tag:blogger.com,1999:blog-52792655921667172462024-02-19T17:35:07.874+08:00CTYapJourney to Financial FreedomAnonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.comBlogger128125tag:blogger.com,1999:blog-5279265592166717246.post-26743633141400903172015-09-11T15:00:00.000+08:002015-09-11T15:00:09.481+08:00George Kent: 2 significant contracts<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">In the span of few days, George Kent announced 2 new contracts that probably will enhance its group's earning moving forward.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The first one was the LRT 3 contract awarded by Prasarana Malaysia Berhad. The group and their JV partner, MRCB are the Project Delivery Partner (PDP) to build the LRT 3 from Bandar Utama to Johan Setia.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Total development cost is around RM9 billion. Construction work will begin in early 2016 and expected to be completed in Aug 2020. The JV will get 6% management fees. So, George Kent probably will get around RM270 million for the whole project, which translated into around RM45 million annually.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I not sure whether this RM45 million is considered as operating profit or net profit. To recap, the group's net profit for the past 3 financial years was RM25mil, RM36mil and RM28 million respectively. Nevertheless, the annual RM45 million from the said project will contributed significantly to the group's bottom line.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The second contract was the delivery of 600k units of water meters to Water Supplies Department (WSD), Hong Kong over the next 2 years for a total sum of USD7.17 million which is roughly RM31 million.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">From the press release, the group stated that this contract is the largest single order for the water meters division which further enhance their reputation in the meter industry. The meters will be delivered in 24 batches and the first shipment is in Oct 2015.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">In another statement, the group anticipated the contract will contribute around 0.29 sen for financial year end 2016. That's 4 months contribution since the first batch is to be delivered in Oct.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">0.29 sen is equivalent to RM871k in 4 months. So, estimate the 2-year contract will contribute RM5.2 million to the group's bottom line assumed the delivery is constant throughout the years.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Ignore the USD fluctuation, profit margin will be 5.2/31 = 16.7%. Strengthening of RM against USD of course will affect the earning.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So moving into next year,earning will be quite certain unless there is delay in the construction work for the LRT 3 project. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">For the rest of the current financial year, do not forget the contribution from the Ampang extension line and the stable contribution from the meter division. </span></div>
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<br />Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com2tag:blogger.com,1999:blog-5279265592166717246.post-52029501740618493032015-09-08T15:00:00.000+08:002015-09-10T12:10:11.691+08:00OpenSys: Surprise bonus issue<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">OpenSys just announced its 2QFY15 result last week.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcGjrKH77uNCiaUCQP70TQnnzSw9djtaZ9r1SL-I88_lfUoZYYxZ9nE2RDm4Jck7CeofEQps9tQQC7NdEW0lYaRKJulKvS7XkCuBO0EFookOLWy-hEgku7zV8aHhGRO05-5OZkMPtHhIMZ/s1600/income.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcGjrKH77uNCiaUCQP70TQnnzSw9djtaZ9r1SL-I88_lfUoZYYxZ9nE2RDm4Jck7CeofEQps9tQQC7NdEW0lYaRKJulKvS7XkCuBO0EFookOLWy-hEgku7zV8aHhGRO05-5OZkMPtHhIMZ/s640/income.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">At first glance, it was a bit disappointed as I afraid the good performance recorded in the first quarter may be one time off did come true.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">To recap, there was a jump in CRM machine sales in previous quarter.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">It was a normal quarter for the group, just the selling and distribution costs increased 20% compared to previous few quarters. I have no idea about the spike. It may due to higher marketing activities to improve the sales during the quarter.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The main highlight is the group able to reduce its net debt/equity ratio from 23% in the previous quarter to 1.8% only this quarter thanks to better operating cash flow that resulted in higher cash balance.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">From the segment reporting, it's good to see that the software outsourcing division was able to maintain above RM8 million revenue. Since the profit margin of the said division is much higher as well as the income is recurring in nature, the profit certainty and consistency are there.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Sale of machines is one time off and low in profit margin, but a small increase in net profit will help to drive up the EPS significantly like previous quarter.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group also announce dividend and 1-3 bonus issue.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Is CRM still the key moving forward? I think so but the pace of converting it may not be that fast.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Recently few banks are implementing VSS to cut operating cost. So, hopefully they are going to replace the ATM with CRM and also outsourcing their cheque deposit machine to third party to reduce manpower costs.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Combine the quarter results and looking back at my buying price, it did not serve much margin of safety. I may wait until next quarter or dispose it to buy other counters when opportunity arises. Still tempting.</span></div>
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<br />Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com1tag:blogger.com,1999:blog-5279265592166717246.post-6389435188512577632015-09-04T15:00:00.000+08:002015-09-04T15:00:08.162+08:00Aug 2015 Portfolio<div class="separator" style="clear: both; text-align: justify;">
August is a suffering month for me. </div>
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The feeling is not good when you see so many counters in red color and you're having unrealized loss. </div>
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So, it's better to stay away from it. Concentrate on finding the next stock :)</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8837wQKjLpAoC97RU_iYbGyGW0ti__z4S9FjGaErBbLAIpYXgdLddmZWxvMFz7tN312NoMkFrwzr6LgRRW948hT70SN5_HYnEXHgAA1TCDvKM1Xa0RoAK7hgGbkd6jy84yx5fq4V_Gdtp/s1600/Aug+2015.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="629" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8837wQKjLpAoC97RU_iYbGyGW0ti__z4S9FjGaErBbLAIpYXgdLddmZWxvMFz7tN312NoMkFrwzr6LgRRW948hT70SN5_HYnEXHgAA1TCDvKM1Xa0RoAK7hgGbkd6jy84yx5fq4V_Gdtp/s640/Aug+2015.png" width="640" /></a></div>
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For local, I sold off PJDev and half of my holdings in Puncak and Gkent to reserve some cash. Others stay the same.</div>
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For Singapore, CES and HMI continued its slide in share price. Ho Bee still staying strong with some buy back from the company. All three companies reported satisfying quarter result last month.</div>
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For HK, share price of both China Saite and Welling Holding continue to drop. Both companies reported slight drop in net profit for the first half of the year.</div>
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Unrealized performance dropped into red zone, mainly due to CES and Welling Holding as their weight percentage are higher. Dividend yield is quite high given the share price now, but dividend declared by CES this year involved special dividend which may not sustain to next year.</div>
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Overall cash level is around 35%. I think I have to better utilize the cash in order to recoup the losses.</div>
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Meanwhile, learning some technical chart through OTB subscription and also study the companies recommend by him. Mostly export-orientated and technology company.</div>
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For HK stocks, still keep studying companies although the pace is not as fast as I wish. Sometimes kinda lazy and procrastinated.</div>
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Well, need to get more interaction with positive-minded people for motivation. Haha</div>
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Or back to the target list I set in the beginning of the year may help :)</div>
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<br />Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com3tag:blogger.com,1999:blog-5279265592166717246.post-40943248892819988152015-09-01T15:00:00.000+08:002015-09-01T15:00:06.089+08:00PJDev: 4Q2015 Poor Poor Quarter<div class="separator" style="clear: both; text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">PJ Dev just announced its latest quarter report last week. I think its result disappointed many of us. And shock as well. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8aQEjjMKUqn24xn81Y0QzkyynbQKzG_DDF8c93sBdC5IM2_ahMBmkVogmoFlxWPj8eWGkqHfs8LKp9IgU_52Gk_8UoM_IY5tODsDFj87eas3Fr-axC83LwBxxH7jBAUSUGCHGzb_NyU4V/s1600/revenue.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="226" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8aQEjjMKUqn24xn81Y0QzkyynbQKzG_DDF8c93sBdC5IM2_ahMBmkVogmoFlxWPj8eWGkqHfs8LKp9IgU_52Gk_8UoM_IY5tODsDFj87eas3Fr-axC83LwBxxH7jBAUSUGCHGzb_NyU4V/s640/revenue.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">There was a one-off gain of asset disposal at corresponding quarter last year. I just deducted it out at operating level and net profit level for comparison. So, probably would be slight difference in reality.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group managed to record RM5.7 million net profit, poorest in 2 years.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Both revenue and operating profit margin also dropped.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Even worst is there was RM7.8 million loss in joint venture this quarter.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Net borrowings increased to RM362 million from RM135 million one year earlier. Net gearing ratio is around 0.3 which I think is still in comfortable horizon for a group whose main focus is in property development. Interest expenses increased two-fold from previous financial year. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Cash flow without doubt was negative due to significant outflow for the increases in land held and property development costs probably for Yarra Park City project that caused the group to take up massive borrowings. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhysp4q-ycng-UZyfAls9AgTKrFLnoOROne3eN7spOmB_SPBUFx9mYuKFpR-3h8TwUCnOthatb_UF-F-PlCGugzRmPT7bmvqb0XqOFgY0kSo2YPw3r68uJq2YEO8Zu1Ql0-blL2PTvCTMIv/s1600/segment.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="302" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhysp4q-ycng-UZyfAls9AgTKrFLnoOROne3eN7spOmB_SPBUFx9mYuKFpR-3h8TwUCnOthatb_UF-F-PlCGugzRmPT7bmvqb0XqOFgY0kSo2YPw3r68uJq2YEO8Zu1Ql0-blL2PTvCTMIv/s640/segment.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Segment reporting provides some clues on the drops in performance. Found out that the group's account statement changed quite much after audited. Q4FY14 result released last year was quite different from the pass year result shown in Q4FY15.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Poor performance from the properties segment was due to delay in launching Cheras You City and Genting
Windmill Upon Hills projects. But the group did mention that the take up rate in the respective Genting project was quite good after launched as well as voiced out concern regarding the slow down in the overall property market. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Both cable and building material divisions recorded lower revenue and even worst was the hotel segment continued its loss from last quarter. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Construction segment was the only bright spot. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group's prospect mentioned in the report doesn't sound quite good too. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">In another event, there was a statement stated that OSK Holding is deemed to have the control of the company even through OSKH has less than 50% of the voting right. But, the parent company probably will have more than 50% equity interest by the closing date. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">All in all, I probably will dispose my holdings in the group after some consideration. I think the share price will getting hard to reflect its high asset value after the acquisition/transfer end. It's such a waste as I owned it for a while and there was opportunity cost involved.</span></div>
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Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-32488348328163440942015-08-28T15:00:00.000+08:002015-08-28T15:00:06.064+08:00Chin Well: Q4FY2015 Moderate Result<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">After glancing through the quarter report, I think the result was quite moderate and a bit below my expectation.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhlO6qn9U7BaXVrLxgpmkMqpIfepBNFgDhMlb6TW7wavsxE5so8PnnYW8BdrLPOKt038_tg51u40cffL7BEG9FgGkpYHxT_dJVZFX4BGqW_ycyR0w8vRhd3LcqWjy8co0Ydng0U8oUqG5dR/s1600/revenue.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="482" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhlO6qn9U7BaXVrLxgpmkMqpIfepBNFgDhMlb6TW7wavsxE5so8PnnYW8BdrLPOKt038_tg51u40cffL7BEG9FgGkpYHxT_dJVZFX4BGqW_ycyR0w8vRhd3LcqWjy8co0Ydng0U8oUqG5dR/s640/revenue.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Revenue increased marginally if compared to corresponding quarter last year. Unfortunately, its gross profit margin dropped significantly from 24.8% to 16.5%.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Even coupled with lower administrative expenses and marketing expenses, the group posted much lower net profit in the end.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Since the acquisition was completed at previous quarter, the group does not need to share the result to the minority parties anymore.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Assumed the group taking full control since the beginning of the financial year, full year EPS would be RM49.4 million net profit divided by around 300 million shares, which equivalent to 16.46 cents. PE is around 8.5.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">In terms of balance sheet, one thing to highlight is the group able to reduce its net debt position from RM25 million to net cash of RM2.1 million even taking into account of RM8.3 million to pay for the acquisition. That's a very healthy sign.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">This was contributed by its strong cash flow and positive high free cash flow. Minor set back was the group made an inventories write-off of about RM4.5 million.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgp3VDzk1-aOz5WK5fJ3TFp0SnjByAXxlTm7x4Uwpc6HZxDguSS2n4ZOrHjjWS8Y_iOwbPGituVqxTIBD1SUWbZ05xEFpAUaJztbI3jo8IpcW9dCg0-J9_K7261rxNUqJ2TXDFtgsO_8Nt/s1600/segment.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="134" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgp3VDzk1-aOz5WK5fJ3TFp0SnjByAXxlTm7x4Uwpc6HZxDguSS2n4ZOrHjjWS8Y_iOwbPGituVqxTIBD1SUWbZ05xEFpAUaJztbI3jo8IpcW9dCg0-J9_K7261rxNUqJ2TXDFtgsO_8Nt/s640/segment.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Fasteners segment posted poorer result this quarter. Management explained that it was due to demand slow down in European countries as well as product mix that generated lower profit margin products.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Surprisingly, the Wire segment posted a loss in this quarter. I expected it to post a good result due to new product of panel fence being launched. But things went to the other way as revenue dropped. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Management also did not mention anything regarding the DIY products that the group emphasize all this while as DIY products fetch higher margin. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">In summary, it still depends on its growth prospect in the Fasteners segment and its stability in the Wire segment.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"></span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Situation in European countries also affected its performance as much of the group's sales was export to this region</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">At a PE region of 8-10 may not provides much growth in the share price as current sell down in the market caused many companies selling at cheaper price and higher dividend yield. </span></div>
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<br />Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com3tag:blogger.com,1999:blog-5279265592166717246.post-79208088561853111952015-08-24T15:00:00.000+08:002015-08-24T15:00:09.376+08:00LCTH: Export definition a bit confusing<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I get little bit confused when I read LCTH's 2014 annual report regarding its Local and Export segment reporting. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXWlQgK_xgxbSmv-JPt1v5tq6M4blUeefeoU79UEUVaKBX_9_-jd790MIiUnn9mE-TXYXKW-tt76Kf91GbUasPpNsJpWTn5fM7nIG6InnSDMaxXr6xQEIpurxOxQQDBpX65Lk3WlI9YdRa/s1600/segment+reporting+2.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="260" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXWlQgK_xgxbSmv-JPt1v5tq6M4blUeefeoU79UEUVaKBX_9_-jd790MIiUnn9mE-TXYXKW-tt76Kf91GbUasPpNsJpWTn5fM7nIG6InnSDMaxXr6xQEIpurxOxQQDBpX65Lk3WlI9YdRa/s640/segment+reporting+2.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">At first glance, more than 90% of the group's products were export to other countries. The strengthening of USD would be a happy situation to the group. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgewCtGB7vbMVEYYScZd0XKfV9ORSlprtZPqUs397Tu2sd0oINor0qJV_KZKyf0KZkBFUnWjqyOCNZ_KglY06Cz7qlhqRXt6eTBf9H_5Rt2IoMPHCjJbMLQGtNJ35leIcoxz2T5omyu-x-v/s1600/segment+reporting.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="192" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgewCtGB7vbMVEYYScZd0XKfV9ORSlprtZPqUs397Tu2sd0oINor0qJV_KZKyf0KZkBFUnWjqyOCNZ_KglY06Cz7qlhqRXt6eTBf9H_5Rt2IoMPHCjJbMLQGtNJ35leIcoxz2T5omyu-x-v/s640/segment+reporting.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">But when I read the definition of Local and Export market given in the annual report, it's noted that local market refers to customers within Malaysia who are non Licensed Manufacturing Warehouse. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">For those customers in Malaysia who are LMW are considered as Export market as well as overseas customers. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I checked through online and found out that Licensed Manufacturing Warehouse (LMW) is a premise licensed under
section 65A of the Customs Act 1967 and is directly control by Royal Malaysian
Customs. It is control by way of documentation and subject to all customs rules and
regulations. Licensed manufacturing warehouse is a facility provided for export
oriented companies too.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Though I not very understand, I guess it's a register platform for the company to export the products oversea. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUG1ipiaHTORsMwBuUMOieMK5ayXwSOCoAyQ_ONc9AcL4m4W_nRxQqRtRoJ-3XDIn4KzxHIAe-kqeYJAE6JjS6xnIKrlChGEK8IXYQEe5lghQ_4QOSwEEbWCnP97_ze5F6hg4ilBaDfzz5/s1600/geographical+info.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="264" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUG1ipiaHTORsMwBuUMOieMK5ayXwSOCoAyQ_ONc9AcL4m4W_nRxQqRtRoJ-3XDIn4KzxHIAe-kqeYJAE6JjS6xnIKrlChGEK8IXYQEe5lghQ_4QOSwEEbWCnP97_ze5F6hg4ilBaDfzz5/s640/geographical+info.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Based on geographical information, RM91.45 million revenue was from Malaysia. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Minus out RM4.69 million from the Local Market, thus RM86.76 million was related to sales to LMW in Malaysia which equivalent to 68.8% of overall sales. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">While the direct sales to overseas market (SG, US & others) accounted to RM34.59 million, which equivalent to 27% of overall sales. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, question remained is sales to LMW in Malaysia is denominated in RM or USD?</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhJH9ga0Z6JhDh74fTItZ76Db_CVyJNLiXSv-H_8br6ZlwB5zbIlNrjVTGLPkMrohU3S1bAVAw5Io07-spTHHR9eh6GnmQup8Ubul_XTINiUwJJGO_NJZueqHn65VHnaccbHYcqOqVtODGl/s1600/foreign+exchange+risk.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="388" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhJH9ga0Z6JhDh74fTItZ76Db_CVyJNLiXSv-H_8br6ZlwB5zbIlNrjVTGLPkMrohU3S1bAVAw5Io07-spTHHR9eh6GnmQup8Ubul_XTINiUwJJGO_NJZueqHn65VHnaccbHYcqOqVtODGl/s640/foreign+exchange+risk.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I flipped into Foreign Exchange Risk section, management highlighted that 58% of the sales were denominated in foreign currencies while around 51% of costs were denominated in RM in FY2014. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, estimated half of the sales to LMW in Malaysia was denominated in foreign currencies. (Just rough estimation after minus out 27% direct sales to overseas market). </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">One thing is confirm is 58% of group's sales are denominated in foreign currencies while half of its costs are denominated in RM. That is a good thing in this RM weakening trend although the variation was quite high compared to previous year. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Another sure thing is the group's USD denominated receivables was higher than its payable. That's good for the group moving forward too. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, the strengthening of USD works well for the group though not to the great extend at first glance that more than 95% of overall sales were for Export Market. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Now left with how the management going to increase its sales as the sales were quite stagnant for a while... </span></div>
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Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-55372332894368994032015-08-17T15:00:00.000+08:002015-08-18T10:08:30.940+08:00PJDev: Another plan in the making? <div style="text-align: justify;">
<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">For the past one two weeks, I guess everyone who pay attention to PJDev's announcement in Bursa website probably has no difficulty</span><span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"> to note that OSK Holdings Berhad had keep on acquiring PJDev shares through open market. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqXVBv6ikzcB6ihTxBwH0jDcTprIGE9_CbTTY1wtcuGMkASJFdfTvv-yJGcNiMJPFqGhbNFdGcy05WSHoVXE0MHNLxSdFLtByJu0aRfcKXlZJNVo_PXhqyNSfI0FEXlz6DEjihF_E_k7Fe/s1600/announcement.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="556" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqXVBv6ikzcB6ihTxBwH0jDcTprIGE9_CbTTY1wtcuGMkASJFdfTvv-yJGcNiMJPFqGhbNFdGcy05WSHoVXE0MHNLxSdFLtByJu0aRfcKXlZJNVo_PXhqyNSfI0FEXlz6DEjihF_E_k7Fe/s640/announcement.png" width="640" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNM-FCKrXfFMvRXCvGOeb68NTQkomaKsAIAzC9Y-1vF4-LAPTQdbKVcVbJe4DzSQ0kT4V8Ig0wFItpkqCG3GtAj4MLZZOdII67ymULx50EiCBd4joHkzeApg-gQPsyqmlsQHzMSYA-utjy/s1600/OSK+Holding%2527s+acquisition+via+open+market.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="310" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNM-FCKrXfFMvRXCvGOeb68NTQkomaKsAIAzC9Y-1vF4-LAPTQdbKVcVbJe4DzSQ0kT4V8Ig0wFItpkqCG3GtAj4MLZZOdII67ymULx50EiCBd4joHkzeApg-gQPsyqmlsQHzMSYA-utjy/s640/OSK+Holding%2527s+acquisition+via+open+market.png" width="640" /></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">From the first transfer of shares on 23-July, Tan Sri Ong Keong Huat had acquired PJDev shares through open market almost non-stop until today. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The transacted price was around RM1.55, slightly lower than the offer price. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Up to date, the number of shares acquired by OSK Holdings Berhad through open market is 31.46 million shares. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">His ownership in PJDev now is around 38.52% from 31.59%.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">With average transacted price of RM1.55, total purchasing cost is RM48.76 million. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, what is his plan? </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">To make it as OSK Holdings's subsidiary instead of investment in associate? </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">In order to have at least 50.01%, OSK Holdings need 11.49% ownership more. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">That's equivalent to around RM80.77 million more. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">But do not forget PJDev at the latest quarter had RM150million cash on hands, RM253million property development costs and RM557million of land held for property development as well as RM600 million unbilled sales in hands. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Though they have around RM520 million in borrowings. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, another good asset being steal away? </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Can offer better price or not? </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div>
<div style="text-align: justify;">
<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">Or investors should directly buy OSK Holdings?</span><br />
<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"><br /></span></div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">
</span>
<br />
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Interesting .. </span></div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">
</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Let's see what is the outcome when the mandatory takeover offer end in few weeks time. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com3tag:blogger.com,1999:blog-5279265592166717246.post-39901663274769607162015-08-11T15:00:00.000+08:002015-08-11T15:00:06.436+08:00AWC Berhad: Qudotech and DDT Acquisitions<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Just a fortnight ago, AWC berhad made an announcement to propose to acquire QudoTech and DD Techniche for RM26.5 mil by combination of cash and issuance of 30.66 mils new shares at a issue price of RM0.38 worth RM11.65 million.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The acquisition is expected to be completed in 4Q15</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8Z3rDfmblEzi28EwEoiosswrOrGfIf2cBXTlXKz6bA1sNtB8aio9QUgEblKGebBKEDTpKfhrYqsiUx6QadSUIuEjN8xMBlgpt2ckZHqxPRdjuJtUEtpvjM1EJNDBT_d7OuRODAfnvJQYb/s1600/Profit+guarantee.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="165" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8Z3rDfmblEzi28EwEoiosswrOrGfIf2cBXTlXKz6bA1sNtB8aio9QUgEblKGebBKEDTpKfhrYqsiUx6QadSUIuEjN8xMBlgpt2ckZHqxPRdjuJtUEtpvjM1EJNDBT_d7OuRODAfnvJQYb/s400/Profit+guarantee.png" width="400" /></span></a></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The vendors made a profit guarantee of combined RM3.9 mils profit after taxed for each of the next 2 financial years.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">In case there is any shortfall between the PAT of the target companies and the profit guarantee, the payment to the vendors will be reduced by the same amount of shortfall.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKs02WazOAQv-taZ-eVbLh9DT7HG_btlCzYKQSxcXE2ArJpVniF_1SDmKucZwkeYwAES_-BqZLxD1ZkdDrdVBG-Rho_4RbBHYbsjuiQ15i4Bn2v92Ne8ZlHaituO4JcbqZPmxILP_Cvigf/s1600/funding.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="258" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKs02WazOAQv-taZ-eVbLh9DT7HG_btlCzYKQSxcXE2ArJpVniF_1SDmKucZwkeYwAES_-BqZLxD1ZkdDrdVBG-Rho_4RbBHYbsjuiQ15i4Bn2v92Ne8ZlHaituO4JcbqZPmxILP_Cvigf/s400/funding.png" width="400" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group will issue 30.65 millions new shares which is equivalent to 13.6% of existing share capital at a issue price of RM0.38 to raise RM11.6 million while the rest of acquisition cost comes from internal cash and the payment is made in 3 phrases.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The first RM7 million is the down payment while the second and third payment only need to be paid upon confirmation that the profit guarantee is met at the end of the respective financial years.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Based on the profit guarantee, PE will be around RM26.5/RM3.9 = 6.79.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Unfortunately, the acquisition announcement did not show much details on the 3 financial statements of the 2 target companies, so EBIT/EV could not be measured.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEik3vktwXxUgCLSr3b2DhNObp2ZotCceeJW8qMj_J3s1IS-_lU5S9okNyuRGk8byMgt4jdxhwZD6l8gxoq9UNQFI9O0GZMnhl6TXfOEJaaCIra0mSw6n8IcVlBZBucmUYdH4xRjt0jjnW3n/s1600/QudoTech.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="228" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEik3vktwXxUgCLSr3b2DhNObp2ZotCceeJW8qMj_J3s1IS-_lU5S9okNyuRGk8byMgt4jdxhwZD6l8gxoq9UNQFI9O0GZMnhl6TXfOEJaaCIra0mSw6n8IcVlBZBucmUYdH4xRjt0jjnW3n/s640/QudoTech.png" width="640" /></span></a></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Qudotech involved in M&E engineering works, specifically in all manners of plumbing works and currently has RM66 million order book on hands.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Revenue was increasing for the past 3 years. What's more with increasing profit margin with the latest half year result record at 12% net profit margin, up from 7% in FY2012. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">ROE was more than 30% too with minimal borrowings and gearing. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQsFyvQPB6-B2sdB78vclaE5DPhWaMBKEU_-VIKjz0Jjy092M9c8DpKfj8-YOhJHZVL9L52gsCvJsNchLs501DZEJKoQqc_QyoXNdna1tv_UXjal2BrapDdpC5msddRJw5G7-CLpLYNKxr/s1600/DDT.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="227" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQsFyvQPB6-B2sdB78vclaE5DPhWaMBKEU_-VIKjz0Jjy092M9c8DpKfj8-YOhJHZVL9L52gsCvJsNchLs501DZEJKoQqc_QyoXNdna1tv_UXjal2BrapDdpC5msddRJw5G7-CLpLYNKxr/s640/DDT.png" width="640" /></span></a></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">DDT is involved in contracting for mechanical works, piping and systems design for rainwater harvesting products and trading of specialized water tanks. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">DDT is considered as a new start up company. The company just incorporated in 2012. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Net profit was increasing too with expected closed to RM1 million net profit would be recorded in the latest financial year ended June 2015. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">DDT stands to benefit from the regulatory to make rainwater harvesting systems a
mandatory part of building plans for commercial and industrial buildings with a roof area equal to or exceeding
100 square meter in Perak, Selangor, Johor, Melaka, Kelantan and Perlis. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, I think it's not that hard for the 2 target companies to meet the profit guarantee of RM3.9 million. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgl2DOh7K8jHIxmuKvPWRR1Ij-pCANMbvTmRIYKs96Ru7RylVyZoungtSJAq94vJ3joMP6yZF_Iw8n__BJjgt3tMgIRrtGHGK0rbYJjo2OSTzAHC555mgYZplOqJUqXJxgRY0hjm5QVJnZx/s1600/Expected+EPS.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="196" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgl2DOh7K8jHIxmuKvPWRR1Ij-pCANMbvTmRIYKs96Ru7RylVyZoungtSJAq94vJ3joMP6yZF_Iw8n__BJjgt3tMgIRrtGHGK0rbYJjo2OSTzAHC555mgYZplOqJUqXJxgRY0hjm5QVJnZx/s400/Expected+EPS.png" width="400" /></span></a></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">There is a proforma shown based on the profit guarantee added on top of the net profit attributed to the shareholders at FY2014 and divided by the enlarged no. of outstanding shares, EPS is 4.24 cents.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Based on the share price now, the valuation may not cheap. Worst case, the EPS will be diluted due to the ESOS implementation.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">And historical record showed that the group's existing business is not so stable especially the engineering division.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Margin of safety is not there.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Will only look at it again when the price is right or the group's fundamental improves.</span></div>
<br />
<br />Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-42935452823041246342015-08-07T15:00:00.000+08:002015-08-07T15:00:11.680+08:00AWC Berhad: Getting more than ABC<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhM0Wv-RYtNRG8ERtiQuHNWkFF-EAdJMaTPvLcm5_HUrlJNc335iP12TzvLpE52YEaMrHlfFE5P5PKqcuVoL5rfnGA_93vi6PLVoLod6eqC32nXYEucjM1zpj14ToSzbDbIpKhBZyxeub-5/s1600/AWC+berhad+logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="246" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhM0Wv-RYtNRG8ERtiQuHNWkFF-EAdJMaTPvLcm5_HUrlJNc335iP12TzvLpE52YEaMrHlfFE5P5PKqcuVoL5rfnGA_93vi6PLVoLod6eqC32nXYEucjM1zpj14ToSzbDbIpKhBZyxeub-5/s400/AWC+berhad+logo.png" width="400" /></span></a></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">AWC Berhad is not a well known company with market capital less than RM100 million. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I came to know him when the group made an announcement regarding its acquisition that will probably increase its top & bottom line. After watching how latitude, chin well, Ge-Shen and KESM performed after acquisition, I think I need to spend some time to understand it. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group has 3 divisions,</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Facility division involved in asset management services providers such as cleaning, civil & Structural works, M&E maintenance, parking, landscaping and transport system. Facility division holds the 10-year concession to provide maintenance for some buildings of Federal Government Common User buildings and contributed a bulk to the group's revenue.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Engineering division provides Ventilating & Air-conditioning system, Building Automation System and Security & Crisis management system to clients. It also distributes valves and hydronics systems.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Environmental division provides automated waste collection system called STREAM to transport municipal solid waste via pipes to a central waste handling facility. So that the waste collector does not need to go door-to-door to collect the waste. It's noted that the group owns only 51% of this division</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMTbAzi0f_x05dBZzQ45Dci4psNDycQpnR61auRwBAQAzxaReocOYUIyAyHCd5lNGqHOjVfNjwH7hNWszhwM-8Pkv9Rx7y7t1erpMy8vLXbmHqmoboFhyphenhyphen7aEsfTwhZdLZhFYjHwKs6W0oM/s1600/REvenue.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMTbAzi0f_x05dBZzQ45Dci4psNDycQpnR61auRwBAQAzxaReocOYUIyAyHCd5lNGqHOjVfNjwH7hNWszhwM-8Pkv9Rx7y7t1erpMy8vLXbmHqmoboFhyphenhyphen7aEsfTwhZdLZhFYjHwKs6W0oM/s640/REvenue.png" width="640" /></span></a></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group made a loss at FY2008 due to poor performance as well as one off provision and impairment. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">That year, the group developed a Business Transformation Plan (BTP) to refocus on its core business, improve human capital management, develop the group's facility division into market leader and expand its STREAM business to Middle East. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Well, the management able to improve the group's performance from loss making, but not to the extend that called splendid or awesome. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group's performance thereafter was quite volatile, maintained around RM100-200mil and RM4-10mil top line and bottom line respectively. Net profit margin was 3-6%.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group once had a technology division (IQL group) before but it made RM3mil and RM7.3mil losses in FY2011, FY2012 respectively. Soon, the group decide to divest this division in June 2012.</span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQem4F_h9y302gx2b9OXn7ujbNW2k9PtLn7_4PdcD3b4452Zj6KL8BTEvDHqWN8G2bn7xwQaI2lMmcRWrQDgDeOjZIY83TgTs1YH7dpjH2GdrvWCO5cc-ZzlbTFxsfOs_oDRjg2x21yuK7/s1600/Cash+flow.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="380" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQem4F_h9y302gx2b9OXn7ujbNW2k9PtLn7_4PdcD3b4452Zj6KL8BTEvDHqWN8G2bn7xwQaI2lMmcRWrQDgDeOjZIY83TgTs1YH7dpjH2GdrvWCO5cc-ZzlbTFxsfOs_oDRjg2x21yuK7/s640/Cash+flow.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">In terms of balance sheet, the group was in net cash all this while with minimal borrowings. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">This can be explained by the group need very less amount of capex every years.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Its operating cash flow was well-supported by the concession with the government. Just sometime the increases in trade receivable dragged the operating cash flow into negative region, probably due to Middle East contracts. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvJL8abGtM86SFAp0vhq39v64xYXRO86gmbxGAMAcrARQuFQEchbi-2YOkszoU0_ZQhTpbHkikCmiIyfYiTqWb93cV41w9NQC5ssnviLnXrA1p28yf_K_x2d49pxg1lR3xBuyrQUQ303aF/s1600/Return.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="380" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvJL8abGtM86SFAp0vhq39v64xYXRO86gmbxGAMAcrARQuFQEchbi-2YOkszoU0_ZQhTpbHkikCmiIyfYiTqWb93cV41w9NQC5ssnviLnXrA1p28yf_K_x2d49pxg1lR3xBuyrQUQ303aF/s640/Return.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group's cash conversion cycle was below 90 days all this while which is considered okay to me. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">In terms of ROE, the group managed to record only single digit number for the past few years. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">For its ROIC, it's around 15%, except the spike recorded in FY2010 and FY2011 due to better operating profit. It's noted that in 2011, the group cancelled out RM0.20 out of par value of RM0.50 to RM0.30 to off-set the accumulated losses.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Its engineering division did not fare quite well all this while, its profit margin was quite low and contributed very minimal to the group's bottom line</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group was focusing more on its 2 other divisions, namely facilities and environment.</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Facilities division provides stability to the group. 75% of the Facilities's revenue derived from the concession with the government to provide asset management service while the rest came from the private sector. But the management need to manage its operating costs very well and it's noted that the electricity costs account for more than 40% of the Concession's cost of sales. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Environment division depends on its STREAM, the automated waste collection system. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Throughout the past few years, the group managed to clinch some contracts in UAE through the job venture with Model Building UAE and Dallah Establish to design and supply automated waste system. However there was a second project in Al Reem Island worth RM150 million was delayed until today as the development there was stop. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Apart from that, STREAM is well-accepted at our neighbor country, Singapore too. The group was also awarded operations and maintenance contracts for the STREAM systems such as in Terminal 3 Changi and Resort World Sentosa after completion which provide recurring income to the group.</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">With lesser amount of development in near future, it's expected the award of STREAM system to the group will slow down. But nevertheless, the system is quite good in terms of convenience, cleanliness and cost saving. It's just matter of time the developers will start utilize such system in their development especially at place where space is limited. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Based on some online articles, the division had around RM60 millions order book at the end of Dec 2014. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, that's the basic study on the group</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Will discuss the acquisition in the next post. </span><br />
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Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-6065808434968453382015-08-03T15:00:00.000+08:002015-08-03T15:00:07.424+08:00July Portfolio<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZkglBuida0p35CHyG9CvxNHgkqUpYRi2GZEzbda7VyXzCutTq6QFmEBp1kMDVAy9IESPtOpGQTO7AC4vl94-D94Sw_yHlnF4vtqYSHI82OANQ5igy7ZjZaO5tFgKrbbxRL_rI1gu6GofF/s1600/July+portfolio.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZkglBuida0p35CHyG9CvxNHgkqUpYRi2GZEzbda7VyXzCutTq6QFmEBp1kMDVAy9IESPtOpGQTO7AC4vl94-D94Sw_yHlnF4vtqYSHI82OANQ5igy7ZjZaO5tFgKrbbxRL_rI1gu6GofF/s640/July+portfolio.png" width="534" /></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">July was a poor month for me. Un-realized gains had dropped to almost zero. Have to get myself ready to face any negative performance soon.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">This month's poor performance was dragged down by HK and SG stocks especially the 3 HK stocks that saw more than 10% drops m-o-m.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">China Silver was the most hit and it just issued a profit warning after last Friday closed. I probably will sell off the remaining shares as the management expected that the group will announced no less than 90% drop in net profit for the first half 2015. That was a shocking news to me. Never expect that.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">China Saite too having a roller coaster ride last month, dropping more than 50% from its recent high and now forming a base around HK1.2+. Let's see what is the result they are going to release in few weeks' time. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">CES's price continued to drop last month. It's same for HB land. Probably need to hold both property/construction counters for a while. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">HMI's price also in declining mode. No more news regarding its Mahkota Hospital sale.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Add in Gkent in my portfolio few days ago. I have been following George Kent all this while and made a few bids before this but all did not fall into my bidding price. So, I just watched the price went up and up. In the end, I was too emotional and bought it right away. Just a bet that they are able to get the contract on the LRT 3 project. And if the current Ampang LRT extension project is on schedule, its engineering division will post better result moving forward. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Recently was little bit busy and also (lazy) to study new companies :(</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">August is another month that most companies will release their quarter reports. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Have to get up and keep moving forward. I also signed up OTB's course and hopefully able to learn some technical skills to brush up my buying and selling technique. </span></div>
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<br />Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com2tag:blogger.com,1999:blog-5279265592166717246.post-34543173966518475462015-07-27T15:00:00.000+08:002015-07-27T15:00:13.136+08:00Sun Con: Q1 2015 Result<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Sunway Construction group is going to list in few days time and the group just announced its first quarter result few days ago. </span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">It was a stable quarter for the group. Nothing special to mention on its income statement. No comparison data was given and I was little bit lazy to check back the bottom line contributed by the Construction group to Sunway group preceding quarter last year. </span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">Balance sheet was normal, just the trade payable dropped quite much. </span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">Operating cash flow was weak. It would be zero or negative if not for the dividend contribution from its associates and JV. </span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">What's interesting is still the segment reporting. </span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjaPPgKh0KmxPlP12txZca5ZkLENg0uJnl-_g9iGHigj1CfVe8k8_XCWgK-eQyPWvnHpEx0iEAThNpA6fKhuKJ8j8dPBDMMNgsdVLF-56mfGk7YKDPBjEMC8Z6QRAT8pDW-nt3m97nxSKUe/s1600/segment+reporting.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="490" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjaPPgKh0KmxPlP12txZca5ZkLENg0uJnl-_g9iGHigj1CfVe8k8_XCWgK-eQyPWvnHpEx0iEAThNpA6fKhuKJ8j8dPBDMMNgsdVLF-56mfGk7YKDPBjEMC8Z6QRAT8pDW-nt3m97nxSKUe/s640/segment+reporting.png" width="640" /></a></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">It's clear and I think I mentioned in my previous post before that although the construction segment contributed a big amount to the group's revenue, but due to its lower profit margin, Precast segment contributed more to the group's bottom line. </span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">Operating profit margin for Construction and Precast were 3.21% and 23.4% respectively. </span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">Its precast concrete products are mainly supply to projects in Singapore. So, any slowdown in Singapore construction and property development will have great impact on the group's precast unit. </span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">I guess the media kept focusing on how many and how big the contracts can be awarded to the group. But since the profit margin is so low, any cost overrun or mis-estimation would get the group into trouble. </span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">Investors have to keep note of that :) </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-33599835163980414542015-07-20T15:00:00.000+08:002015-07-20T15:00:14.345+08:00Review on 1H2015 sell transaction<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Everyone also wishes to buy low and sell high. I mean everyone. But that's not the case in reality. That may be someone able to do it, but I think the consistency is not there. </span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">I'm am not a very long term investor. I will sell it if I think the price meet my target or I think I have better return elsewhere.</span></div>
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<div style="text-align: justify;">
<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">So, half year gone and I think it's better for me to review my sell transactions for the past few months. </span></div>
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<i style="color: #0b5394; font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"><b>SCGM</b></i></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">I sold it at RM2.7x with around 50% gain in April. Although I knew the drop in oil price and currency exchange are all working in favour for the group as well as its own organic growth and new product launching, but I think its price already reflected that as well as it was trading at a PE of around 18 that time. So, I made a sell call. The company continue to perform well and so its share price till trading at RM3.4x currently. Perhaps I should use forward PE to evaluate this kind of growth stock next time. </span></div>
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<span style="color: #0b5394; font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><b><i>ABRIC</i></b></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">ABRIC was a asset play for me due to its high net cash per share. I sold it around RM0.52 with around 25% gain in April too. Patience always the key when investing based on asset as you have no idea when the market will value its assets. The price once shot up to around 60 cents before retraced back to current price. I'm quite satisfied with this transaction as asset play always provides certain margin of safety and its concept is easy to understand. Just sometimes, you may need to park your capital there for a while. </span></div>
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<b style="color: #0b5394; font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"><i>PJDEV-WC</i></b></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I sold it at a loss of around 10% in April too. I bought it at a rush and at a high price in the beginning as well as its mother share. I thought the corporate transfer will take place within 6 months, little bit I know it can be taken for so long. And at that point, I was running out of capital so I decided to sell it as I did not want to place too much capital on the same stocks (mother & son) although the warrant will provide better gain in percentage and loss also in opposite. I only left the mother share and used the proceed generated and converted into HKD to invest in HK stocks. </span></div>
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<b style="color: #0b5394; font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"><i>IFCAMSC</i></b></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I sold the counter around May at RM1.4x with a gain of around 70%. The counter once shot up to RM1.8x plus as well as being dumped until RM0.8 thereafter. The counter still has some growth prospect, but the valuation is quite high and there is some sort of frying element on it. So, I decided to say good bye to him. </span></div>
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<b style="color: #0b5394; font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"><i>TAKASO</i></b></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I made a loss close to 25% in this short trade. I bought its warrant & converted them into mother share as the share price of the mother share up a lot while the warrant did not move very much. The substantial shareholders, Ong Kah Hoe kept increasing his ownership in the group and the group diversified into construction business look like something good going to happen. So, I bought in. It turned out to be a bad trade as the share price dropped a lot after 2 weeks of conversion. This really taught me a lesson, never touch warrant that trade at a big discount to his mother share again. Fishy fishy. </span></div>
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<b style="color: #0b5394; font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"><i>CHINA SILVER</i></b></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I cut half of my holdings on the stock at around 150% gain, so the remaining will be considered as free shares. This trade contributed significantly to my overall realized gains this year. It's share price is quite volatile but I think its coming half year result will be quite good. So, I will just keep it for the time being. </span></div>
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<div style="text-align: justify;">
<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">So, that's for this half year. </span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">Some losses, some gains. </span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">When looking back now, there are some stocks trading higher after I sold. Some trading lower currently. </span></div>
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<div style="text-align: justify;">
<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">I believe buying low solves the problem of selling as you still earn in the end, it's just the matter of how much you earn. So, margin of safety is important. Very important indeed.</span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">I still learning day by day. Hopefully, can minimize my mistakes moving forward. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com1tag:blogger.com,1999:blog-5279265592166717246.post-34807165704051611512015-07-13T15:00:00.000+08:002015-07-13T15:00:08.070+08:00Recap on last week<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Market was bit volatile last week.</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Greece issue and Chinese stock market sells-down as well as Najib and his 1MDB issue in local filled up the newspaper's headlines. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">And on last wednesday, Hang Seng index closed almost 6% down, its biggest one-day drop for nearly seven years. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Nearly half of the listed companies in Shanghai and Shenzhen filed for trading halt in an attempt to prevent further losses explained the seriousness. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Even the regulatory commission made a new rule that controlling shareholders and managers who are holding more than 5% of the company's share could not reduce their holdings for 6 months could not stop the sold off. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Local bourse index dropped below 1700 again, after few months of crawling back to above 1850.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, is it a good chance for investors to buy some fundamentally good companies during this volatile market?</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Just like what Warren Buffet said "Be fearful when others are greedy and greedy when others are fearful" ?</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">But it's always easier to say than done. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Watching your paper gain getting lesser and lesser is no joke. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">And to buy it when the counter drops more than 50% made you wonder is it something bad happened to the company which you may not aware of.</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The angel of your side told you that the company fundamental remains unchanged. You had studied it few times and it's a bargain now. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">But the devil of your side told you to wait and it may drop even lower. Your hard earn money will just gone like that. It's very scary. Stay aside first. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Discipline, mentality and decision making. 3 important elements that you cannot learn from books and others. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Experience it </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Investing really is a life long journey. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com1tag:blogger.com,1999:blog-5279265592166717246.post-59202258938964666642015-07-09T15:00:00.000+08:002015-07-09T15:00:08.819+08:00George Kent: Q1FY16 update<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">George Kent just released its first quarter result last week. </span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFEvUOTBpq47-FZvlvQGlf0YAuB8GPvmjfudAJ8iHM0vK1RnZLOWpExYQRZj4DtOXxIOWsJgxUNoZjSnkHlOXPfLxIoqT8E_dvZu0dcvlR2lxoB44kYz5yfHt0kAD6F4z2NOe50noypfje/s1600/Income.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="512" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFEvUOTBpq47-FZvlvQGlf0YAuB8GPvmjfudAJ8iHM0vK1RnZLOWpExYQRZj4DtOXxIOWsJgxUNoZjSnkHlOXPfLxIoqT8E_dvZu0dcvlR2lxoB44kYz5yfHt0kAD6F4z2NOe50noypfje/s640/Income.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group recorded lower revenue compared to same quarter preceding year and almost half if compared to previous quarter. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">But thanks to its much better gross profit margin, the group able to record better bottom line. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Operating income and expenses almost similar. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">No dividends was declared. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHud9QjZ2kiuydQRjkUPsMg5ZzD_5LlBRFwSX0NgJwnwlZ7ayTSM77NWOQUOAlaGmaJsgdWv78wxfmtCIMbUxmckr3xET6OJ-qJgCZyU9uZ6IhCuketBwO69RkraYgilJFjcDBG7EEdcwd/s1600/Balance+Sheet.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="252" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHud9QjZ2kiuydQRjkUPsMg5ZzD_5LlBRFwSX0NgJwnwlZ7ayTSM77NWOQUOAlaGmaJsgdWv78wxfmtCIMbUxmckr3xET6OJ-qJgCZyU9uZ6IhCuketBwO69RkraYgilJFjcDBG7EEdcwd/s640/Balance+Sheet.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">In terms of balance sheet, both trade receivables and payables also dropped. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Good thing is the group able to reduce its loan amount to almost same as one year before. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">From the cash flow statement, it can be seen that the group generated a very healthy operating cash flow. Since its manufacturing segment only required very low amount of capex, the group chalked up a very good free cash flow. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg708c1XQDKMmGg0R-B1Aziz0q5Up47L2STamMru-Vtz5d6Rv_kCKizsdaIR7LmEibnCkcbj15F7hS-8Kpk62n45LLcFaxoCFNO0xPt3WIKkB0OYOUupl5xj3oXvLh5Y2BQ5LeA9YEGX9fd/s1600/Segment.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="214" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg708c1XQDKMmGg0R-B1Aziz0q5Up47L2STamMru-Vtz5d6Rv_kCKizsdaIR7LmEibnCkcbj15F7hS-8Kpk62n45LLcFaxoCFNO0xPt3WIKkB0OYOUupl5xj3oXvLh5Y2BQ5LeA9YEGX9fd/s640/Segment.png" width="640" /></span></a></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"><br /></span></div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"></span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Here comes with the interesting part, segment reporting. </span></div>
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"><br /></span></div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">For its manufacturing segment, I would love to see the segment able to maintain above 20% operating profit margin. That would be a very good improvement from 15% (FY2014) and 19% (FY2015). Management pointed out that it was due to lower operating expenses incurred. But I guess for manufacturing industry, normally the management able to reduce the operating expenses to certain extend only and maintain from there. </span></div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">
</span><br />
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">For its engineering segment, management pointed out that the gross profit margin
is higher due to higher weightage on revenue from certain projects with relatively higher profit margin and the Group’s Kuala Lipis Hospital Project
has just started. However, the contribution of the hospital project is quite low. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I believe the higher profit margin of the engineering segment is not sustainable due to the nature of the revenue recognition of contract based projects just like what happened in Q4FY14. It's still highly depends on the Ampang line LRT extension project. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Dato Tan pointed out that there was delay in Ampang Line LRT extension project. However, Prasarana CEO stated days later that there was no delay and the phase 1 is on track and will begin operation in Oct 31 2015. So, who should we trust?</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Besides, Dato Tan also mentioned the group target to add another RM2 or RM3 billion worth of contracts this year on top of RM1 billion orderbook on hands. I think we should ignore this kind of blow water issue. I still remember he said the same thing during last year AGM on top of gonna diversify into oil & gas segment. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Well, I think he did not expect the sudden drop in crude oil price at the end of last year which indirectly affected the numbers of construction jobs awarded. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The biggest surprise to me about George Kent is ColdEye bought the counter recently as shown in the latest annual report. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">He must have a very good reason to buy. Should I follow? :)</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<br />Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-64082481205939835792015-07-06T15:00:00.001+08:002015-07-06T15:00:41.408+08:00OpenSys: Its potential competitors<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I believe there are numbers of players out there to compete with OpenSys for its cash recycler machines. But I failed to search any concrete info online regarding who is his direct competitors and their respective market share. </span><br />
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Below is some of the details I managed to gather so far. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim4trg5JOUV2yFYh7VNy7OPLEyZZr2C8H8XwKJuchJ3ETFIfES_i3mo0XT_SoafvjY-7rmnI35s9DSBcxNXIfuewNi4p-ulwjxepGVv5z2Ir96h_f-JIEpCOBGaB5vvhVBjmoy67fkbkeM/s1600/CINEO_C4040_image.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim4trg5JOUV2yFYh7VNy7OPLEyZZr2C8H8XwKJuchJ3ETFIfES_i3mo0XT_SoafvjY-7rmnI35s9DSBcxNXIfuewNi4p-ulwjxepGVv5z2Ir96h_f-JIEpCOBGaB5vvhVBjmoy67fkbkeM/s320/CINEO_C4040_image.gif" width="155" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Wincor-nixdorf is one of the world's leading providers of IT solution and services to banking industry and produce his own cash recycler machine, namely CINEO C4040 series. </span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group has its Asia Pacific regional headquarters located in Singapore as well as one office in Mount Kiara, KL. </span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Its website does not provide much info regarding sales in Malaysia and Singapore. So, no idea on its market share in the CRM industry here.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhbsF5opM6RuEUvzw5N39B76VWhN_deFTOqi7ywY-lKsvUj5-2K0GQdwUd_k55OgkdQmqthyMf_5vS6Cd50t0w_yN0rPdPOzRsSK6SjZAVIKQTHaeBXm0flFl8rdiiRXDt80kIzGQDbxXE/s1600/CLSystems+SR7500.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhbsF5opM6RuEUvzw5N39B76VWhN_deFTOqi7ywY-lKsvUj5-2K0GQdwUd_k55OgkdQmqthyMf_5vS6Cd50t0w_yN0rPdPOzRsSK6SjZAVIKQTHaeBXm0flFl8rdiiRXDt80kIzGQDbxXE/s400/CLSystems+SR7500.png" width="247" /></span></a></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The second player I managed to search is from CLSystems SR7500 CRM model. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">CL Systems is under CL International Holding Group who has been providing IT services to banking industry for decades. The group has major operations in Malaysia, Singapore, China and HK. </span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Based on the info in its website, the group formed a partnership with Hitachi-Omron Terminal Solutions Corporation who is the largest manufacturer of ATMs in Japan and had installed more than 3,000 terminals in Malaysia and Singapore.</span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Besides the group is the first company to install a self-service cash recycler machine in Malaysia in 2011. (OpenSys just started to conduct testing trial with local bank in 2013/2014)</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfiQskgq48qdIAmjN6JHlSP9RXrN9o4uo0EhVbo67uEHeDdqwIMOkb6v8TOxjLcufCu8NVHGyuVM3ipdshqsAm_EDKbFV3yhy-9B2CKkHiRXT0GAanwAjmQFpEbHy51X22BHR9nx0KyyY4/s1600/AR.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="143" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfiQskgq48qdIAmjN6JHlSP9RXrN9o4uo0EhVbo67uEHeDdqwIMOkb6v8TOxjLcufCu8NVHGyuVM3ipdshqsAm_EDKbFV3yhy-9B2CKkHiRXT0GAanwAjmQFpEbHy51X22BHR9nx0KyyY4/s400/AR.png" width="400" /></span></a></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Based on the OpenSys AR2014, it mentioned that Malaysia has around 15k units of ATMs. </span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, if CL Systems has around 3k units in Malaysia, it has around 20% market share and as</span><span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"> far as I see, the ATM machines in Malaysia are quite dominated by Wincor and NCR. </span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">OpenSys does not state its numbers of units, but I guess they have lesser than that. Else, they will state it like how they brag about their 80% market share in the cheque deposit machines. </span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">But the penetration rate of CRMs is still quite low at around 4%. There is still much more growth for the industry. It just depends how well OpenSys able to increase its market share in the CRM market. </span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="line-height: 20px; text-align: center;"><i>(Copy from Internet)</i> Tetsuhei Kawamura,GM of OKI (OpenSys's partner), once said that the biggest challenge for banks to adopt the CRMs is </span><span style="line-height: 20px;">they have to update their software, which is time consuming and brings about a learning curve to learn the new features of the software. </span></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="line-height: 20px;"><br /></span></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="line-height: 20px;">Secondly, banks demand a 99.8% success rate when it comes to counterfeit recognition as the checking is done by the machine itself when the money is deposited to the machine before being withdrew by the another user. </span></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="line-height: 20px;">Finally, banks worry about the devices’ life and don’t want to spend on new machines after few years of service and it also has to be able to withstand the wear and tear caused by constant use.</span></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="line-height: 20px;">And I do hope OpenSys continue to market its outsourcing model as the segment has higher margin and also in recurring term</span></span></div>
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Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com5tag:blogger.com,1999:blog-5279265592166717246.post-26595441983269943902015-07-02T15:00:00.000+08:002015-07-02T15:01:20.068+08:00June 2015 Portfolio<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3Pcx0dODkiSU4R-vgPMIVW87vP-8KrU2RMGBkvH0y8wl0LAe8GjHFxgxRx9OkgiYeAptmhsMrkvOgjZTFN2C-rq9w2bphaoTZ890dySRpnEmPljL-7f9qMF66311weztynBJ7ZkKCZFhj/s1600/June+15.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3Pcx0dODkiSU4R-vgPMIVW87vP-8KrU2RMGBkvH0y8wl0LAe8GjHFxgxRx9OkgiYeAptmhsMrkvOgjZTFN2C-rq9w2bphaoTZ890dySRpnEmPljL-7f9qMF66311weztynBJ7ZkKCZFhj/s640/June+15.png" width="568" /></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Hmm half year of 2015 was gone. I almost forget what targets I set at the beginning of the year. Have to review back then only I realized that some objectives are still far off from the targets. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, how about yours? </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">No selling shares for me in June, purchased 2 stocks in KLSE, namely Puncak and Opensys. Unfortunately, I bought the shares right before the sell down. Thus, my buying price was quite high. Shit :(</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">For Puncak, I was buying for short term. Hopefully the agreement can be settled by July and the share price up a bit. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">For Opensys, I purchased it due to its improved performance. Have to keep on monitor its quarter reports moving forward to keep track on its CRM sales as well as its recurring income. Have to sell it off if the growth was not up to the standard. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">For PJDev, ChinWell and Sunway, there were still quite stable. SunCon already credited into my account but I probably will sell it off since the quantity is not that much </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">For SGX, nothing much changes for the 3 stocks. All have to wait for quarter report release in coming August. Not much news regarding the sale of Mahkota Hospital anymore for HMI. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">For HKEX, </span><span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">I already cut half of my holding in China Silver, so probably will just sit back and let's see how far can it go to. Will probably do the same on China Saite, but feel like it's not the right time yet. </span><br />
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">I still looking for companies to invest especially in HKEX. But still can't find any company ngam sam sui. </span><span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">Have to keep on screening the companies. </span><br />
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">Any stocks recommend to me? :)</span><br />
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<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"><br /></span>Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com1tag:blogger.com,1999:blog-5279265592166717246.post-54568578221147408282015-06-29T15:00:00.000+08:002015-06-29T15:00:10.898+08:00PJDev: Email Enquiry to IR (29/6)<span class="im" style="background-color: white; color: #500050;"><i><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Just received the reply from PJDev's IR team regarding my enquiries to them earlier. </span></i></span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span class="im" style="background-color: white; color: #500050;"><br /><br />First of all, thanks for the great effort for making PJDev group a great company.<br /><br />I am one of the retail investors who are investing in PJDev group and I have some enquiries related to the group and would like to seek clarification from your side as below,<br /><br />1) How much is the property development unbill sales at the last quarter as the group didn't mention in the latest quarter report?</span></span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span class="im" style="background-color: white; color: #500050;"><br /></span><span style="background-color: white; color: #222222;">Answer: In the ranges of 600Million as at March 2015</span><br style="background-color: white; color: #222222;" /><span class="im" style="background-color: white; color: #500050;"><br />2) The hotel segment recorded operating losses in the last quarter. What is the reason behind? Is it one time off or the group facing challenge moving forward?</span></span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span class="im" style="background-color: white; color: #500050;"><br /></span><span style="background-color: white; color: #222222;">Answer: Mainly due to slow down of tourism industry. We foresee that the Hotel Industry will continue be quite soft for the 2nd half of this year.</span><br style="background-color: white; color: #222222;" /><span class="im" style="background-color: white; color: #500050;"><br />3) Based on the annual report, D'Majestic and Swiss-Inn are expected to open in 2Q2015. May I know what is the progress?</span><span style="background-color: white; color: #222222;">Answer: Both will be opened in July of August 2015.</span><span class="im" style="background-color: white; color: #500050;"><br /><br />4) The group's tax rate in the latest quarter was slightly higher due to losses in certain subsidiaries that are not available to set off against taxable profit as mentioned in the report. Is the higher tax rate one time off or will it continue moving forward?</span><span style="background-color: white; color: #222222;">Answer: Yes, you are right. It will still has some impact for remaining of the year.</span><br style="background-color: white; color: #222222;" /><span class="im" style="background-color: white; color: #500050;"><br />5) There was big jump in Property development costs and Land held for Development in the latest quarter. Was it due to land acquisition by Yarra Park City?</span></span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span class="im" style="background-color: white; color: #500050;"><br /></span><span style="background-color: white; color: #222222;">Answer: Yes this is due to Yarra Land , and Reclassification a piece of land that under Land held for development to Property Development.</span><br style="background-color: white; color: #222222;" /><span class="im" style="background-color: white; color: #500050;"><br />6) What is the project plan for Yarra Park City since the group had subscribed additional shares in the said group for almost RM215 million this year?</span></span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span class="im" style="background-color: white; color: #500050;"><br /></span><span style="background-color: white; color: #222222;">Answer: This will be a mixed development project that consists of residential, and Mall, and hotel.</span></span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="background-color: white; color: #222222;"><br /></span></span>Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-43261585955861655042015-06-25T15:00:00.001+08:002015-06-25T15:00:05.848+08:00ABRIC: So, what now?<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I sold off ABRIC a couple of weeks ago at the price around RM0.52. Since then, the share price once shot up to 63 cents for a while and retraced back. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Based on the latest quarter report, below are some of the key details. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Cash balances: RM80 mil</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Net cash: RM80 mil - RM6 mil = RM74 mil</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">No. of ordinary shares: 137.3 mil (Include warrants)</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Thus, Net Cash per share will be around RM0.54</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Total Equity: RM89.2 mil</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Thus, Net Assets per share will be around RM0.65</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The margin of safety to invest in the group is quite low now consider the share price is quite close to its net cash and net assets per share currently. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group still has some investment properties worth around RM15.8 mil on paper that able to generate some revenue and profit. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Management mentioned they are currently evaluating various options to address its PN16 status. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group still has 6 months more to submit its regularisation plan. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">In case it fails, I am really interested to know how much it can give back to the shareholders. By right, it should be around 65 cents, but there should be some costs involved. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">It will be a good learning experience to me. </span><br />
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Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-18818884893478907022015-06-22T15:00:00.000+08:002015-06-22T15:00:10.371+08:00OpenSys: Is its growth sustainable?<div class="separator" style="clear: both; text-align: left;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Recently get to know OpenSys after it reported a tremendously growth in its net profit in its latest quarter. So, just want to take a look and conduct a simple study. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZjXQ9VQI9y1DZSc38jX539V4e4xKswwLIPcSzSdFFKf-osfsYRqyL7c6aGqrwC94nP2x04PmrDXgRckfSU8-Ar4jmHRO-S9p31JZENXWYORwBxtyvAgqmXqYuWxmW9tYPn9KnkfH3uG8Z/s1600/OpenSys+Logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="167" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZjXQ9VQI9y1DZSc38jX539V4e4xKswwLIPcSzSdFFKf-osfsYRqyL7c6aGqrwC94nP2x04PmrDXgRckfSU8-Ar4jmHRO-S9p31JZENXWYORwBxtyvAgqmXqYuWxmW9tYPn9KnkfH3uG8Z/s400/OpenSys+Logo.png" width="400" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Basically, we always find OpenSys's products around us especially in banks as well as some insurance, telecommunication and utilities company.</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">All this while, the group pioneered in design and development in non-cash dispensing self -service kiosks called Efficient Service Machines (ESM). The machines able to help the customers to enhance their customer service, reduce operation cost and also provide marketing information.</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Besides, the group also provides business process outsourcing (BPO) for bill payment kiosks. OpenSys manages their whole infrastructure by providing hardware and software and maintenance support and services. In return, the group charges a fee for each payment transaction, resulting in steady recurring income.</span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVkGBnfwgl7ROgcL4Rg9chN1qkD1hEhqXSYNyKFJf9lD2sJqtmwGuEUBQHkSbhoA6mslaZcE-J3_iYMVLMtH7fXdkwFH2vpD77G730O1o8zWk5X2cyeJjbdQjfOeKFE6EvJvX6wwFVip3S/s1600/crm.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVkGBnfwgl7ROgcL4Rg9chN1qkD1hEhqXSYNyKFJf9lD2sJqtmwGuEUBQHkSbhoA6mslaZcE-J3_iYMVLMtH7fXdkwFH2vpD77G730O1o8zWk5X2cyeJjbdQjfOeKFE6EvJvX6wwFVip3S/s320/crm.jpg" width="300" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The main reason of the jump in profit in Q1FY15 was due to higher amount of sales of Cash Recycling Machine (CRM). </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br />As stated in AR2014, several banks started to commission customer trials of CRMs with OpenSys/OKI in 2015 after the successful CRM implementation from 2 major banks in Malaysia in 2014. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">It also mentioned that the penetration rate of CRM currently stands at 4% of the installed base. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So hopefully, there is still much more growth ahead of the group and also the CRM industry. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzrQ7VCG-RI69Hjxt4pZuYKUI_1JOVopFZfJB71CQV-P5esB_-el31DzRLyUfQNzZghhrUodM8BzssNv8lQ7lEaVUtO4Bgtq1nH58xPWqr40IDOEyKmG6H-OFM8zdENXZnoV54lAoQq8W6/s1600/segment.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="262" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzrQ7VCG-RI69Hjxt4pZuYKUI_1JOVopFZfJB71CQV-P5esB_-el31DzRLyUfQNzZghhrUodM8BzssNv8lQ7lEaVUtO4Bgtq1nH58xPWqr40IDOEyKmG6H-OFM8zdENXZnoV54lAoQq8W6/s640/segment.png" width="640" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">But the problem is .. the gross profit margin of CRM sales is quite low compared to its Software Solution and Services (SSS) which provide licencing software and rental of ESM machines (SSS) segment. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">It's understandable as the group only purchase, manufacture and distribute the CRM machines. Profit margin will not be that high and the group is not the only one providing this kind of machines in Malaysia. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Competition is there</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I guess the margin for CRM is even lower than the standard ESM machines as the banks will trade-in their old ATM for new CRM.</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, the SSS segment is still the key. </span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzPVR5DxIdAwam2lrEa28XjOqA-2R5GCP7XXPz0MNSTPX0DCQ7PY7MAU_Qerl5uFOPqojHCkaPavUORXBU4kgOEXwk4sHX-e7OS9dVtHNwdps9MN6TBN6dpsDpbeuiqgxFPtAmNF6aGbUv/s1600/cheque+deposit.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzPVR5DxIdAwam2lrEa28XjOqA-2R5GCP7XXPz0MNSTPX0DCQ7PY7MAU_Qerl5uFOPqojHCkaPavUORXBU4kgOEXwk4sHX-e7OS9dVtHNwdps9MN6TBN6dpsDpbeuiqgxFPtAmNF6aGbUv/s320/cheque+deposit.jpg" width="240" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">According to the AR2014, OpenSys is a market leader for cheque deposit machines, commanding around 85% of the market. However, it's noted that banks started to charging a cheque processing fee of 50 cents since Jan 2015.</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Management think the effect is not so significant as the cheque is mostly used by companies instead of individuals and it's hardly replaceable due to multiple signatures, post-dated cheques, large transaction limit and has intrinsic audit trail.</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Even if the usage will declines, the management think that the banks will outsource the processing of cheques to third parties as it would be more cost efficient to them rather than hire a team to manage the low usage machine.</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">OpenSys is in strong position to benefit form the outsourcing and probably will get more and more recurring income.</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">This is the area which I am more interested as it has higher profit margin and recurring term.</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Trade receivables increased tremendously last quarter, need to keep monitor. May due to CRM commissioning.</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Net debt to equity ratio is around 0.2. I think should be okay given their historical record of operating cash flow and their low interest payment to operating margin ratio. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Concern is how well OpenSys able to increase its CRM market share. CLSystem is another big player. And the ability to get more outsourcing. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Let's see ..</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-55798698909183909842015-06-18T15:00:00.000+08:002015-06-18T15:00:10.683+08:00SCGM: Q4FY15 Job well done<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Was away for a short break in Tioman Island last weekend and need some time to catch up a bit of my work this week. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br />
SCGM berhad just released its latest quarter report today. All I can say is the result is as good as expected. </span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjTazfWKs0zCbbrdwWN1Dcatmacr1Wa4et0Jy58sv4oS-eR-yaruTQRXafSadBshphY2IhVnko-QXPJIaV2SNfsok3Hiy6yDquCodfjpUwSSBUwIdcq3K4OWjyQAgeoalSikbSvasZSkE-G/s1600/SCGM-Bhd-logo-360x99.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="110" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjTazfWKs0zCbbrdwWN1Dcatmacr1Wa4et0Jy58sv4oS-eR-yaruTQRXafSadBshphY2IhVnko-QXPJIaV2SNfsok3Hiy6yDquCodfjpUwSSBUwIdcq3K4OWjyQAgeoalSikbSvasZSkE-G/s400/SCGM-Bhd-logo-360x99.jpg" width="400" /></span></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br />
With the lower raw material cost and favorable currency exchange rate, all elements are doing good for SCGM. It's no surprise that the group able to chalk up 24% and 19.9% operating profit margin and net profit margin respectively which were highest for the past 2 years. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br />
For full year FY2015, the group's revenue increased 6% but net profit increased tremendously by 36.23%. This demonstrates the margin playing an important role to its earning power. Investors really need to take note when the petrol price increases as well as RM is strengthen in future.</span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKTaKNsHuf1V-y-DhEylB0-nySFjDQXL8gWj8-4cQUrUobfkr-CMOQHExlAx0uwUKZUJr9e1BFL0YFOik7UR1o45nsIwgZ2rZdU2QtMAoA1x9Jn04WSU6CbVmNZ0Y7t7vNzhUyAwDGxWDd/s1600/revenue.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="246" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKTaKNsHuf1V-y-DhEylB0-nySFjDQXL8gWj8-4cQUrUobfkr-CMOQHExlAx0uwUKZUJr9e1BFL0YFOik7UR1o45nsIwgZ2rZdU2QtMAoA1x9Jn04WSU6CbVmNZ0Y7t7vNzhUyAwDGxWDd/s640/revenue.png" width="640" /></span></a></div>
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In terms of balance sheet, nothing special to mention other than the drop in cash balance. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br />
Coupled with the cash flow statement, I think the drop in cash on hands is not a big concern as the group spent a big amount of capex on the new product, plastic cups production. The group's free cash flow all this while was pretty good. So, I am confident the group able to generate cash easily. The fact that the group announced to pay dividends quarterly last quarter shows how well and confidence the group in managing his cash flow internally. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br />
ROE and ROIC increased to around 21%. and 21.8% respectively. It's brilliant to me.</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br />
The group currently valued at a PE of 17. High? Low? Gonna use PEG? </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br />
I guess the price will move in tandem with its result moving forward. But don't expect a big jump in its share price, I guess it will move up slowly until its growth story ended one day.</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group also announced its first interim dividend for FY2016. So fast! </span><br />
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</span>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif; margin-left: 1em; margin-right: 1em;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8yL85UB8eALl2jfXtznT_-ls59gvELrw5_775-usA4fUEH5xONKQ_X__29-Nwqy3MF-LoDXmupjpsEy3AQwrHf5vqlVVTqL7ASfgZk0lyzG1exv_NPrCidCLy6bJhaPG4CoFt4PiKAUpF/s1600/sensitivity+analysis.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="235" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8yL85UB8eALl2jfXtznT_-ls59gvELrw5_775-usA4fUEH5xONKQ_X__29-Nwqy3MF-LoDXmupjpsEy3AQwrHf5vqlVVTqL7ASfgZk0lyzG1exv_NPrCidCLy6bJhaPG4CoFt4PiKAUpF/s400/sensitivity+analysis.png" width="400" /></a></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Given that the group's export sales contributed around 46% to the group's overall revenue and the group purchased raw material locally, the current scenario is good to the group.</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Based on the currency sensitivity analysis showed in annual report 2014, the continuing weakening of RM against USD and SGD will favour the group's bottom line moving forward. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br />
Furthermore, the new plastic cup production had commenced operation in May. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br />
But my concern is after the GST implementation, seems like the consumer sector is being hit quite hard. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br />
Will it affect the plastic containers the group is producing?</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span>Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-26667474030539613992015-06-09T15:00:00.000+08:002015-06-09T15:00:01.942+08:00Wai Kee Holding: Asset valuation<div class="separator" style="clear: both; text-align: left;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Wai Kee Holdings is listed in HKEX with a stock code of 610. The group has some subsidiaries and associates who are also listed in the respective stock exchange. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group owns 39.82% of Road King Infrastructure. Road King Infrastructure invested in a toll road portfolio of approximately HKD4.2 bil, comprising 12 major toll road projects in seven provinces in PRC. For the few years, Road King kept dispose Class I/II highway projects and focuses on expressway projects which able to give higher returns.</span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Road King also involved in property development with land reserve of about 4.5 million sqm across 9 provinces in PRC at 2014. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group also owns 51.17% equity interest in Build King Holdings which offer civil engineering, buildings and environmental to both private and public sectors in Hong Kong. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">And lastly, the group also owns 94.05% equity interest in its construction materials segment which manufacture and sell concrete and quarrying products. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIUnc9fjvmGO8mhc2-uUOt5ZbY2fElVZFI85yDjGXeLAlVtrbd9cvygggu3S23oOohX-1AiVRmzHqCbyb1nVgfiSAsyNtXvNNYBQ70aZNi5WZtI5EZBz8kyfhMLXQewjy52fDKLZVDXmzW/s1600/Wai+Kee+Holding.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIUnc9fjvmGO8mhc2-uUOt5ZbY2fElVZFI85yDjGXeLAlVtrbd9cvygggu3S23oOohX-1AiVRmzHqCbyb1nVgfiSAsyNtXvNNYBQ70aZNi5WZtI5EZBz8kyfhMLXQewjy52fDKLZVDXmzW/s640/Wai+Kee+Holding.png" width="640" /></span></a></div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group's businesses are quite related to each other. From Construction Materials to Construction and to Property Development. Toll road provides steady cash flow to the group. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">As at today, </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Market capitalization for Road King Infrastructure: HKD5.549 billion. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Wai Kee Holding's ownership worth: 39.82% x HKD5.549 billion = HKD2.209 billion</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Market capitalization for Build King Holdings: HKD0.577 billion</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Wai Kee Holding's ownership worth: 51.17% x HKD0.577 billion = HKD0.295 billion</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Market capitalization for Wai Kee Holdings: HKD2.3 billion</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Wai Kee Holdings's ownership in both Road King Infrastructure and Build King Holdings combined is more than its current own market capitalization. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Sounds interesting .. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So it almost means that you will get the Construction Materials segment for free if you buy Wai Kee Holdings now. </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">But bear in mind that the bulk of it was contributed by Road King Infrastructure.In FY2014, share of profit from associates (Road King) contributed around 75% of Wai Kee's net profit. So, the group's performance is highly depends on Road King Infrastructure</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Below is some of the details regarding Wai Kee Holdings currently, </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">PE Ratio: 4.2</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">P/B Ratio: 0.4</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">DY: 5.69%</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Net cash position</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, perhaps it worth a look further? </span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-65954999215047903302015-06-05T15:00:00.000+08:002015-06-05T15:00:04.845+08:00HMI: Q3FY15 Update<div style="text-align: justify;">
<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">All this while, HMI group announced its result in semi-annual basic. Little did I know that when its market capitalization exceed SGD75 million, the group need to report its result in quarter basic in accordance to SGX rules. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, I was little bit late to read its latest 3rd quarter report. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_7_Hmm_FbTY6aRHB1F2bN09wOg9W48z71Cg1bFFHJ2DbYWHiiEK2lVg_-_8nGtrLzK7T_iPect9t3eJH5T9F0AFIfYRjTyanRNTIeSD7lX9PUB1x54uZpuGKgH-Xqjj8QKmQBgqUwJKFK/s1600/Income+statement.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><img border="0" height="366" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_7_Hmm_FbTY6aRHB1F2bN09wOg9W48z71Cg1bFFHJ2DbYWHiiEK2lVg_-_8nGtrLzK7T_iPect9t3eJH5T9F0AFIfYRjTyanRNTIeSD7lX9PUB1x54uZpuGKgH-Xqjj8QKmQBgqUwJKFK/s640/Income+statement.png" width="640" /></span></a></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">HMI group posted a better quarter result at the top line as well as at PBT level. Gross margin and PBT margin also improved.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Profit attributed to the shareholders jumped much more, probably due to higher contribution from its Regency Specialist Hospital which the group's ownership is higher compared to Mahkota Medical Centre.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Tax expense was lower due to due to the reversal of deferred tax liabilities upon the completion of the exercise to restore the Group’s ownership of certain hospital assets previously transferred to associated companies.</span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group's net profit attributed to the shareholders was only RM16 million for FY14 but the group already able to chalk up an impressive RM19 million with one more quarter to spare. FY15 will be another good growth year for the group. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif; margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjsDT_1j28Wr4DA1x51eKKIvkap263XBTjngAd_VnL2et9K1Zs9R73M0k24Iu3-srSHV415ddKQ2tVWnCspRCNx9AzGx7CplT5RfO3HKtN5v0sGo4iKwA9hs6y5sowye4a5pF4yodwZDM8Z/s640/balance+sheet.png" width="508" /></span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group managed to pare down its borrowings by around RM15.7 million. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">To make it better, the group done it with increased cash on hands. The group net borrowing of RM29.4 million as at June 2014 was improved to net borrowing of RM4.2 million. Foresee the group's finance cost will be lower moving forward. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The reduce in loan was due to its strong operating cash flow as well as its asset restructuring which resulted in higher trade payables. The group used the spare cash to pare down its loan and purchase new PPE as seen at the cash flow statement. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">From the statement, the directors are cautiously optimistic that the group will
continue to perform well for the rest of the year even though the group pointed out that new hospitals are coming in to compete at the two states the group's hospitals are operating at. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Elsewhere in the statement, the group also mentioned they has
received non-binding expressions of interest for MMCSB and has not made any definitive decision with respect
to the potential sale of MMCSB. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">However, there was an article in the news media stated that the group intend to invest about RM200 million to build a new 500-bed hospital block on a parcel of land adjacent to existing Mahkota Medical Centre Melaka. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">So, no concrete decision.</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">And its IR officer stated clearly that they would not answer any questions through emails or phone call.</span><span style="font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;"> Just attend their AGM. </span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="text-align: justify;">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So, just continue to hold and see what will happen later. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><br /></span></div>
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Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-71180290162829286662015-06-03T15:00:00.000+08:002015-06-03T15:15:58.001+08:00May 2015 Portfolio<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Have a nice break back to hometown and celebrate Mother's and Father's day together last weekend. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Not so willing to come back to work .. like always :(</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">May was another selling month for me. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">I sold off IFCA at around RM1.4x as the selling pressure really scared me off. But I think it will go up and reach its all time high again. Just I have not much time to monitor the counters during working hours nowadays, so I decided to sell it and use the proceed to buy some stable counters. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Nothing much changed for PJDev, Chin Well and Ho Bee Land. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Sunway and CES had a sell-down in May but I think they will pick up themselves back in future. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">For HMI, I'm still waiting for the right time to dispose it if the news of Mahkota Hospital disposal really come true. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">China Silver and China Saite had a great run in May. But at the time of writing, they dropped back a bit. I took the opportunity to dispose half of my holdings in China Silver at around HKD4.80 and took back my capital plus some profit. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Bought in Welling Holding few days ago. Basically, I followed others for this stock. Still in the progress to read the past annual reports of the group. :)</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Cash level is around 25%. Looking to buy 2 counters each in KLSE and HKEX.</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">So have to be more hardworking and read more reports. </span><br />
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Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-23844594748414893752015-05-26T15:00:00.000+08:002015-05-26T15:00:07.341+08:00Chin Well: Email enquiry to IR (25/5)<div class="MsoNormal" style="margin: 0cm 0cm 0.0001pt;">
<span style="font-family: Calibri, sans-serif;"><span style="font-size: 14.6666669845581px;">Just sent an email to Chin Well group's IR regarding some of the issues related to the group as below. </span></span><br />
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<b><span style="font-family: Calibri, sans-serif; font-size: 11pt;">1) There was an article from Bloomberg mentioned that EU had renew another five years tariffs on screws and bolts from China last month which will expire in Mar 2020. Are you able to confirm regarding this anti-dumping duty extension?</span></b><span style="font-family: Calibri, sans-serif;"><u></u><u></u></span></div>
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<span style="font-family: Calibri, sans-serif; font-size: 11pt;">- Yes, the extension took effect on 28-March 2015 for a 5-year period.</span><span style="font-family: Calibri, sans-serif;"><u></u><u></u></span></div>
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<b><span style="font-family: Calibri, sans-serif; font-size: 11pt;">2) If the anti dumping duty being extend, how well can Chin Well benefit from this? Does the management foresee better sales or normal as previously?</span></b><span style="font-family: Calibri, sans-serif;"><u></u><u></u></span></div>
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<span style="font-family: Calibri, sans-serif; font-size: 11pt;">- Chin Well is one of the 9 Malaysian companies whose exports to EU are exempted from any duty. We do expect higher sales from EU as happened in 2009 when the earlier anti-dumping duty was imposed.</span><span style="font-family: Calibri, sans-serif;"><u></u><u></u></span></div>
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<span style="font-family: Calibri, sans-serif; font-size: 11pt;">- However you must understand that currently, EU is seeing a mixed bag of fortunes in economy, where some countries are doing better than others. With this duty being extended, we hope that sales will pickup when the economies rebound.</span><span style="font-family: Calibri, sans-serif;"><u></u><u></u></span></div>
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<b><span style="font-family: Calibri, sans-serif; font-size: 11pt;">3) With the recent quantitative easing being implement in Europe and the strengthening of RM against EUR, is that any drop in orders from Europe countries?</span></b><span style="font-family: Calibri, sans-serif;"><u></u><u></u></span></div>
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<span style="font-family: Calibri, sans-serif; font-size: 11pt;">- EU demand is as above where some countries are faring better than others.</span><span style="font-family: Calibri, sans-serif;"><u></u><u></u></span></div>
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<span style="font-family: Calibri, sans-serif; font-size: 11pt;">- We always give customers the option of whether to pay in USD or EUR. For EUR sales, we tell the customer that we add a certain percentage of currency hedge risk on top of sales. Our sales is 50-50 between USD and EUR.</span><span style="font-family: Calibri, sans-serif;"><u></u><u></u></span></div>
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<b><span style="font-family: Calibri, sans-serif; font-size: 11pt;">4) With the recent drop in steel rod price, how long does Chin Well need to benefit from the lower raw material cost?</span></b><span style="font-family: Calibri, sans-serif;"><u></u><u></u></span></div>
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<span style="font-family: Calibri, sans-serif; font-size: 11pt;">- Typically raw materials make up about 60-70% of our production cost. Our inventory turnover period is about 6 months.</span><span style="font-family: Calibri, sans-serif;"><u></u><u></u></span></div>
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<b><span style="font-family: Calibri, sans-serif; font-size: 11pt;">5) Based on the sensitivity analysis for foreign currency risk described in AR2014, the group will face decreased PBT as a result of strengthening of RM against EUR and weakening of RM against USD. Is my interpretation correct? In this case, both currency movement is acting unfavourable to the group.</span></b><span style="font-family: Calibri, sans-serif;"><u></u><u></u></span></div>
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<span style="font-family: Calibri, sans-serif; font-size: 11pt;">- As mentioned above, we impose a “forex risk fee” for EUR to safeguard our interest. Some of our imports are in USD so there is natural hedge.</span><span style="font-family: Calibri, sans-serif;"><u></u><u></u></span></div>
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<b><span style="font-family: Calibri, sans-serif; font-size: 11pt;">6) There is an article mentioned that Chin Well group benefit from the GST implementation. Could you explain more on this?</span></b><span style="font-family: Calibri, sans-serif;"><u></u><u></u></span></div>
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<span style="font-family: Calibri, sans-serif; font-size: 11pt;">- For one thing, the 6% GST is lower than the previous 10% sales service tax (SST), so prices of goods would be lower. Also, all players have to impose GST, whereas some players did not include SST. That’s why we welcome GST, because it levels the playing field in the whole industry!</span><br />
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Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0tag:blogger.com,1999:blog-5279265592166717246.post-58024701516911132892015-05-22T15:00:00.000+08:002015-05-22T15:00:01.248+08:00Real Nutriceutical Group (瑞年国际): Stable & Growing<div class="separator" style="clear: both; text-align: left;">
Continue from previous <a href="http://ctyap.blogspot.sg/2015/05/real-nutriceutical-group-amino-acid.html" target="_blank">post</a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmM3gJvJL5AHZxbGrXtSm2h2ChYsPYfgKjHPl97AEM42u8WQVNJ2bU6bGuxAsv3QYqnqxDLCGl34hDVsk7q9oBqzro7va_B4dTJX7f9UtSZmklmMoF_Ezsi2s5dGP7M2aJ4SUA0_M7upu2/s1600/Balance+sheet.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="379" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmM3gJvJL5AHZxbGrXtSm2h2ChYsPYfgKjHPl97AEM42u8WQVNJ2bU6bGuxAsv3QYqnqxDLCGl34hDVsk7q9oBqzro7va_B4dTJX7f9UtSZmklmMoF_Ezsi2s5dGP7M2aJ4SUA0_M7upu2/s640/Balance+sheet.png" width="640" /></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">The group was in net cash position all this while although its borrowings was in upward trend. Borrowings surged up in 2014 due to acquisition of 60% equity stake in Magic Galaxy. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Current ratio and acid test were more than one. Depreciation / PPE ratio was less than 10%. Trade receivables / Revenue ratio is quite high at 45%, but its cash conversion cycle is manageable around 60 days. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">PPE contributed around 40% of its total assets which is quite a norm for a manufacturer in my opinion. Invested capital is contributed by 80% shareholders' equity and the rest from borrowings which is quite healthy to me. </span></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">ROE and ROIC were dropping throughout the years as the growth rate in capital was faster than the growth in operating performance. ROE and ROIC were around 14% and 18% respectively. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEje5JIaNbi59xvrzsD8e550wxlfTh8j5k4nAIOczlGTgX377ACIwGRJYJ4FobCOoHoc5urNJz_YAWYq_-Fi1DP4DkTxZBh6f7pPws9nMKXLZcwxVABovQL3xBObvyHlFTIMKItDK41UEmA-/s1600/cash+flow.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="379" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEje5JIaNbi59xvrzsD8e550wxlfTh8j5k4nAIOczlGTgX377ACIwGRJYJ4FobCOoHoc5urNJz_YAWYq_-Fi1DP4DkTxZBh6f7pPws9nMKXLZcwxVABovQL3xBObvyHlFTIMKItDK41UEmA-/s640/cash+flow.png" width="640" /></a></div>
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Operating cash flow was quite good, net cash from operating / net profit ratio was more than one. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">But somehow the group spent a lot in capex since 2011 to expand its production capacity as well as technical know-how for the past few years. Capex / Sales ratio was around 28% and the amount of capex spent was around its net profit recorded which is quite high</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Thus, it's not surprise its free cash flow was negative from 2011 to 2013. The group able to chalk up a positive FCF in 2014 and even recorded a 5% FCF / Sales ratio. Things remained to be seen whether the group able to continue to record a good positive FCF moving forward. Else, the group need to look for external funds to fund its capex or worst case, they are cooking the book which is a nightmare for the investors. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Mr Wang FuCai is the Founder, Chairman as well as the CEO of the company. He is responsible almost everything related to the group. He has 30 years of experience in the health care and pharmaceutical industry. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">He currently having around 22.9% ownership of the group. </span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhSlz4c6FFCd57zjUqgZKTLjmFS2haIWHYhrnqrv2SiQKeB7Cdk1lzaOaWTUZK-FpmrTGgduPVGcgdMbs4TaMSrEObLuWlibc_j_s1JkZwS-xd0MiL1OcyqccoW2xHSWSwCUVdd1vrIuxBE/s1600/stores.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="264" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhSlz4c6FFCd57zjUqgZKTLjmFS2haIWHYhrnqrv2SiQKeB7Cdk1lzaOaWTUZK-FpmrTGgduPVGcgdMbs4TaMSrEObLuWlibc_j_s1JkZwS-xd0MiL1OcyqccoW2xHSWSwCUVdd1vrIuxBE/s320/stores.png" width="320" /></a></div>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Some of the recent corporate movements of the group</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">1) In May 2013, the group issued a convertible bond worth HK200 million with 6% annual interest and conversion price of HKD3.0 which is higher than current price. Thus, probably nobody will convert it. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">2) The group acquired 60% Magic Galaxy for RMB200 million whose core business is manufacturing of high end eye drop products in PRC. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">3) The group entered into MoU in Jan 2015 to acquire Ailire Investment who operates over 600 integrated drug retail chain stores which have strong business presence and retail network for medicine sales in China. The group target to get RMB100 million from each retail shops to get HKD600 million increased in sales. This probably will be the main growth aspect from the group in 2015. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">4) The group plans to spin off its beverage business through a separating listing on the stock exchange. The group's beverage business only able to record around RMB450 million sales in FY2014. Thus, I think the proceed raised will not be that high. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">5) In April 2015, the group issued a private placement of about 130 million new shares to third parties at HK2.36 per share to raise HK303 million. Perhaps HKD2.36 a good support? </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">In terms of valuation, PE ratio is around 4.4, dividend yield is quite low due to low payout. Enterprise value multiple is quite low at 2.4, thanks to its high operating profit. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Perhaps, is a good company to invest in? Have to take note of its capex amount and cash flow. </span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">Reference</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">- Annual Report</span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">- Company website</span>Anonymoushttp://www.blogger.com/profile/14664901700301877804noreply@blogger.com0