didn't invested in this type of company before, so really feel a bit of skeptical.
Anyway, let's see how it goes.
By the way, I think you are reading the annual report for company starting with alphabet of "Y" now, I'm quite tempting and interested in a company call Yoong Onn with market cap now at ±100M only.
They have steady profit over the years, healthy balance sheet and their business model is something I like too.
Do you think this company would replicate the success like Padini ?
Thanking in advance!
Hi P
I am surprise of the profitability level of companies like Yoong Onn. However, do be careful of the level of inventory. It has been on the rise over the last few years. If you notice products like bedlinen, rug - they tend to provide 50% to 70% discount to be able to sell. I do not know the condition of its inventory.
Valuation however is not overpriced.
Dear Felicity,
Alright! Thanks for the advise.
Cheers!
Hi Felicity
Any thoughts on Landmarks?
Hard to see anything positive about the company. rarely profitable. The only thing positive about landmark is it P/Book Value which is below 0.4x
Hi Felicity,
LANDMARKS is hardly profitable recently because it is in the midst of renovating its flagship,The Andaman.This affected its occupancy rate and hence the under performance.Works are also in progress for its Treasure Bay Bintan in Indonesia.The Bintan project will be completed by 4Q2013 and is scheduled to be opened in 1Q2014.The completion of such works could duly return LANDMARKS to the black again.Apart from its high NTA of 3.70,it's also backed by around 98million in net cash.GENTING is a major shareholder with around 30% stake acquired around RM2.00.
Hi Felicity,
Can you comment on Apple? What do you think of Apple and it's continue product innovations to retain or capture more market share?
Apple is a great company. Not expensive, very very strong cashflow. Strong product lineup. However, the main worry is how long can this last.
I guess that reflects in the share price.
Hi Felicity, i know u have parkson in your portfolio, could u talk about its asset turnover? As for retail, i supposed it should be higher asset turnover to be better rite..
Asset turnover is definitely important. However for Parkson, hard to find a similar comparison as its other competitors such as AEON is different.
Hi Felicity,
What website/software you used while collecting all the financial data? Or are you actually extract all from annual report? Thanks
I have Bloomberg access but still I most of time like annual reports. Even Bloomberg can be wrong
Hi Felicity, SCOMI's price is low, its and O&G comp, and I heard that it may end up taking over one of the oil fields in Malaysia (SapuraKencana is the other bet), from Newfield, who is closing shop.. what do you think
hi Car-Tea, when comes to the O&G sector, anything is possible. I think with IJM in as a small shareholder, it would mean something is probably brewing - don't know what.
Hard to know what can happen, sitting here.
Hi Felicity,
I am currently looking at Myeg 2012annual report, i found that under the financial highlight, the previous year revenue figure had been restated? It has a different figure inside the 2012 AR compare with the AR in the past few years.What is that "restate" regards? Which figure is better to refer to? Thanks to you in advance..
Hi reyes, restated figure is the correct one.
What do you think of these group of companies listed in SGX?
ST Engineering, Super Group, SIA Engineering, Boustead Singapore, ARA, Raffles Medical Group, Jardine Matheson Holdings Limited, Jardine Strategic Holdings, Japan Food, and Dairy Farm.
If we were to buy these companies and hold for the long term, would we be rewarded?
Hi Felicity,
Jobst is proposing split, what is your view on this
Hi Jacky,Should not have any effect on fundamentals but it will allow more liquidity on a stock which has very little liquidity.
The ultimate is still the fundamental of this company, at which time is still very good.
Hi Felicity,
Do you think it is worth to invest more after the split.
Hi Jacky
Depends on the price. However Jobst is one of the most investor responsible company I have ever encountered.
Cheers
Thanks
Hi Felicity,
Just drop by your blog, can’t stop reading all of your posts. I like your views on stocks which was rather detailed and unbiased from what we can get from research report.
Just curios and hope you don’t mind to share how do you obtain such a sharp analytical skill. Have you gone through any formal training/are you from the industry of investment banking, investment management or audit? Or do you obtain your investing skill purely through self-initiatives?
I know that the industry used Bloomberg for stock analysis (and it’s costly), however; do you think it is worthwhile for an individual to lease a terminal?
Last but not least, Ahmad Zaki has been hot in the news lately and target price is aggressive. Any view on Ahmad Zaki for long term investing at current price?
Thanks CottageKyo
Thats a nice compliment. Don't think I deserve that. I do have training in multiple areas in finance - inclusive of stock research, corporate finance, financial management.
however I guess, its me - always wanted to know and find out about business and stocks - its my passion.
Dear Felicity,
What you think for HAP SENG CONSOLIDATED? I personally think this is a good fundamental stock with proven track record.
Thanks for your kind sharing and information.
Hi Felicity,
Could you pls share your view on the increase of intagible assets (cash investing) of Airport in the latest quarter report of RM864,734.
it is the concession assets which under accounting, it has to park under intangibles
Hi Felicity,
Thanks but do you know why the figure is increasing compare to previous data.
I believe they spent more on KLIA2
Hi Felicity good morning..
What is your opinion on Jaya Tiasa?
Thanks for your thoughts.
Cheers
On Jaya Tiasa
I think it is not too bad, depending on what you want to buy. I like the below asset price but it is not the best oil palm plantation company. Not too sure on how well it is run though as the performance does not seem to be good though. When the price of palm oil if above RM3k, it is an easy choice but when the price is bad, it seems to be suffering. On that note, I will want to buy a better managed palm plantation.
Hi Felice,
wat do you think about pantech?
The company has acquired good overseas company that specializes in niche products to enlarge its own product database. I think it is going to the right direction. Furthermore, the capex that petronas is going to spend in the next 5 years and its maiden venture into Indonesia will certainly improve it's prospect in the coming years.
hi felicity,
i found out that the cash conversion cycle for both padini and bonia is not so good. how do u view it? Thanks
Hi Felicity, Currently I am holding mashing and Mkland. What do you think about these two stock?
Hi Felicity,
I just got to know your blog recently and I find it really interesting and I really like your approach to investment. Appreciate your hardwork.
I came across a research report early in the year covering topics about the property market in Sabah, especially Kota Kinabalu where the big boys like MahSing and SP Setia are currently moving in.
Suria Capital came into the picture when this topic is brought up. Can you please comment on this particular company with regard to its :
1) financial position and performance
2) Business characteristics (ie. monopoly, GP/NP Margin)
3) Is it considered a good/fair price for its current market price?
and a little touch up on HAPSENG Consolidated maybe?
Thank you in advance and hope to hear from you soon!!
Hi Felicity,
Would like to seek your opinion regarding the IGBreit?
Thank you.
I think IGB Reit will have consistent growth although not specatular
Hi Felicity,
Instacom is an up and coming stock but the very speculative flavor of its legacy as I Power is creating high volume trading. Is it wise to go long on this counter.
I have less understanding of Instacom. But my fear is its dependence on telcos as their customers, hence payment can be slow. 4G LTE is an upgrade from 3G, hence not a total change. Towers will still remain and Malaysia has already enough towers. The thing that causes them to have increase in revenue is the new players i.e. YES and few others I think. These players are non factor in the telco war. The big three are still Maxis, Celcom, Digi. Check out how much deal are provided to these players.
Instacom does not have recurring income which I do not like. I see it as a play. you may wanna try as the stocks are still tightly held, but know when to leave. I don't.
Thanks for your valuable feedback and your insights.
The big three could face challenge from Telekom Malaysia, whom The Star reported planning to roll out its own LTE services.
Nahhh! remember TMTouch, then it bought Celcom after the failed mobile venture then sold back Celcom...
hi felicity,
do you encourage people to commit themselves with the Saving Plan enrolled by the Insurance Company? If not, why? What is pro & cons?
Thanks.
hi felicity,
do you encourage people to commit themselves with the Saving Plan enrolled by the Insurance Company? If not, why? What is pro & cons?
Thanks.
Hi Felicity,
Currently REIT stock and the price is keep on dropping, would like to ask your opinion on the stock.
Hi PL
If you are willing to learn and be accountable for what you do yourself, do learn about investment. This is not to say savings plan is bad, but the way they are structured in Malaysia is not good.
In any case, if you are under employment, there is already an EPF which takes away 23% of your salaries. One must however have the discipline to save yourself through other means of investments be it properties or stocks. Learn through the fundamentals. The only problem with most or many people is that they are really looking at the short term when comes to investments.
Cheers
I do not know why there is no one talking about glove makers company here. The big player are going to make money in the coming years. I persnolly like Kossan a lot and bet it in a big way. It's income is predictable and there are plenty of research houses cover this stock. I wonder why it is not in the Felice's Fund. I tis a stock which shall not be missed. With the current Chaos in Bursa ( -36 points now ) it is a good time to accumulate. Dont you think of Fecily ?
Hi Felicity,
Can you give your view on the impact of QE tapering to klci and Asian market ? Is it just of fear or it really impact our market ?
Hi Felicity,
Can you give your view on the impact of QE tapering to klci and Asian market ? Is it just of fear or it really impact our market ?
Hi Felicity,
Thanks for all your sharing and advice. It's been very helpful.
Can you give your views on Efficient E-Solutions & Notion VTec stocks? Is it worth investing?
Hi buddy,
I am a investor in TA GLOBAL BERHAD , a stock whose NTA is $0.46 and currently trades at $0.265
Any idea why such a large discount on this stock?
Morning Felicity,
What would be the fair PE and price to book ratios for finance counters.
Thank you.
Zuo De
Hi Felicity,
5m x 1.31 Keuro crossed after end of market. Any comments?
I am not into this, but I think someone is collection Keuro (United Frontiers). the way the price is being traded now does not make sense. I guess the controlling parties are just shaking out the short term holders especially when a rights issue is coming soon.
Hi Felicity,
May I know what is your comment on PohKong? Thanks.
Hi Wong
Interestingly people are looking for places to put their money as return from savings in the banks are just too low for a long period of time. And it does not seem that return from savings will be going higher in the short period of time.
Due to that different schemes which are promising or providing good returns like the Bitcoin concept, Genneva and prices of properties gone much higher including stocks etc. Alternative investments are attracting lots of people but they could have gone overly optimistic.
Gold has dropped significantly over the last year. People who are buying jewelleries are having somewhat a different kind of attitude - believing in jewellery as a kind of savings. But one has to be careful over their stocks as prices of these commodities have dropped substantially and it may not be picking up soon - that's what I think.
I believe the nature of jewelry shop still serve to customer which is more like a consumer rather than an investor. As for investor, they are many channels to invest in pure gold, like coin, or bullion and even gold bar. What for to pay extra for craftsmanship?
Celebratory events like weddings, anniversary, and others still acts the major source of demand for jewelry business. And in Malaysia, and other Asian countries still prefers Gold jewelry compare to other precious metals. Furthermore typical Asian I would say feels that gold is the good way to preserve its value against inflation.
Gold price raise or fall does little affects to jewelry business. When the gold price raise, as it can sell higher price, yet they need to replenish inventory with higher cost.
When the gold price drop, the margin is lower but the cost of inventory replenishment is lower too.
The ability to control cost and raise selling price affects the most on the company profitability. Same as other consumer based company, buy commodities, sell product/brand.
Huge company like Nestle, Dutch Lady is able remain profitable despite of the rise and fall of the commodity price. Does Poh Kong has the ability to do so?
With Price(0.465) to Book (1.07) at 0.43, is Poh Kong worth of investment?
Hi Felicity,
AEONCREDIT has just released another outstanding quarterly result with seemingly no slowdown in sight. What are the inherent risks in it's business model that one has be mindful about? Hope you can give an analysis of the company one day. TQ
Hi felicity , will you buy more jobst? Since so near div payout, think it is sure win. Since you mentioned paying few cents for a 30cents of assets.
Hi Felicity, what is your view of 44 mil loss on recent Airport qtr report
MAHB: having looked at the results and its comments, it is hard to evaluate the impact from the KLIA2 especially at a period when it just opened. I am sure, there are additional costs incurred especially the transfers etc.
I personally am positive on the impact of KLIA2 to the group, but the recent MH370 and MH17 will definitely cause some uneasiness towards the airports results as well. However, if as I see the KLIA2 will allow some of the LCC to expand, I will be positive towards MAHB's results in the future - but not immediate.
Hi Felice,
I remember you mention about YGL before. At current price of 0.14 the price have slowly move up albeit low volume.
What's your comment? Any margin of safety still at 0.14?
Thanks in advance.
Oops , YFG not YGL
I would think there is a strong margin of safety for YFG given the background of the people that are behind the company. I know this is a different view from what I have been preaching i.e. value stocks, YFG will be slightly different given the revenue that it is generating. It will take some time to clear up the balance sheet and management issues but once completed, should be ok in my opinion.
Hi Felicity, I just want to ask your opinion about GAB, is it worth to buy for the recent cheap stock price?
For GAB
It is definitely a stock for investment, for the long term. In the short term it is facing challenges as in other consumer based businesses.
If you look at many of the stocks, you will see that margins has been affected as well as consumption probably slowed.
Cheers
Hi Felicity,
I have just stumbled upon your blog and I'm impressed with the discourse which is rationally done. I read somewhere about your favourable view on MYEG - I am still trying to grapple its business model. If you have researched it already mind if you share? Further if you like MYEG which is IT centric and I assume would keep OPEX relatively low, then you should similarly like Tuneins as the modus operandi should be fairly similar. What's your views of these 2 shares and their value proposition? Regards, Harry
Tune Insurance is very dependent on Airasia. I think they will do whatever to make sure it does well with the sales coming from Airasoa's website.
However, I am not that favorable as compared to the other two i.e. Jobst and MYEG as they are one dimension in terms of depending on its clientele list
Travel to KL using KLIA 2 last weekend. Experience is horrible! Arrive 10:30pm at KLIA2. By the time I managed to buy a Taxi ticket, it was 12:10am. Wait for 20 more minutes for Taxi ! The designer of KLIA 2 definitely does not consider customer experience!
Yet despite the poor design and management, KLIA 2 is full of people.
This reminds me of a Warren Buffet quote:
"I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will."
The only way for KLIA 2 to change is to the better. I wonder what else can get worst. Once the gestation period is over, AirPort is worth invesment consideration.
Felicity, what is your view on the dismal Q3 earnings reported by MAHB today and will you continue to hold on to it?
MAHB's result is not good. Additionally, it has bought an airport in Turkey which needs more fund raising. I am not too happy with the purchase.
Right issue at 4.80 - raising fund for the new airport !
Any comment on parkson?
Hi, Felicity,
Understand you also invest in US stock.
May I know what is any recommended reliable platform we can use from Malaysia?
Thanks!!
Hi guomiao
I use Philips Securities from Singapore. They are ok only.
Hi Felicity,
Can I have your view on Censoft?
Hi She Low
I am not able to see anything interesting on the company.
Cheers
Hi Felicity,
Can I have your view on Turbo?
Hi She Low
I think it (Turbo-Mech) is a good stock with consistent income. Good space it is in. Kinda like it, just that not sure how the recent slide in oil price will affect it. I guess because of its maintenance business, it will not. Anyhow, it has been operating in low oil price environment before.
Price is not expensive.
Great.
Hi Felicity,
May I know what is your view on Favelle Favco? Thank you.
TA Enterprise has dropped a lot even it made a good profit last quarter. All due to various factors from internal and external. What is the support line for now?
May i have your view on parkson since it has dropped 400%since your buy time.
Hi Felicity...appreciate your insights in regards to AAX stock growth prospects mid-long term. Cheers
May I know your opinion about Persona? Thanks!
Hi Felicity,
I read some of your posts before ...
and stocks are picked for their relative low Price/NA
May I know your opinion on KPSCB ?
Hi Felicity whats your thought on Geshen? Thanks
with the potential listing of the warehouse business, did u see any value in tnlogistic? Apparently they are the largest local logistics and they own the largest warehouse in terms of capacity, but pe is the lowest among all mainly bcause they own the property business too. What do you think?
Hi Reyes,
I will have to look more detail on TNlogistic, buut it does look promising.
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Hi Felicity, would you mind sharing your perspectives on Tambun Indah and Vitrox?
Hello Felicity, do you mind to share about your view on vivocom?
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