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Friday, October 31, 2014

收入1395亿超越苹果 中国工行全球最赚钱

Source: http://www.nanyang.com/node/658811?tid=462





(纽约29日讯)通过大量销售尖端高盈利电子产品,苹果现已成为世界上第二大最赚钱公司,而唯一比该公司还赚钱的,正是中国工商银行。

美国金融数据机构FactSea近期提供各公司最近一个财年的净收入数据,世界上20家最能赚钱的公司排名出炉。

其中,全球最赚钱的公司是中国工商银行(ICBC)。

依靠政府政策

该公司去年来自持续经营项目的收益超过了427亿美元(约1395亿令吉)。

但ICBC的收益主要依靠政府政策;尤其在2010年,该行向市场推出了一个叫“2010中国信用卡/诚致金开1号”的信托产品,而实际上该产品并未得到银行担保。

但由于政府的大力施压,ICBC不得不最后自掏腰包借钱给资产管理人,帮助该信用卡持有人摆脱信用危机。

十强中国占4

FactSe数据显示,全球10大最赚钱的公司中,中国占四家,而且都是国有公司。

数据也指出,在全球最赚钱的20家公司中,有9家是美国的公司,包括两家银行:富国银行和摩根大通、两家能源公司:埃克森美孚和雪佛龙、两大科技公司:苹果和微软;柏克夏也榜上有名。

苹果收入增速惊人

排名第二,是净收入增长速度最为惊人的苹果公司。

2004年,苹果的收益仅为2.76亿美元(约9亿令吉),去年已跃升至370亿美元(约1208亿令吉)。

苹果近期的收入大涨,主要归功于iPhone系列大卖;该公司上季度卖掉了3520万部iPhone手机,现有季度的374亿美元(约1221亿令吉)的总收益中,198亿美元(约647亿令吉)都来源于此。

Mistry’s top picks are Wilmar, Sime Darby as palm oil surges

Source: http://www.theedgemarkets.com/my/article/mistry%E2%80%99s-top-picks-are-wilmar-sime-darby-palm-oil-surges

KUALA LUMPUR: Wilmar International Ltd ( Financial Dashboard) and Sime Darby Bhd ( Financial Dashboard) were chosen by Dorab Mistry as his top picks among palm oil companies as the director at Godrej International Ltd forecasts prices will rally into next year.

Sime Darby’s recent offer to take over New Britain Palm Oil Ltd (NBPOL) will give the Malaysian group greater access to the European market, while asset-rich Wilmar is probably the best company to buy over in the long term, Mistry told reporters.

Futures may rally to as much as RM2,500 a tonne by March as falling output in the biggest producers reduces inventories, Mistry told a conference in Kuala Lumpur on Wednesday.

The world’s most-used edible oil rebounded from a five-year low in September after Malaysia waived export taxes and production was seen declining in Southeast Asia. Mistry, who’s traded edible oils for more than three decades, said in September that it was a good time to buy palm oil companies, without identifying individual stocks, and reiterated that call at the conference. He listed Wilmar and Sime Darby as top picks in comments to reporters after his address.

“It’s a fantastic company,” Mistry said, referring to Singapore-based Wilmar International. “If you’re looking at something over the long term, it’s probably the best palm oil company to buy. But they need to do a few things for their shareholders, like increase the dividend.”

Sime Darby, the world’s largest listed palm oil producer by market value, on Oct 9 offered £1.07 billion (RM5.6 billion) for London-listed NBPOL to buy plantations in Papua New Guinea. The offer was made at an 85% premium to the target company’s stock price.

“It’s a very bold move, people thought they would not pay such a high price but still I think they will make it work,” Mistry said. “I do feel that Sime Darby has done a very good job by buying New Britain Palm Oil. It’s an excellent company and it gives Sime now a much bigger canvas to play in Europe. And they become the largest company for sustainable palm.”

“We see value emerging,” said Ben Santoso, an analyst at DBS Vickers Securities (Singapore) Pte Ltd.

“I’d prefer those that have collapsed in terms of price in recent months, so those are the ones that I have been recommending,” he said, citing Bumitama Agri Ltd ( Financial Dashboard), First Resources Ltd ( Financial Dashboard), Indofood Agri Resources Ltd ( Financial Dashboard) and PT Astra Agro Lestari Tbk as recently upgraded.

“I am happy to repeat that the present is a good time to buy plantation and processing company equities,” Mistry told the conference. “In fact, with my forecast of improved prices for 2015, the timing could not be better.”

This article first appeared in The Edge Financial Daily, on October 31, 2014.

周顯 - 消息股漏風聲 價值大減

Source:


消息股漏風聲 價值大減 2014年10月31日

【明報專訊】在星期二,有某位線人來電,說瀋陽公用(0747)有好勁的消息在背後,擺明好像是益我咁話。那時,我正在黃明記吃方魚肉碎粥加廿蚊方魚,對,這是我的至愛之一,沒有空看股票,於是便致電給拍擋梅偉琛,希望他可以代為研究。 梅偉琛在翻查了15分鐘資料之後,回覆是﹕「它在之前配股失敗,股價大瀉,但後來竟然可以倒拗,回升上幾成,這證明它的確有好勁的料在後面,才會這樣子的升法。不過,在現價位,值博率不會好高。」


消息早泄 失值博率

後來我回家看看圖表資料,完全同意他的看法,這股票如此炒法,恐怕風聲早已泄漏,如果一隻消息股已經泄漏了風聲,那麼這隻消息股的價值已經失去了大半,就算上升動力仍在,至少已經失去了大部分的值博率了。

大家一定好奇,究竟是什麼消息咁勁呢?我可以給予提示﹕「實在沒法打開她的芳心,令我每天傷心,為甚尚未打開她的芳心,未似Ali咁幸運……」

如果大家問,我有沒有買這股票,我的答案是﹕「我都把內幕消息講了出來,如果我買了,那是內幕交易,要坐牢的。所以,我既然寫了出來,當然是沒有買啦,這還用說?」

至於我沒買的原因,也很簡單﹕不是說這消息是堅還是流,只是值博率不夠而已!

[周顯 投資二三事]

Unisem posts net profit of RM27.12 mil in Q3

Source: http://www.theedgemarkets.com/my/article/unisem-posts-net-profit-rm2712-mil-q3

KUALA LUMPUR (Oct 30): Unisem (M) Bhd ( Financial Dashboard) posted a net profit of RM27.12 million or 4.02 sen per share for the third quarter ended Sept 30, 2014 (3QFY14), against a net loss of RM648,000 or 0.1 sen per share.

The semiconductor manufacturer attributed the improved earnings to high sales volume, lower overhead cost and better capacity utilization.

Quarterly revenue grew 11% to RM273.27 million, from RM246.78 million.

Unisem declared a tax-exempt interim dividend of 4% or 2 sen per share.

The company has been profitable for three financial quarters in a row, after it had slipped into the red for financial years. The company posted a net loss of RM32.31 million in the financial year ended Dec 31, 2012, and its losses widened to RM105.37 million FY13.

For the cumulative nine months to Sept 30, 2014 (9MFY14), Unisem registered a net profit of RM47.23 million or seven sen per share, from a net loss of RM14.59 million or 2.16 sen per share. Revenue increased marginally to RM752.9 million, from RM743.43 million previously.

On segmental basis, Unisem said its cumulative revenue in Asia segment improved 2.7%, while income from its operations in US declined by 9.5%.

“The improvement in net profits was primarily attributable to increased gross profit margin arising from change in product mix, lower overhead costs in PT Unisem after the restructuring exercise, grant income received by a foreign subsidiary and lower interest expense,” it said in a filing to Bursa Malaysia this evening.

On its prospect, Unisem expects its performance to remain “satisfactory” in 4QFY14.

Unisem share price has been trending upward since January, reaching a year’s high of RM1.90 on Aug 18. The stock has surged 68% or 68 sen year-to-date, and it closed at RM1.68 today, giving it a market capitalization of RM1.13 billion.

Tek Seng proposes bonus issues of 120 mil free warrants

Source: http://www.theedgemarkets.com/my/article/tek-seng-proposes-bonus-issues-120-mil-free-warrants

KUALA LUMPUR (Oct 30): Penang-based PVC products manufacturer, Tek Seng Holdings Bhd has proposed a bonus issue of up to 120 million free warrants on the basis of one free warrant for every two existing Tek Seng shares.

In a filing with Bursa Malaysia today, the company said the exercise price of the warrants will be pegged at 25 sen per warrant, being the par value of Tek Seng shares.

Tek Seng had featured as a Stock with Momentum on The Edge Markets on Oct 21, 2014.

According to Tek Seng, this represents a discount of 40 sen or 61.54% to the theoretical ex-all price of Tek Seng shares of 65 sen, calculated based on the five-day weighted average market price of Tek Seng shares up to and including Oct 24, 2014 of 85 sen per Tek Seng share.

“The proposed bonus issue of warrants is not expected to raise any funds as the warrants will be issued at no cost to the entitled shareholders,” said Tek Seng.

If the warrants were fully exercised, the company would raise proceeds of approximately RM300 million based on the indicative exercise price of 25 sen per warrant.

"The proceeds to be utilised for working capital will be used to finance the group's day to day operations. These expenses include, amongst others, payments for purchases of raw materials, utility bills and staff costs,” it said in a the filing with Bursa Malaysia.

As such, the company is also seeking to increase its authorized share capital from RM100 million comprising 400 million Tek Seng shares to RM500 million comprising two billion Tek Seng shares.


The company’s share price has shot up in 2014. Year-to-date, Tek Seng’s share price has grown by 186.2%. It reached a high of 88.5 sen on Sep 22. Today, the counter closed at 83 sen, giving it a market capitalisation of RM199.2 million.

Thursday, October 30, 2014

(Icon8888) Engtex Group - Potential Beneficiary of Water Industry Restructuring

Source: http://klse.i3investor.com/blogs/icon8888/62914.jsp

I have recently added Engtex to my portfoilio. The restructuring of Selangor's water industry is still dragging on. However, I think it will be resolved soon and the State Government will kick start the pipe replacement programme of closed to RM10 billion. Non revenue water is too high and the state is facing potential water shortage. We simply cannot afford to wait any longer.


1. Principal Business Activities

The Engtex group is principally involved in the following business activities :-

(a) distribution and wholesale of pipe, valve, fittings, building & construction materials and steel products. Specialised in water supply, sewerage system, telecommunication, construction and infrastructure industries.

(b) manufacturing of ductile pipes, valves, fittings, wire mesh, etc.

(c) property development - the group has amassed quite a good size of land bank. But contribution from this division is still small

(d) hospitality industry - the group recently ventured into ownership of hotels. Contribution not significant at this stage.

(Engtex share price)

(Engtex-Wa price)


2. Relevent Financial Information

Based on 198 mil shares outstanding and share price of RM1.94, market cap is approximately RM386 mil.

The group has net assets of RM399 mil, cash of RM61 mil and borrowings of RM438 mil. This translates into net gearing of closed to 1 time. At first look, gearing is relatively high. However, the bulk of it is trade related facilities (RM284 mil are bills payable), which is common for manufacturing companies that needs to purchase raw materials for processing. 

Based on FYE 31 December 2013 net profit of RM51 mil (EPS of 26 sen), PE multiple is at undemanding 7.6 times. Price to book ratio is approximately 0.97 times.


3. Historical Profitability

One of the reasons Engtex attracted my attention was its ability to deliver earnings consistently over the years, even during severe economic downturn in 2008. In my opinion, the Group must have positioned itself very well and have certain competitive advantages that insulate it from adversities. 

        6 months
(RM mil)FY2007FY2008FY2009FY2010FY2011FY2012FY2013June 2014
         
Revenue5667526006807949201090591
         
Net profit18.430.422.834.234.829.251.825.4


4. Selangor Water Industry Restructuring

As we all know, the water restructuring saga has been dragging on for a long time. However, one week ago, the new Menteri Besar said that he is willing to endorse the restructuring scheme :

The Star, 23 Octopber 2014, Selangor Mentri Besar Azmin Ali wants to see an efficient and quality water supply in the state and has no intention of revoking the agreement between the federal and state governments.
“I am not going to revoke it. I want the exercise to be completed as soon as possible so the people can have enough water in the future,” he said.

I echo his sentiment that the State should conclude the deal as soon as possible. This issue has been allowed to drag on for too long and is starting to negatively affect the livelihood of ordinary people, manufacturing, property development and many other industries.  

The State needs to complete the acquisition of the assets of the various concessionaires and move on to the next stage - reducing non revenue water through replacement of old pipes and other old facilities. When that happens, companies that supply pipes and other components will benefit.

Engtex's Managing Director spoke to the press recently about the billion dollar opportunities associated with the restructuring of the industry :-

(The Sun, 3 March 2014) 
Water pipe manufacturer Engtex Group Bhd, seen as one of the major benefactors of a resolution in the water industry woes in Selangor, has allocated RM70 million as capital expenditure (capex) to expand its business operations in financial year ending Dec 31, 2014 (FY14), gearing up to go for mega infrastructure projects, said its founder and group managing director Datuk Ng Hook.
Ng said this will allow Engtex to better position itself to capture other mega infrastructure projects, be it Refinery and Petrochemical Integrated Development (RAPID) in Pengerang, Johor, Kuantan Port City, Rubber Research Institute of Malaysia (RRIM) and Mass Rapid Transit (MRT).
"We will (work) along with the turnkey contractors of these projects. However, with or without the mega infrastructure works, Engtex will continue to grow because business will operate as usual," he told SunBiz in an interview.
Currently, the factory utilisation rate of its ductile iron pipe plant in Gebeng Industrial Estate, Pahang stands at about 33% while its mild steel pipe plant at Serendah, Selangor reach about 60%.
The federal and state government signed a memorandum of understanding to facilitate the restructuring of the state's water industry and allow for the construction of Langat 2 water treatment plant last Thursday.
A one-stop centre to provide total supply-chain solution for water supply and sewerage system, Ng said, Engtex is poised to get a slice of pie in the Langat 2 water treatment plant project, as well as the long-overdue replacement of the aging water pipelines throughout the country.
"There is an urgency to solve this problem. I am optimistic that both the federal government and state government will be very kind to resolve it by this year," he said.
According to the Asian Green City Index, water system leakages in major Asian cities whereby Kuala Lumpur recorded 37% of leakage, far above the average of 22.2%.
Ng said treated water is lost through non-revenue water, from broken and leaking aged asbestos cement pipes, which should be replaced by ductile iron pipes and mild steel pipes.
Malaysia has 44,000 km of old asbestos cement pipes that require replacement, which would potentially fetch a value of about RM10 billion.
"Assuming that half of the asbestos cement pipes needs to be replaced by the mild steel pipes and ductile iron pipes, we are looking at RM5 billion market," said Ng.
The remaining RM5 billion, he said, may be allocated to other pipes such as high-density polyethylene (HDPE) pipe, polyvinyl chloride(PVC) pipe, UPVC (unplasticized PVC) pipe and clay pipe, which Engtex does not produce itself, but still can be involved in through its wholesale and distribution division


5. Bonus Issue

On 26 September 2014, Engtex announced a bonus issue. Shareholders will get one bonus share for every two shares held. The bonus issue is targeted to be completed by fourth quarter of 2014.

For illustration purpose, a shareholder who hold two shares at RM1.95 today will end up with three shares at RM1.30 post bonus issue.


6. Warrants

Engtex-Wa has exercise price of RM1.25 and expires in October 2017 (exactly three years from now).

Existing conversion premium is approximately 7.6%. Very reasonable for an instrument that still has three years to go.

Based on today's price of RM0.85, Engtex-Wa will trade at RM0.57 post bonus issue. Exercise price will be adjusted downwards to RM0.83 (does not contravene Company's Act as par value is RM0.50).

Warrant holders will be entitled to 1 warrant for every 2 warrants held.


7. Concluding Remarks

(a) I believe that the State government will very soon conclude the deal to restructure the State's water industry. The issue has been allowed to drag on for too long and is beginning to adversely affect economic development and people's livelihood. It is advisable to resolve the issue and move on.

(b) I chose Engtex for exposure to water industry because it is trading at low PE multiple of only 7.6 times despite consistent profit track record and good industry prospects. I think the company is well run. Even without the water industry restructuring, it deserves to trade at at least 10 times PE multiple. Based on historical EPS of 27 sen, fair value is easily RM2.70. With additional profit from pipe replacement, etc going forward, it is not inconceivable that it could one day touch RM3.00 or RM3.50. 

(c) Instead of mother share, I prefer Engtex-Wa. If Engtex indeed goes to RM2.70, Engtex-Wa should trade at at least RM1.45. An upside of 70%. The Warrants still has three more years to go and has low conversion premium. So it is quite safe.

(d) I believe the positive effect of the bonus issue has not been fully priced in. Engtex should attract more interest when the bonus issue is implemented in November 2014.

Have a nice day.

(Icon8888) Asian Pac (Part 2) - See Imago Mall With Your Own Eyes

Source: http://klse.i3investor.com/blogs/icon8888/49645.jsp

The following is an article extracted from iproperty.com.my

It was brought to my attention by one of the forum member. So I thought it is a good idea to share it here.

The info is a bit old (and has already been mentioned in my earlier article). My apology

Posted Date: December 17, 2013 12:00:00 AM

Imago Mall Signs on Key International Brand Names



(Imago Mall)



(KK Time Square)

Residents and tourists in Kota Kinabalu, Sabah will soon be spoilt for choice with well-known international and local labels added to IMAGO Mall, a lifestyle luxury mall in East Malaysia. Scheduled for completion in the fourth quarter of 2014, this world-class shopping destination offers international fashion labels such as Burtons, Kate Spade, Michael Kors, Swarovski, Topman/Topshop, Tumi and Victoria’s Secret with some making their very first appearances in the neighbourhood.

The mall has over 300 retail outlets across a net leasable area of approximately 800,000 square feet. Developed by Syarikat Kapasi Sdn Bhd, a wholly owned subsidiary of Asian Pac Holdings Bhd (“Asian Pac” or “Company”), IMAGO Mall is expected to change the Kota Kinabalu city skyline with its recently signed prestigious fashion and lifestyle companies, namely Aeon Fantasy, Bonia Group, DNP Clothing, MBO, Padini Group, Parkson, Swarovski and Valiram Group.

On a mission to create a more wholesome shopping experience, the Group Managing Director of Asian Pac, Dato’ Mustapha bin Buang revealed to the press that it is an honour to have both international and local fashion brands signing on and putting their trust in the company.

“We are indeed excited with the signing on of our new partners as it marks a major milestone in realising our vision for KK Times Square. When we first conceptualised IMAGO Mall, we focused on creating an urban hub to add vibrancy and enhance the value of the surrounding areas. Our goal was simple – maximise opportunities for shoppers to enjoy an exciting yet therapeutic retail experience, right here in Kota Kinabalu. This is now becoming a reality,” said Dato’ Mustapha.

With this mission in mind, visitors to the mall will now be able to find several other popular fashion, F&B and lifestyle brands including CYC Mega Leisure, DC Super Comics, Etude, Kitschen, SenQ, Starbucks, Sticky and more, all under one roof within their neighbourhood.

“IMAGO Mall is truly the crowning jewel of KK Times Square. Located at one of the most sought-after pieces of prime retail real estate, it will be the first non-strata fully leased shopping mall in Kota Kinabalu and also professionally managed. This in turn allows us to have complete control over the tenancy mix, facilities and amenities of the mall. It is essentially part of our strategy to diversify into more recurring income as it will provide us with better earnings growth. With expected rental yields of five per cent per year, IMAGO Mall is expected to contribute 25% of overall revenue by year 2016. We believe that we are close to achieving our targets as more than 65 per cent of IMAGO Mall has been leased out,” explained Mr. Raymond Yu, Group Chief Executive Officer of Asian Pac.

To further complement the existing areas surrounding the development, IMAGO Mall will also have its very own dining boulevard, ranging from restaurants and cafés to alfresco street walk areas, giving its customers unobstructed views of the South China Sea and the Sutera Harbour Golf Course. Going the extra mile to ensure connectivity and accessibility, Asian Pac has also built a bridge that links the mall directly to the city centre.

The development of IMAGO Mall fits into Sabah’s overall economic outlook as it continues to remain on track, especially in the last two years. In the retail sector, among the features that are most sought after include easily accessible locations, design, layout, mall management and even tenant retention. Cognisant on this, Asian Pac’s KK Times Square development has been designed to fulfil this criterion, thus giving Kota Kinabalu its very own lifestyle hotspot while delivering a brand new world-class experience to Sabahans and tourists.

With the proliferation of local and foreign companies opening in the state, Sabah’s real estate has also experienced heighten activity, growing 10 to 13 per cent every year with more Malaysians and foreigners moving there. As such, Asian Pac believes that their integrated development at KK Times Square will experience further growth, especially with the introduction of the latest phase of The Loft and IMAGO Mall.

(source : www.iproperty.com.my)

(Icon8888) Asian Pac (Part 1) - Imago Mall Could Potentially Bring PE Multiple Down to 3 Times

Source: http://klse.i3investor.com/blogs/icon8888/49095.jsp

After I published the article about how the new Atria Mall would enhance OSK Property's earnings, I was suggested to take a look at Asian Pac Holdings Bhd ("Asian Pac") which has a similar concept in play.
Based on publicly available information and leads provided by fellow forum members, I came up with a big picture for Asian Pac.
The gist of the story is that Asian Pac is closed to completing its new mall (Imago Mall) in Kota Kinabalu, Sabah.  They target to open by end 2014.  Based on preliminary analysis, Imago Mall could potentially generate net income of > RM30 mil per annum.  
Based on Asian Pac annualised net profit of RM28 mil (9 months reported earnings of RM20 mil), the new mall could potentially propel its earnings to RM61 mil. 
Based on existing market cap, this translates into PER of 3 times only.

(1) Background info on Asian Pac
Asian Pac is a small cap property developer.  Based on 975m shares and market price of RM0.20 per share, its market cap is RM195 mil.
Based on net assets of RM361 mil, cash of RM50 mil and loans of RM284 mil, net gearing is 0.65 times.  
At first look, the gearing seemed to be a bit high. However, a significant portion of it is mall related project debts and is in the process of being pared down.  Please refer to item 3 below for further analysis.
For the 9 months ended December 2013, Asian Pac reported RM20 mil earnings. If annualised, net profit would be RM28 mil. The current market cap translates into PER of 7 times.

(2)  Imago Mall
Imago Mall is part of Asian Pac's project in Kota Kinabalu (Time Square 2).  Construction cost is approximately RM600 mil. 
The mall has net lettable area of 800,000 sq ft, out of which 700,000 sq ft is mall space and about 100,000 sq ft external retail shops.
As at December 2013, Imago Mall has secured 65% tenancy and is in negotiation to secure another 20% (altogether 85%). They target to secure 100% tenancy by the time the mall open in Q4 2014.

In 2013,the major shareholder and senior management of Asian Pac has told the press the following :-
(1) Imago Mall once fully tenanted, could generate rental income of RM70 mil per annum; and
(2) The rental yield of Imago Mall is 5%

In addition, according to rating report, Imago Mall will generate net rental of RM50 mil per annum.

Based on the abovementioned information, I have constructed a financial model for Imago Mall project to cross check the various figures. To my pleasant surprise, the figures fit in seamlessly (please refer to table below).

(Imago Mall P&L model)    (RM mil)Comments
Rental income           70as per management guidance  *
less : epxenses          (20)assumption of 70% margin ^
net rental income           50as per rating report
less : interest expenses           (5)assumption : RM80 mil x 6% #
PBT           45 
less tax         (12)25% tax
Net profit           33 
   
divided by : project cost         600as per management guidance
yield           5%as per management guidance

*  translates into yearly rental rate of RM88 per sq ft.  Sunway Pyramid and IGB average yearly rental rate is RM150+ per sq ft
^  based on Sunway Pyramid and Mid Valley average profit margin 
#  estimated project debt by 2015

Caution :  Please note that the above financial model is arrived at based on various estimates and assumptions by the author for the purpose of illustrating a hypothetical scenario. It might not be reflective of the actual earnings potential. Please do not base your investment decision solely on this piece of information

(3)  Gearing analysis
As at December 2013, Asian Pac has RM284 mil loans outstanding, out of which RM150 mil are project debts related to Imago Mall ("Project Debt").
RM70 mil of the Project Debt is due by June 2014, which is likely to be repaid by internal cash (they have RM50 mil cash as at December 2013).
Another RM80 mil of the Project Debt is due by June 2015, which is likely to be repaid through a combination of mall net rental income and / or refinancing. 
Upon full repayment of Project Debt, loans outstanding will drop to RM134 mil (on pro forma basis), representing gearing of 0.37 times only, which is considered low as it is backed by recurrent income from the mall. 

(4) Land Bank and Development Projects
As the main objective of this article is to highlight the potential impact of Imago Mall on Asian Pac's earnings, I would not go into full details on Asian Pac's land banks and various development projects, so as not to overwhelm everybody with too much details.

Nevertheless some of the relevant info is as follows :-
(a) as at December 2013, unbilled sale is RM508 million with projects in KK, Johor and KL. The unbilled sale could potentially last the group 18 months.  Another RM150 mil sale to be launched in Q1 2014.
(b) brief information on Asian Pac's land bank :

LocationDescriptionArea (acres)Net book value (RM mil)year acquired
KK, Sabahland under development (KK Time Square 2)15.54181997
JB, Johorland under development11.7692006
Serembanvacant land399.8542006
Gombak, Selangorvacant land50.026.62002
KK, Sabahcar park114k sq ft20.12008
Sungai Buloh, Selangorvacant land6.518.02013
Mukim Batu, KLvacant land6.212.61988
Mukim Batu, KLland under development611.81988
Mukim Batu, KLland under development38.91988
KK, Sabahcar park52k sq ft6.82010
TOTAL 499646 


(5) Concluding Remarks
Asian Pac is on the verge of a major transformation.  Completion of Imago Mall by end 2014 will create significant value for the group.   Net profit could potentially double to RM61 mil, translate into low PER of approxiately 3 times based on current market price.
Gearing is relatively high at this juncture but is being gradually pared down.  
Recurrent income from the mall provides strong visibility to future cash flow, which augurs well for servicing debt obligations and funding the group's growth and expansion going forward.
As usual, no harm keeping it in your watchlist. 
Have a nice day.

Rubber glove makers poised for re-rating, says Kenanga IB Research

Source: http://www.theedgemarkets.com/my/article/rubber-glove-makers-poised-re-rating-says-kenanga-ib-research

KUALA LUMPUR (Oct 30): Kenanga IB Research has maintained its Overweight rating on the rubber glove sector and said the companies under its coverage were poised for a re-rating after three quarters in the lull.

In a note Thursday, the research house said that Gas Malaysia Bhd ( Financial Dashboard) in an announcement to Bursa Malaysia informed that the Government has approved the natural gas tariff revision for non-power sector in Peninsular Malaysia with effect from 1 November 2014 by an average of a mere 2.3%.

It said that ceteris paribus, assuming “no-cost pass through”, an average 2.3% increase in natural gas tariff was expected to hit rubber gloves players’ earnings by less than 1%.

However, Kenanga IB said it was not overly concerned since rubber gloves players generally were able to pass on the cost increase judging from past experience in previous electricity and natural gas tariff hikes back in end-2013 and lately in May 2014, respectively.

“Hence, we are maintaining our Overweight rating for the rubber gloves sector.

“After three quarters in the lull, we believe rubber glove players under our coverage are poised for re-rating,” it said.

Kenanga IB Research said the positive outlook was driven by commercial production of new capacity expected to come on-stream by 4QCY14, which will drive earnings growth.

It said the persistent concerns over falling demand, fears of oversupply and price wars were overplayed.

“Our Top Pick is Supermax. We like Supermax for: (i) re-rating catalyst upon commercial production of its new plant expected by end Dec (one line has started production) which dispelled market skepticism of persistent delays in the new plant, (ii) steep 40% discount to the sector average, and (iii) being a beneficiary of the strengthening USD against RM.



“We also have Outperform calls for Kossan (TP: RM5.23) and Hartalega (TP: RM7.48),” it said.

Latitude up after Edge Research says valuation attractive

Source: http://www.theedgemarkets.com/my/article/latitude-after-edge-research-says-valuation-attractive

KUALA LUMPUR (Oct 30): Investors bought Latitude Tree Holdings Bhd shares after Edge Research said the stock traded at attractive valuations amid consistent profitability.

Latitude Tree climbed as much as one sen to RM3.70 before traded flat at RM3.69 with 60,000 shares at 10.58am.

According to Edge Research's report, which is published in The Edge Financial Daily today, industry volatility has not deterred Latitute Tree from being consistently profitable since listing in 2001.

Edge Research said Latitute Tree was attractively valued at a price-earnings ratio of 6.41 times. This compares with an industry average of some 24 times, Bloomberg data showed.

Edge Research said : "Latitude appears to have built a cost advantage with its operations in Vietnam since 2002,and has also benefitted from appreciating real estate prices there. It is focusing on expanding its profitable Vietnam operations while scaling down its loss-making Malaysian production.

"The company has 100 acres of land in Vietnam, purchased at US$25 per sq m in 2001. Today, the land is selling at over US$100 per sq m."

Gadang has strong earnings potential

Source: http://www.theedgemarkets.com/my/article/gadang-has-strong-earnings-potential

Gadang Holdings Bhd ( Financial Dashboard)
(Oct 29, RM1.55)
Maintain “buy” with target price (TP) of RM2.57: Gadang started off its first quarter financial year 2015 (1QFY2015) by registering RM133.4 million in revenue, and a net profit of RM9.5 million. Quarter-on-quarter (q-o-q), revenue declined by 3.9%, while net profit increased by 3.2% q-o-q. On a year-on-year basis, it showed an increase in revenue and net profit of 17.5% and 23.4% respectively.

The Group’s 1QFY15 results accounted for 11.8% of our full-year estimates and 16.8% of consensus forecasts. Still, we deem the results were within expectations as historical trend indicated that recognition of construction billings in first half of financial year 2015 (1HFY15) was normally lower and work-in-progress shall start to pick up strongly in 2HFY15. Furthermore, the group has yet to book in its net gain of joint-venture (JV) development in Capital City property project in Johor with our estimation of RM25.1 million in FY2015 based on property sales of RM150 million.

On a y-o-y basis, profit before tax (PBT) in the construction division increased by 87.3% from RM5.5 million to RM10.3 million. This was on the back of a revenue increase of 21.5% thanks to a better contract value and higher progress billing from ongoing projects, coupled with improved PBT margin of 3.3 percentage points to 9.4%.

However, the group’s net earnings were partly affected by lower PBT in several divisions like property (due to higher marketing costs despite higher revenue achieved), utility (disposal of an Indonesian subsidiary and the weakening of the rupiah) and plantation (continuous harvesting activities).

Gadang’s current outstanding order book for its construction division stands at RM1.3 billion, which could provide the Group’s segmental earnings visibility for the next two to three years. We expect the group to easily achieve or even surpass our new order book win assumption of RM400 million for FY2015, as Gadang has bagged a RM350 million Refinery And Petrochemicals Integrated Development or Rapid 2 project for this financial year.

Moving forward, with the group’s experience and proven track record, we believe it is in a better position to secure more infrastructure works, that are highway projects such as the West Coast Expressway, the Sungai Besi-Hulu Kelang Elevated Expressway and the Damansara-Shah Alam Elevated Expressway as well as mass rapid transit or MRT 2 and light rail transit or LRT 3. Further affirmation by the government in its commitment to carry on with these projects in its recent budget puts Gadang in a good position for its order book replenishment.

As for earnings outlook, we made no changes to our earnings forecast as we envisage stronger result in 2HFY15.

Maintain “buy” with unchanged TP of RM2.57. We advise investors to accumulate the stock as we believe the strong earnings potential of the group has yet to be fully priced and we see the value of the stock re-emerges following recent across-the-abroad selldown on the small- and mid-cap stocks. We continue to favour the group for its well-diversified business model.— JF Apex Research, Oct 29
This article first appeared in The Edge Financial Daily, on October 30, 2014.

Price-to-earnings ratio and its use as an investment strategy kcchongnz

Source:http://klse.i3investor.com/blogs/kcchongnz/62822.jsp

PE ratio is the most widely used metric by investors as a measure of how expensive or cheap a stock is. A stock which trades at low PE ratio is often characterized as cheap and mispriced. Analysts and investment bankers use this valuation metric in their valuation reports all the time.

Price-earnings ratios vary across sectors with stocks in some sectors consistently trading at lower P/E ratio than stocks in other sectors. It is generally acknowledge that stocks that trade at low P/E ratios relative to their peer group must be mispriced.

P/E = Market price / Earnings per share (EPS)

The widely used of P/E ratio to gauge the attractiveness of a stock is often justifiable as given below:
It is an intuitively appealing statistic that relates the price paid to current earnings.
It is simple to compute for most stocks, and is widely available, making comparisons across stocks simple.
It is a proxy for a number of other characteristics of the firm including risk and growth.

Distribution of PE ratio

Figure 1 below shows the PE ratio distribution of the S&P stocks as at 31st December 2013.


As you can see above, most stocks are now trading above a PE of 16. It must be noted that those stocks which have negative earnings were excluded from the sample. Sixty five percent of the stocks are trading between PE ratios of 12 to 24. Hence a PE ratio of less than 12 may be considered as good, below 8 will be fantastic, but above 24 may be too expensive.

Investing using the low P/E ratio strategy

Tons of academic research has shown that investing in low P/E ratio stocks have yield extra-ordinary returns without the additional risks associated when compared to the broad market.

Is it really true that this simple investment strategy can provide you with extra-ordinary return on your investment in Bursa, or is it just a myth?

We will examine some evidence from the low PE stocks in Bursa to answer the following question.

“If I embark on a low PE ratio investment strategy five years ago by buying a basket of low PE stocks and hold it for five years, have I done well?”

Low PE ratio stocks in Bursa in 2009

Let us look at the low PE Bursa stocks five years ago and see if their total returns are higher than the rest. The stocks with low PE ratio from different sectors were selected from whatever information available in the Issue 20 from 5/10/2009-08/11/2009 from the booklet of Share Investment. A total of 104 stocks from various industries were found as shown in Table 1 in the Appendix. The upper limit of PE ratio is 10 and the number of stocks selected from each sector was limited to a maximum of 20 as provided by the booklet. Quite a number of them (47) have been omitted as they were already delisted form Bursa, either through privatization or bankruptcy, and a few were discarded due to unavailability of the return data from Yahoo Finance daily adjusted share prices.

The average and median PE ratio of the 104 stocks found was 5.4% and 5.1% respectively at that time, very low PE ratio indeed as we were just recovering from the US sublime housing crisis 5 years ago.

About 5 years later on 27/10/2014, the total return of all the 104 stocks above were obtained from Yahoo Finance adjusted total return daily prices. It is noted that the prices when the DY were worked out may vary a little from prices exactly 5 years ago.

Five years forward

As on 27th October 2014, the five-years of holding period has passed and what happen to the total return of a portfolio of those low PE stocks? Are the total returns higher than the broad market?

The broad KLCI index has increased from 1260 to 1819 at the close on 24/10/2014. The total return (with the assumption of 3% dividend every year) is 51%, or a compounded annual return (CAR) of the market is 10.6% as shown in Table 1 in the Appendix. The total return of the portfolio of 104 stocks is an average of 181%, or a CAR of 17.6% with a very high standard deviation of 17%. The cumulative average return of the portfolio is hence 3.5 times that of KLCI of 51% and the CAR 70% more than the market return of 10.6%.

As the return of individual stocks were highly skewed, a better measurement of the return is the median return of the portfolio of stocks which is a cumulative return of 103%, or a CAR of 15.2%. This total CAR median return is still 50% above the CAR of the market of 10.6%.

Out of the 104 stocks in the portfolio, only 9 of them are in the negative return category. So with the delisted stocks included, you would have lost money in more than 10% of the stocks. There are also 38, or one third of them under-performed the broad index CAR of 10.6%.

Among the low PE stocks, there are some big winners. The ten baggers are Takaful, Hua Yang, TDM and Yinson. There are many 3 baggers and above such as Teo Seng, Latitude Tree, Khind, Lay Hong, United UliCorp, Metro Kajang, Tasco, Fiamma, Hap Seng Con, OpenSys, Vitrox, Microlink and Globtronic. If you have bought these stocks using the low PE ratio investing strategy and hold them for 5 years from 2009, you would have done extremely well.

Among the bad losers are the red chips of Xingguan and Multi Sport (>60%), a couple of construction companies, Fajar Builder and Jetson (>50%) and my favourite stock London Biscuit (>20%). Of course there were many Ace Market stocks just disappeared from the listing. Here you can see that employing the low PE ratio may also cause you to lose huge amount of money, if you haven’t done it right.

It must be noted here that there may be a survival bias in this computation as mentioned before, a number of them were excluded.

This means you would have done very well investing in boring low PE stocks 5 years ago. The caveat is you must first avoid all red chips and companies with suspicious financial reports. One must know how to separate the chaff from the wheat, by close examination of the financial statements, especially the balance sheets and cash flow statements of those companies. Otherwise instead of making extra-ordinary return from investing in bursa, you end up losing your hard earned money speculating in lemons as shown in this link:

http://klse.i3investor.com/blogs/kcchongnz/62515.jsp

Investing using the low PE ratio also fits in well in the saying of “Head I win, tail I won’t lose much”.

How are you going to ensure that you could select the winners and avoiding the losers? This of course you must understand the language of business as investing in a stock is investing in part of a business.

You may contact me with the following email address to inquire about an online flexible course in finance and investing to build long-term wealth.

Ckc14training2@gmail.com

K C Chong (30 October 2014)


Appendix

Table 1: Summary return of low PE stocks
Sample
Alpha
% CAR
104
 size
Positive
Negative
Average
Median
Consumer
16
8
8
13.1
10.5
Construction
7
3
4
4.1
6.5
Finance
6
6
0
23.1
14.6
Hotel
1
0
1
-2.1
-2.1
Industrial Products
15
10
5
17.4
15.3
Plantation
13
6
7
15.6
10.3
Properties
13
9
4
21.0
18.6
REITs
7
4
3
13.0
13.3
Trading and Services
16
12
4
24.4
22.5
Technology
10
8
2
23.9
21.7

All Stocks
104
66
38
17.6
15.2
KLSE




10.6

Plenitude strengthens cash position

Source: http://www.thesundaily.my/news/1212378

KUALA LUMPUR: Plenitude Bhd did not raise dividend payments for its financial year ended June 30, 2014 (FY14) despite achieving higher net profit as part of a "prudent" decision to strengthen its cash position in the midst of a softening market, said its executive chairman Chua Elsie.

"This year we made more money but we gave them (shareholders) less dividend but as we were telling them, the global and regional economies are slowing down, the Goods and Services Tax (GST) is coming and oil prices are going up. You do not know what to expect next year.

"So we'd like to keep some cash in case land is cheaper than now. You never know, next year people may want to let go some land and we are trying to acquire more land," she told reporters after its AGM yesterday.

Plenitude's net dividend per share was at 6 sen for FY13 and FY14, although net profit grew 12.67% to RM87.65 million in FY14 from RM77.79 million a year ago.

Chua said it currently has 1,500 acres of land across Peninsular Malaysia, which would last the company for another 10 years. It is looking to expand its landbank in Kuala Lumpur, Selangor and especially in Penang and Johor Baru.

She said it has received many land acquisition proposals but is waiting for the opportunity to acquire more strategic land.

"That's why we need cash, for better negotiation power because most of the time when people want to let go immediately, they want cash, they don't want to wait for a loan," she added. The company currently has RM396 million cash with no borrowings.

Moving forward, the company has three launches planned in Johor Baru, Penang and Puchong, with an estimated gross development value of RM313 million in total.

"We try to maintain our financial performance but bear in mind, the market is softening. (Even though) we hope to maintain (our performance). Due to the softening, we did a lot of re-planning. We had some high-rise buildings that we planned in Johor Baru, but we scrapped that for the time being because of the trend and the demand. That's why a lot of re-planning is being done for next year," said Chua, adding that some of its launches this year were deferred to next year.

The property developer also owns two hotels, namely Four Points by Sheraton Penang and the recently acquired Gurney Resort Hotel & Residences in Georgetown, Penang.

Chua said the transaction for Gurney Resort Hotel & Residences should be finalised by January. Upon completion of the transaction process, the two hotels are expected to contribute 10% to 15% of its overall revenue.

"If another hotel comes in and the price is right, of course we will still go into that line. We also own properties for leasing. We are open to any other assets that bring in recurring income, if the proposal is at the right place and time. We are considering anything (not just hotels)," she said, adding that it wants to boost its recurring income.