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Thursday, February 20, 2020

【新冠肺炎】疫情提高卫生意识 医疗股成乱市避风港

2020年2月19日




(吉隆坡19日讯)分析员认为,新冠疫情的爆发对近期本地医疗领域的激励不大,但相信长期会提高人们卫生意识,最终仍可利及该领域,不失为“乱市”中的避风港。

艾芬黄氏投行研究日前发布报告指出,根据卫生部的防疫方针,私人医院需呈报和转介类似新冠病毒的病例给大型医院和国家感染中心,因此,估计疫情对私人医院业者的激励很小。

疫情爆发至今,私人医院业者病患人数还未见显著提升。

若看回非典爆发的2002到2003年期间,柔佛医药保健(KPJ,5878,主板保健股)当时病患人数大幅增长,但这只是因为适逢收购许多医院,在数据上医院数量从2所,增加至12所,而住院病患数量猛涨2.23倍。

因此,分析员认为该数据没有参考价值;至于IHH医疗保健集团(IHH,5225,主板保健股)在当时则还未上市。

“综合考虑后,我们相信现阶段疫情对私人医院的激励可能很小。”

短期不管制药价

另一方面,分析员得知短期不会实行药价管制,可能是因为本地药价已相当有的竞争力。

况且一旦管制后,可能会造成单一来源药品的跨国生产商无利可图,而不愿将药品带入我国市场,从而使得病患无法获得最新药品。

此外,医院可能提高其他不受管制的费用,来抵消药价管制带来的损失,所以卫生部若决定不实施管制,能扫去医院的不确定因素。

长期惠及制药业

考虑到新冠病毒传播速度,比当年的非典快一倍,分析员观察到人们卫生意识明显提高,促使预防类似症状季节性病毒疾病的产品需求走高。

“我们认为,这可潜在利好涉及相关产品的生产、批发、经销和零售的制药业者。”

然而,鉴于缺乏相关数据,即上述产品对公司的营收贡献,因此,分析员难以估量这项潜在利好。

“根据我们预测,这类产品对制药公司的贡献不显著,因此,产品需求激增对公司净利相对较小。”

不过,相信长期的卫生意识提升,仍可惠及该领域,因为人们倾向于保持健康及强大的免疫系统。



抗跌力支撑前景

对于即将出炉的业绩,分析员估计IHH医疗保健集团和柔佛医药保健,会继续录得稳健的病患人数增长。

净利方面,分析员估计IHH医疗保健集团将录得较低的核心净亏,归咎于成都鹰阁(Gleneagles)的营运初期费用,该医院在去年10月开张。

另外,该投行追踪的制药公司中,分析员预料Apex保健(AHEALTH,7090,主板消费股)和永信东南亚(YSPSAH,7178,主板保健股)的赚幅会继续恢复。

“这要归功于前者新厂已投运生产,而后者新生产线可提高效率。”

首选Apex保健

分析员仍看好医疗领域的抗跌力和长期增长前景,因此,维持该领域的“增持”评级,首选股为Apex保健。

放眼今年,分析员建议投资者留守制药领域,因为企业盈利潜在恢复,且能从政府开放本地药品经销市场的计划受益。

Kim Loong buys Sabah estates for RM92.5mil

PLANTATIONS
Thursday, 20 Feb 2020

KUALA LUMPUR: Kim Loong Resources Bhd is buying close to 2,900 acres of fully cultivated palm oil plantation in Kinabatangan, Sabah, in four separate deals worth a combined RM92.5mil.

The company said the purchase price valued the estates at about RM32,500 per acre.

“The purchase prices are fair and reasonable considering the palm age profile, well-maintained condition of plantations by the vendors, accessibility and good location nearby the group’s existing plantations,” it said in a filing with Bursa Malaysia.

Kim Loong yesterday entered into four separate deals to acquire the plantations.

The company said it has not commissioned any independent valuation of the acquisitions prior to entering into the sales and purchase agreements (SPAs).

“However, the board of directors of Kim Loong is of the view that the purchase prices are fair and reasonable and the acquisitions are in the best interest of the group,” it said.

Wednesday, February 19, 2020

Return on Capital and Stock Return kcchongnz

Author: kcchongnz | Publish date: Tue, 18 Feb 2020, 6:30 PM





In my previous articles, “Quality Investing” below, I have brought to your attention the extra-ordinary return of a random portfolio of quality stocks.

https://klse.i3investor.com/blogs/kcchongnz/2020-02-04-story-h1483049632-Quality_Investing_kcchongnz.jsp

The portfolio returned 331% over 10 years as on 17th February 2020, more than 10 folds of the return of the broad index of 31% during the same period. The compounded annual return, CAR, including dividend yield of the portfolio was a whopping 16.5%, 4 times the CAR of 5% of the broad index. RM100,000 invested in this portfolio of stocks with equal weighting multiplied to RM462,000 over the period, 3 times more than the RM163,000 of a portfolio invested in the 30 component stocks in Bursa during the same period. The stocks in the random quality portfolio were Petronas Dagangan, Nestle, Public Bank, Dutch Lady, Heineken, LPI, Aeon Credit, and Carlsberg.

I have discussed at length the qualitative attributes of high-quality companies in the link above.

In the following article, “Quantitative Metric No. 1: Return on Capital”, I suggested that the most important quantitative measure for quality is the return on capital, ROC.

https://klse.i3investor.com/blogs/kcchongnz/2020-02-09-story-h1483733832-Quality_Metric_number_1_Return_on_Capital_kcchongnz.jsp

I have also discussed in detail what ROCs are and how they are computed in the above article. I stressed that a quality company must earn a ROC higher than its cost of capital and hence should generally be a double-digit figure. That is a no-brainer.

Here, let us examine the ROCs of each individual stock in the random portfolio above which produced extra-ordinary return over the last 10 years and see if it is true that they have high ROC.

“Quality investing focuses on a company’s ability to invest capital at high rates of return: post-tax levels of high-teens (and higher) are possible.”

First, we look at the share price movement and ROC of Carlsberg Brewery Malaysia, a producer of short-live consumer products with a well-known brand name.

Figure 1: Share price and ROC of Carlsberg



Carlsberg’s share price rose from RM4.62 ten years ago to RM36.20 at the close on 17th February 2020, for a gain of 684%, or a CAR of 23%! Its ROC has always been in double-digit figure, rising from 30% to 133% in 2019 as shown in Figure 1 above. Ignoring the valuation expansion part of it, that has proven the power of high and rising ROC in stock return.

Carlsberg competitor, Heineken Malaysia, performed very well too with 329% gain over the ten years period, or a good CAR of 15.7% as shown in Figure 2 below.

Figure 2: Share price and ROC of Heineken Malaysia



We can see from the chart that Heim has consistent high ROC of more than 60%, rising to 80% in 2018. Its share price rose in tandem from RM6.90 to close ten years at RM29.58 on 17th February 2020.

Next, we have Nestle, another high-quality company with high ROC, rising from 30% in year 2011 to 134% in 2019. Its share price improved the same magnitude as Heim, rising from RM33.76 ten years ago to RM145 at the close on 17th February 2020 as shown in Figure 3 below.

Figure 3: Share price and ROC of Nestle Malaysia



For the rest of the companies in the random quality portfolio, all their share prices have also way outperformed the broad KLCI as shown in Figures 4 to 8 below and Table 1 in the Appendix.

For Financial Institutions and credit companies such as Aeon Credit, Public bank and LPI Capital, we use ROE as a measure of its return of capital as ROC is not an appropriate measure for them.

Figure 4: Share price and ROC of Aeon Credit



Aeon Credit also has high ROE above 20% all these years. Its share price has also performed well with a CAR of 13.9% over the last ten years. In the most recent year in 2019, ROE has dropped from the peak of 35% in 2013 to 20%, but still way above its cost of capital. With the drop of ROE, its share price has been stagnant for the last few years.

Figure 5: Share price and ROC of Dutch Lady



Dutch Lady has extremely high ROC of more than 100% for the last few years, propelling its share price from RM11.80 ten years ago to close at RM42.50 on 17th February 2020, for a gain of 260%.

Figure 6: Share price and ROC of LPI Capital



LPI has reasonably good ROE of 12% or more over the last 10 years. This ROE is considerably higher than the required return of equity shareholders for a stable company like LPI, and Public Bank. Its share price also has a high CAR of 12.2%, way outperformed that of the broad market.

Figure 7: Share price and ROC of Public Bank Berhad



ROE of public Bank has been deteriorating over the last few years, and hence a slow down in the rise of its share price. Nevertheless, its price has a respectable CAR of 10%. Its ROE has been more than 12%, much higher than the required return of equity shareholders.

Petronas Dagangan, although having the lowest cumulative return of among the 8 stocks in the quality portfolio of 160%, also outperformed the broad index by a wide margin. Its ROC is generally above 10% and above its cost of capital.

Figure 8: Share price and ROC of Petronas Dagangan



Conclusion

In general, businesses with high ROC have seen extra-ordinary return of their share prices over the long-term. The share price performance of the random portfolio of quality stocks with high and double-digit ROC has shown that quite conclusively. It is hence a viable strategy to invest in quality companies with high ROC.

Please note that ROC is just one of the quantitative measures of quality, abeith the most imprtant one in my opinion. There are other quantitative measures of quality which we will deliberate later.

However, it must be reminded that it doesn’t mean investing in high quality companies always result in extra-ordinary return. It depends very much also on the price one pays for them. We will deliberate this in the subsequent articles.

This article is about fundamental investing, by treating investing in stocks as akin to investing in a business. If you are interested to know more about fundamental investing, which I believe strongly is the right-path of investing, you may contact me at the following email for a eBook regarding fundamental investing.

ckc13invest@gmail.com

This eBook is free.

Happy investing.

KC Chong

CFP

Appendix

Table 1: 10-years Stock Return of a Quality Portfolio