Bull markets are born on pessimism, grow on scepticism, mature on optimism and die on euphoria.

Wednesday, February 27, 2013

~ tAscO Q4FY12 ~

TASCO .. the traditional strong 4th quarter for Tasco did not happen this time. 

  1. Q4 revenue had dropped around 8% and to make it even worst is the net profit had dropped 44% y-o-y due to higher general & administrative expanses and tax expense. This caused the profit margin reduced to 7.74% from 12.3%.
  2. For full financial year 2012, it records an EPS of 28.89 cents, dropped from 34.59 cents in previous year due to lower revenue and higher general expenses & tax expenses. 
  3. Higher tax expanses due to expiry of the tax incentive scheme enjoyed in previous years for one of its business segment which equivalent to additional around RM3.7M being paid as tax. 
  4. PE increases to 7 based on today price of RM2.02 due to lower EPS. It's should be considered valued for a market capital of RM200m. 
  5. ROE for FY12 is 11.3 , down from 14.3 last year. 
  6. Full year dividend is 5.34 cents(interim) and 6.67cents (final) compare with 12.9 cents last year. 
  7. Cash balance remained strong with around RM50m cash and FD in hands (RM0.5 cash per share) with borrowings of RM32m at which RM19m of it is long term bank loan. 
  8. Current ratio remained strong at 2.37.
  9. Retained profits are increasing as well as its NTA. There is mathematical chances to issue bonus share to increase share liquidity. 
In terms of segmental revenue and PBT, 
Tasco's business is still driven by it's contract logistics division, contributed around 81% of its overall net profit. This poorer quarter is actually caused by its lower revenue for its international business solutions and lower profit margin of its trucking division. In terms of profit margin, its international business solution segment is really bad, perhaps it's more prone to effect of raising oil price, poor imports exports trade,currency exchange, high operation costs and others. 

In the prospects column of the quarter report, it mentioned FY13 will be a challenging year  due to uncertain global economic which affected the manufacturing and international trade and eventually affected its logistic business. Else where, it also mentioned the group will continue to excel particularly in its contract logistics division, which is good as it provides the biggest contribution to its revenue and drives more strict cost control to pare down the operation costs. Furthermore, there is rumour Tasco will form a merger with other logistics parties to improve its competitive edge. 

I will sideline myself in invest in Tasco until a clearer picture is to be seen since I'm working in a manufacturing site which the business is not good currently. 

Sunday, February 24, 2013

~ mUdAjAyA Q4FY12 ~

At first glance, it was definitely a disappointing 4th quarter for Mudajaya to sum up the year 2012. 

In terms of fundamental,
  • Revenue and PAT dropped at a 30% rate y-o-y. Based on the report's note, the lower revenue and PBT for the current quarter was mainly due to decreased delivery of equipment components for the 4x360MW coal-fired power plant in India.
  • Revenue in terms of segment,  trading & plant hiring and property development recorded an improving trend. But that was being dwarfed out by the construction segment which represents more than 90% of Mudajaya's revenues & net profit, recorded a lower net profit. 
  • Full year revenue increased 23% but PAT only increased marginally. This caused the net profit margin dropped from 17% to 14.3% for year 2012. 
  • Full year EPS increased marginally to 43.11 sen. PE is around 5.6 based on today price of Rm2.40. 
  • ROE for year 2012 dropped from 24.4 to 21.0, still >15. 
  • Full year dividends increased to 9 sen from 8sen last year. This translates into dividend yield of 3.75%. Management team only distributes around (9/43.11) 20% of net profit as dividends for this year. 
  • No outstanding borrowings.
  • Still remains cash rich with RM340m in hands. This translates into Rm0.62 cash per share. This is vital for its expansion or investment in future. 
  • Current ratio remains good of >1.0, which shows good liquidity. 
  • Share premium is as twice as share capital while retained earnings are 7 times more than its share capital. There is possibility a bonus issue will be held in future. 

Mudajaya still has an extensive amount in order book. Source: HLB. 

In short, Mudajaya still remains in my monitor list. No matter which party take charge of Putrajaya after the upcoming election, construction segment still considered as one of the areas where the new government will concentrate at. In terms of power plant construction, I do think Mudajaya will stand out against its competitors. Perhaps, the next market crash or correction will be a good price to enter. 

Saturday, February 16, 2013

~ tOp mOnEy tIps fOr mAlAysIA ~

Here came with the second book written by KC Lau I read about financial management. 
It mentions about the importance of financial literature from wealth accumulation, preservation to protection and some tips on money savings and accumulation in our daily lives. Frankly speaking, I'm feeling financial literature is getting more and more important in our life. Of course, it's easier to say than done. It's still useless if I do not act after I read and learn from all this stuff. I'm paying more attention to those economic section in newspaper nowadays and I also trying to influence the people around me to manage their financial pretty well in order to become a wealthy person. Hopefully everyone is on the path of getting what they want. 

Tuesday, February 5, 2013

~ AMFirst REIT AnAlysIs ~

Diversification is part of the investment strategies. Capital allocation is also one of the skills an investor need to master in order to meet his investment objective and target by taking a certain degree of risk. I have been considering to invest in REIT lately as I want to force myself to be discipline enough to spare part of my salary out monthly to invest in some lower risk & stable income investment provider for my retirement purpose. 

Then I came across AmFirst REIT.

AMFirst REIT is the one of the oldest and 9th biggest REIT in terms of market capital in Malaysia. AmFirst REIT has 9 properties in hands currently including the recent acquisition of Jaya99 in Melacca. The portfolio of buildings as shown in photo below; 

Out of the 8 properties shown in the latest quarter report, three of them are having a mere 72% occupancy rate. This was further highlighted in its annual report 2012 that the commercial office was oversupply in certain area. Management team has a big task to increase the occupancy rate of these 3 properties, but overall still manage to obtain a 90.3% occupancy rate recorded during the last quarter. 

Looking back at its top 10 tenants based on rental income, 45% of the income comes from AmBank group itself. HP multimedia and RBC Dexia taking up the place at Prima 9 and Prima 10 respectively which AmFirst REIT acquired back in year 2011. 

Total asset value and net asset value is improving for the past 5 years as it's normal circumstances that the properties do appreciate in value. However, its realized net income and distribution per unit did not show as significant as its net asset value. 

One more thing to note is its unit price always traded below its net asset value per unit. 

AmFirst REIT completed a right issue to raise a total proceeds of RM214million to pare down its gearing to 28% and to increase its share liquidity at Aug 2012. 

AmFIrst REIT declared an income distribution of 3.16cents for the six month period end Sept 2012. Recent acquisition of Jaya 99 will help contributes around 0.13 cents per unit. Expected the full year income distribution will be around 6.5 cents. Income yield is around 6.2% based on today price of RM1.05. 

Will it drops until RM0.90 per unit during a market crash as this will have a income yield of around 7%? Let's wait and see, at least you do not need to such homework when the market really crash or the price drops till your buying price. 

On the other hands, CF Liew published an interview with YP Lim, CEO of AmFirst REIT in his website. There were few questions being answered regarding the right issue, tenants mixing management strategy and rebranding exercise. Perhaps you can take a look.