For both stocks I have sold all.
Total PWROOT sold was 2460 units, while PWROOT-WA sold was 1360 units. Total received was RM4626.73 and RM994.80.
Showing posts with label Power Root. Show all posts
Showing posts with label Power Root. Show all posts
Monday, July 29, 2019
Sold PowerRoot and PowerRoot-WA
Recently with the rise, I sold both the Power Root and Power Root's warrant.
For both stocks I have sold all.
Total PWROOT sold was 2460 units, while PWROOT-WA sold was 1360 units. Total received was RM4626.73 and RM994.80.
For both stocks I have sold all.
Total PWROOT sold was 2460 units, while PWROOT-WA sold was 1360 units. Total received was RM4626.73 and RM994.80.
Thursday, July 19, 2018
Buying more WCE
I have decided to purchase some 13,200 units of WCEHB. In the process, I have sold 5,700 units of Power Root for the fund.
I have held the stock, WCE for a long time since 2014 and this drop largely to do with fear of termination of most tolled highways in Malaysia, I think is overdone. There is no denying that any government of the day can do whatever they like - or could they?
More than 50% of tolled highway assets are owned by government linked organizations such as EPF, PNB, Khazanah. Those examples are PLUS Expressway, AKLEH, LKSA, SILK and several more under Prolintas. Many investors do not differentiate the difference between government linked and government. These highways are not owned by government but by the people. Best example is PLUS which is 51% owned through Khazanah and 49% by EPF. The government does not hold ownership of EPF but run the organization on the people's behalf.
By terminating PLUS without fair compensation towards EPF especially will be bad for the governance and future investment profile of the country.
WCE Sdn Bhd is indirectly semi-private and public, as I call it. 20% of the highway is owned by IJM direct, and the largest shareholder for IJM is EPF (yet again). Although it is professionally run by a set of managers, its 2nd and 3rd largest shareholders are Amanah Saham Bumiputera and Tabung Haji respectively. Besides that IJM also holds 26% of WCE Holdings, the listed company which I am buying.
In the event the government is exercising its pitch of eliminating toll highways, it will hugely impact the stock market - and not just tolled highway stocks.
At the price of RM0.75, I think the market is already putting the company on the huge assumption that the highway will not continue. Todate, WCE is 51% completed and it seems that they are continuing with the project without stopping.
On the other hand, as it seems MWE - the other 26% shareholder is picking up its shares of the additional funds - through rights - that is to be raised for the company in the next few months. If the project is affected, usually no one will inject more money. MWE is actually going private which means its company's largest shareholder is now having a larger effective stake of WCEHB.
On the merit of the highway, I do not think there is much change. The government could hold back on price toll increases in the long run which may affect WCE. I still think at RM750 million valuation, it is compensated for whatever that may be negative.
I have held the stock, WCE for a long time since 2014 and this drop largely to do with fear of termination of most tolled highways in Malaysia, I think is overdone. There is no denying that any government of the day can do whatever they like - or could they?
More than 50% of tolled highway assets are owned by government linked organizations such as EPF, PNB, Khazanah. Those examples are PLUS Expressway, AKLEH, LKSA, SILK and several more under Prolintas. Many investors do not differentiate the difference between government linked and government. These highways are not owned by government but by the people. Best example is PLUS which is 51% owned through Khazanah and 49% by EPF. The government does not hold ownership of EPF but run the organization on the people's behalf.
By terminating PLUS without fair compensation towards EPF especially will be bad for the governance and future investment profile of the country.
WCE Sdn Bhd is indirectly semi-private and public, as I call it. 20% of the highway is owned by IJM direct, and the largest shareholder for IJM is EPF (yet again). Although it is professionally run by a set of managers, its 2nd and 3rd largest shareholders are Amanah Saham Bumiputera and Tabung Haji respectively. Besides that IJM also holds 26% of WCE Holdings, the listed company which I am buying.
In the event the government is exercising its pitch of eliminating toll highways, it will hugely impact the stock market - and not just tolled highway stocks.
At the price of RM0.75, I think the market is already putting the company on the huge assumption that the highway will not continue. Todate, WCE is 51% completed and it seems that they are continuing with the project without stopping.
On the other hand, as it seems MWE - the other 26% shareholder is picking up its shares of the additional funds - through rights - that is to be raised for the company in the next few months. If the project is affected, usually no one will inject more money. MWE is actually going private which means its company's largest shareholder is now having a larger effective stake of WCEHB.
On the merit of the highway, I do not think there is much change. The government could hold back on price toll increases in the long run which may affect WCE. I still think at RM750 million valuation, it is compensated for whatever that may be negative.
Tuesday, March 27, 2018
Bought more Power Root
It is difficult when one of shares is bought and then it continuously dropped. Power Root, supposedly a more defensive business but probably because of its small float, it has dropped to many years low of RM1.15 recently.
While financial performance has dropped since I bought the shares last year, I suspect it is a short term thingy. The business of coffee is quite competitive but somehow, many of them are able to play according to the rule i.e. not let the prices goes too low and in the event caused everyone to suffer financially. The Oldtown's sale is a good example as it shows that there are value for this business. I suspect the value for Oldtown comes from its ready coffee mix business rather than the coffee chain business.
I have decided to buy (as below) when it dropped as I deemed it as an opportunity.
This business is not a "moat", however I suspect Power Root has its inherent strength as well. The lower profits in the last one year is probably of its expansion costs as one can also noticed that its foreign business is now bigger than local sales.
While financial performance has dropped since I bought the shares last year, I suspect it is a short term thingy. The business of coffee is quite competitive but somehow, many of them are able to play according to the rule i.e. not let the prices goes too low and in the event caused everyone to suffer financially. The Oldtown's sale is a good example as it shows that there are value for this business. I suspect the value for Oldtown comes from its ready coffee mix business rather than the coffee chain business.
I have decided to buy (as below) when it dropped as I deemed it as an opportunity.
This business is not a "moat", however I suspect Power Root has its inherent strength as well. The lower profits in the last one year is probably of its expansion costs as one can also noticed that its foreign business is now bigger than local sales.
Wednesday, April 12, 2017
Sold some Insas and Bought Power Root
Recently as Insas grew to a price point which I think I would like to forgo, I decided to sell a portion of the share and move a safer (I presume) stock.
Hence, I have decided to sell 10,000 units of Insas and Bought Power Root.
For those whom do not know Power Root, it is a company that sells the Alicafe and Ah Huat coffee brand. If I am a normal investor, I would have thought it would struggle in a crowded ready to drink coffee market. This market has Nescafe, Oldtown, Aik Cheong, Super brand, Pappa Rich and several more (even Starbucks included).
Despite these challenges, perhaps these figures would change some person's mind. Me included.
I have separated the financial revenue into local sales versus international sales. This is because I think it is important to separate out and highlight its numbers from it overseas sales which has been rather impressive. From my reading a huge portion of its sales is from the Middle Eastern market. Today, Power Root has a plant in UAE as it has grown to a certain size which allows it to decide to build one and logistically, I think it will be positive for its operations in the future.
Translating those numbers into a chart, perhaps this is clearer and shows that the overseas revenue has grown from a negligible RM5 million in 4Q10 (Dec 2009-Feb2010) to RM50 million in its latest quarter. That is a 10x.
Local sales on the other hand has a respectable growth although not as strong as its overseas sales. Based on that trend, I would not be surprise that its overseas sales would exceed its local sales in the near future.
In terms of profitability?
I am not one of those who would sweat over quarter to quarter numbers. However if you look at the long term trend, it is fantastic. This shows that despite the tough market environment, the players are pretty obedient in terms of keeping their margin in check. I did not show the revenue numbers in comparison between Oldtown and Power Root but I can say that Oldtown's ready to drink business is smaller than Power Root. However, Oldtown's margin is better. Oldtown's challenge is its cafe chain, which I think is also doing a turnaround (although this is a different article from me in the future).
As I have seen, the management of Power Root are pretty solid. They are founded by three people and just recently, they have done an exercise to include a substantial shareholder towards its International Sales GM. It has converted the shares in UAE into the holding company. I think looking at its performance towards its international sales, it is fair.
Additionally, its dividend yield is at an attractive 4.35% and seems like growing. This business has very strong cashflow and I think I am just back to basics i.e. buying cashflow based company and with very minimal debt.
Hence, I have decided to sell 10,000 units of Insas and Bought Power Root.
For those whom do not know Power Root, it is a company that sells the Alicafe and Ah Huat coffee brand. If I am a normal investor, I would have thought it would struggle in a crowded ready to drink coffee market. This market has Nescafe, Oldtown, Aik Cheong, Super brand, Pappa Rich and several more (even Starbucks included).
Despite these challenges, perhaps these figures would change some person's mind. Me included.
 |
| Power Root's financial numbers over last 7 years |
Translating those numbers into a chart, perhaps this is clearer and shows that the overseas revenue has grown from a negligible RM5 million in 4Q10 (Dec 2009-Feb2010) to RM50 million in its latest quarter. That is a 10x.
Local sales on the other hand has a respectable growth although not as strong as its overseas sales. Based on that trend, I would not be surprise that its overseas sales would exceed its local sales in the near future.
In terms of profitability?
I am not one of those who would sweat over quarter to quarter numbers. However if you look at the long term trend, it is fantastic. This shows that despite the tough market environment, the players are pretty obedient in terms of keeping their margin in check. I did not show the revenue numbers in comparison between Oldtown and Power Root but I can say that Oldtown's ready to drink business is smaller than Power Root. However, Oldtown's margin is better. Oldtown's challenge is its cafe chain, which I think is also doing a turnaround (although this is a different article from me in the future).
As I have seen, the management of Power Root are pretty solid. They are founded by three people and just recently, they have done an exercise to include a substantial shareholder towards its International Sales GM. It has converted the shares in UAE into the holding company. I think looking at its performance towards its international sales, it is fair.
Additionally, its dividend yield is at an attractive 4.35% and seems like growing. This business has very strong cashflow and I think I am just back to basics i.e. buying cashflow based company and with very minimal debt.
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