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Friday, August 30, 2013



Daiman Development Berhad and Graham Net-Net Investment Strategy

In 1932 at the bottom of the Great Crash, Ben Graham wrote an article on Forbes about the cheapness of the market and how companies are being quoted in the market for much less than their liquidating value, as if they were all destined to be doomed. He called these types of stocks, "net nets", companies that sell for less than its net current asset value, or net net working capital. Graham used the following formula to compute the liquidation value of a company.

Net Net Working Capital = Cash and short-term investments + (0.75 * accounts receivable) + (0.5 * inventory) – total liabilities

It's the lowest form of valuation you could possibly do because it ignores everything about the business and just focuses on tangible assets. The formula states that;
cash and short term investments are worth 100% of its value
accounts receivables should be taken at 75% of its stated value because some might not be collectible
take 50% off inventories, due to discounting if close outs occur

The business

Daiman Development Berhad is in property development and investment holding. The Company operates in five business segments: property development, which is engaged in the development of residential, commercial and industrial properties; property investment, which is engaged in management and operation of buildings; non-property investment, which is engaged in overseas investment; trading, which is engaged in the sale of building materials, and leisure and recreation, which is engaged in the operation of sports, golf and recreation clubs, and bowling center.

The 5-year share price performance of Daiman

Figure 1 below shows the share price performance of Daiman from 2008 to to-date.

The share price of Daiman has been hovering between RM1.5 to RM2.00 for at least four years before it started to break out at the middle of March this year. It briefly touched the high of RM3.00 intraday and closed at RM2.60 on 28 August 2013. It reported its final year 2013 results ended 30 June 2013 a day ago.

Daiman and Graham net-net

Referring to Daiman’s latest balance sheet as at 30 June 2013, the liquidation value of Daiman is computed using the net net working capital formula above. Besides cash, the land and properties it owns are also taken as 100% of the value. This is a fair assessment as it is believed that these assets are likely to worth more than their book value than otherwise. Note that the value of its property, plant and equipment and other assets of 120m are taken as worth nothing. Table 1 below shows the detail of the assets, their weight used in the net-net assessment and per share value.

Table 1: Graham net-net valuation of Daiman

Table 1: Graham net-net valuation of Daiman
Graham net-net
BS value
Liq value
Per share
Cash and cash equivalent
Property development costs
Land held for development
Investment Properties
Trade Account Receivables
Property, plant and equipment
Other assets
Total assets
Total liabilities
Total equity
Number of shares

Net tangible asset per share


The table above shows that the net tangible asset (NTA) of Daiman is RM4.85. At this morning’s closing price of RM2.60, it is traded at a huge discount of 46% to its NTA. The net-net valuation of Daiman is shown to be RM3.76, which is still a substantial 45% higher than its price.

Isn’t Daiman a deeply undervalued stock as shown above? Wait until we check if the company is a cash burner. If a company is a cash burner, whatever assets it has can be burned away before shareholders can enjoy them.

3 Basic Checks to Perform for a Net Net

For a net net to be investable, it should have
a solid balance sheet, preferably more cash than inventories and receivables.
is not bleeding cash. At least breaking even or positive in net profit.
positive EBITDA

The first check shows that Daiman has most of its net-net assets in high quality assets in cash and cash equivalent (RM1.23 per share), investment properties (RM1.32), and Land held for property development (RM1.84). The poorer quality net-net asset of inventories and receivables amount to just 20 sen. Hence we can safely confirm that the quality of the assets is excellent. Next to check is “Is it bleeding cash”?

The latest annual financial results ended 30 June 2013 shows Daiman’s revenue and net profit increased by 12% and 78% respectively to 190m and 69m respectively, or a EPS of 32.5 sen per share. At RM2.60, the PE is only 8.0. Cash flow from operations amounts to 61.6m with free cash flow of 43.7m. This FCF is a high of 23% (>10%) of revenue. I don’t remember Daiman has even a single year of losses since listing. It has positive CFFO all the time. In fact, Daiman also easily qualified as a value stock standing on its own on financial performance.


Daiman qualifies as Graham net net investment strategy with a wide margin of safety. It can also stand on its own as a value investment stock as a going concern with stable earnings, healthy balance sheet and cash flow. For this I have added Daiman as another stock in my new portfolio.

Pantech: Equal contribution by 2015


PETALING JAYA (Aug 30, 2013): Pantech Group Holdings Bhd expects to see equal revenue contribution from its manufacturing and trading divisions by 2015, said its executive director Adrian Tan (pix).

The trading division accounted for 60.5% of the group's revenue in the last financial year ended Feb 29, 2013 (FY13), while the remaining 39.5% came from the manufacturing division.

Tan said the 50:50 contribution is achievable in view of the highly positive revenue from the manufacturing division.

Pantech is increasing its manufacturing output at three of its manufacturing plants in the UK, Selangor and Johor.

Already, for the first quarter ended May 31, 2013 (Q1FY14), the manufacturing unit's contribution surged more than half or 50.8% of the group's revenue.

Tan said the oil and gas industry will continue to be the industry which generates the bulk of the revenue of the group. With its manufacturing capabilities that now covers a more diversified range, constraints by factory production lead-time is expected to be better managed.

"When you have a manufacturing plant, it's easier to control your strategy. You can be more competitive. You know what items are on demand and you can zero in on that," Tan told a press conference after the group's AGM here yesterday.

"You're able to meet the demand of the market faster and you can also set up you own brands.

"On the other hand, when you do trading, you have to depend on the mills," he added.

Following its acquisition of UK-based Nautic Group in March last year, the Pantech's plant (through Nautic Steels (Holdings) Ltd) in Tamworth, the UK is currently running at full capacity at 600 tonnes per year and has orders to last the group for the next three months.

Pantech has also bought a factory lot near the current Nautic factory for £1.24 million and the expansion will increase the Nautic land size to 101,450 sq ft.

"We target to double our UK sales to £20 million from £10 million now within the next three years," said Tan, adding that Brazil has been identified as a growth area.

The group is also planning to expand the types of items produced at Nautic, which holds a Lloyd's Register certification to manufacture nickel alloy fittings to Norsok M650 standard.

"A lot of factories in this part of the world cannot obtain the Norsok approval hence we're able to supply at higher premiums so we get higher margins," said Tan.

Today, about 40% of the group's revenue comes from the export market, in which it supplies to 59 countries.

Pantech's plant in Klang (via Pantech Steel Industries Sdn Bhd) is also running at full capacity at 18,500 tonnes per year of carbon steel fittings and has orders to last it until December 2013.

Tan said the factory has just started to focus on higher-end products and reducing its capacity on lower-end products.
Its plant in Pasir Gudang, Johor (through Pantech Stainless & Alloy Industries Sdn Bhd), is running at 83% of its 14,400 tonnes per year capacity of stainless steel pipes and fittings. It has about two-and-a-half months of orders in hand.

Tan said the group is always open for merger and acquisition activities "if there's opportunity for us in manufacturing as well as oil and gas-related businesses".

Thursday, August 29, 2013

未完成建筑订单达42亿 双威3年净利受看好



双威获Pulau Indah Ventures私人有限公司,日前获颁2亿8300万令吉的工程,负责Urban Wellness综合发展项目。










标普: 不确定因素引波动 亚洲短期颠簸但没危机








增长 融资2风险






New Perodua plant to start ops in Q3 next year


RM790M SUNGAI CHOH FACILITY: Carmaker to manufacture latest model here

PERUSAHAAN Otomobil Kedua Sdn Bhd (Perodua) said its latest model, which will be unveiled next year, will be the first model to be manufactured at its new plant in Sungai Choh, Rawang.

The RM790 million new plant is adjacent to the carmaker's existing manufacturing facility.

The plant will be operational in the third quarter of next year and is expected to boost production by 100,000 units to 300,000 units per year.

The latest model, which is expected to be the cheapest in the market, will be using a new engine which is more fuel-efficient, compared with the three current models - Viva, MyVi and Alza.

"Cheap or not, it is related to time. We are targeting for it to reach a certain cost so that we can price it at a certain level, and make it affordable," said Perodua president and chief executive officer Datuk Aminar Rashid Salleh at the "Majlis Riang Ria 20 tahun Perodua" here yesterday.

Asked whether the new model will replace the current Viva line-up, Aminar said the company has not decided on the matter.

"Our hope and our plan is that the new model will create a new market. Whether we will continue with the existing Viva is something we will continue to discuss," he said.

Aminar Rashid said Perodua had completed its feasibility study on compact sedans.

"We will continue to produce compact cars and leverage on our strength as a compact car maker," he stressed.

Read more: New Perodua plant to start ops in Q3 next year

Rupee hurtles lower as foreign investors flee


MUMBAI: The Indian rupee slumped to a record low below 68 per dollar and shares tumbled yesterday on growing worries that foreign investors will continue to sell out of a country facing stiff economic challenges and volatile global markets.
Foreign investors sold nearly US$1bil of Indian shares in the eight sessions through Tuesday a worrisome prospect given stocks had been the country’s one sturdy source of capital inflows, although net purchases so far this year still total US$12bil.
The partially convertible rupee hit a record low of 68.75, down 3.7% on the day, after posting its biggest daily percentage fall in 18 years on Tuesday.
“It is just impossible to put any realistic value to the rupee any more,” said Uday Bhatt, a forex dealer with UCO Bank. The need to attract foreign capital is critical for a country whose record high current account deficit is a key reason behind the rupee’s slump.
Yet policymakers have consistently struggled to come up with measures that can convince markets they can stabilise the currency and attract funds into the country.
That failure is becoming an increasing source of tension for India at a time when fears of a possible US-led military strike against Syria are knocking down Asian markets, with prospect that the Federal Reserve will end its period of cheap money as early as next month further raising concerns.
In its latest initiative, the government late on Tuesday proposed setting up a task force to look into currency swap agreements, a measure analysts said could bring some relief if carried out in time by reducing market demand for dollars or other major currencies.
“Let’s see what the authorities do, but if the government can come out with some really big currency swap arrangement with some countries, that can be a strong positive,” Bhatt said.
The rupee has now fallen around 19% so far this year, by far the biggest decliner among the Asian currencies tracked by Reuters. – Reuters

Minzhong says Glaucus report misunderstands business model


China Minzhong Food Corp. said a report by short-seller Glaucus Research Group that questioned its accounts misunderstood the food processor’s business and it delayed the release of its financial results until this evening.

Minzhong, which this week lost half its market value after Glaucus published the report, is preparing a detailed response that will show its financials are sound and address specific issues raised by the short-seller, the company said. Its shares will remain suspended until the end of the trading day tomorrow.

“Most of the issues raised by Glaucus with regard to the financials of the company were nothing new and arose out of a complete lack of understanding of the company’s business model as well as the operating environment in China,” Minzhong said today in a statement to the Singapore Exchange.

Minzhong is seeking to allay concerns as more Chinese companies trading in Hong Kong, Singapore and New York become targets of short sellers. Minzhong is among 143 China-based firms listed on Singapore’s S$967.4 billion stock market, according to the latest data from the exchange.

The full-year financial report was delayed from this morning to “facilitate the verification and confirmation of certain issues referred to in the report,” Minzhong said in the statement.

Glaucus’s report said that the Putian, China-based company had been “significantly deceiving” regulators and investors, sending the stock 48% lower and wiping off $318 million in market value in less than two hours on Aug. 26 before trading was suspended.

“The main issue here is they’re unable to refute the claims in a very clear and strong manner, which investors are expecting,” said Kelly Teoh, Singapore-based market strategist at IG Markets. “That reflects the quality of management. For the time being, I don’t think it is giving investors any confidence at all in the company’s stock.”

Minzhong shares were halted at 53 cents, after tumbling the most since the company’s listing in April 2010. Short interest in the vegetable processor rose to a record 7.2% of the outstanding stock on Aug. 19 from this year’s low of 3.8% in March, according to the most recent data from research company Markit Group.

Glaucus was set up to probe companies that appear “too good to be true,” using experiences ranging from accounting, law and capital markets, according to its website. The company didn’t respond to an e-mail seeking comment.

The firm, which has an office in Newport Beach, California, has also issued reports on China Metal Recycling Holdings, China Medical Technologies Inc. and SouFun Holdings.

Provisional liquidators were appointed to China Metal in July and its Hong Kong-traded stock has been suspended since January. China Medical filed for Chapter 15 foreign-firm bankruptcy protection in New York last year. SouFun, China’s biggest real estate website owner, has surged 70% since the April report by Glaucus, compared with the 6.1% gain in the Bloomberg China-US Equity index.

Kenneth Ng, an analyst at CIMB Group Holdings Bhd., which rated Minzhong outperform, said in a report this week it’s ceasing coverage of the company.

“We share Glaucus Research’s concerns about Minzhong’s reliance on capital markets for cash generation and ballooning receivable days,” said Ng, who co-wrote the report with Mou Hua Lee.

Minzhong’s biggest investor PT Indofood Sukses Makmur, the parent of Indonesia’s biggest instant-noodle maker, said earlier this week it’s comfortable with its investment.

Indofood, which doubled its stake in Minzhong to 29.3% in March, conducted due diligence on the company before it made its investment, Director Thomas Tjhie said Aug. 26, adding that he has spoken to Minzhong’s chief financial officer about the Glaucus report. Indofood lost 8% in the past three years and closed yesterday at an eight-month low.

Minzhong reiterated its comment on Aug. 26 that it’s seeking legal advice to defend its reputation.

The company said its accounts were prepared according to Singapore’s financial standards and audited by Crowe Horwath First Trust LLP, which hasn’t raised issues with its accounts.

Wednesday, August 28, 2013

Mah Sing Q2 net profit up 16.2%


PETALING JAYA (Aug 28, 2013): Property developer Mah Sing Group Bhd reported a 16.2% increase in net profit to RM69.83 million for the second quarter ended June 30, 2013 (Q2) from RM60.07 million a year ago, on improved profit margin due to product mix and higher profit recognition on properties delivered to customers.

Revenue for Q2 grew 4.5% to RM475.7 million from RM455.2 million.

For the six months period (1H13), its net profit was up 16.1% at RM139.3 million compared with RM119.99 million a year ago.

"Net profit margin for the first half of the year was at 15% compared with 13% a year ago. Operating profit margins for the property segment also showed improvement from 20.1% to 22.2%, attributable to product mix and higher profit recognition on properties delivered to customers," said Mah Sing in a statement yesterday.

However, the group saw its 1H13 revenue fall marginally to RM898.89 million from RM912.98 million on lower contribution from its property development division.

Mah Sing group managing director and chief executive Tan Sri Leong Hoy Kum said it is on track to achieve its 2013 sales target of RM3 billion, with first half-year sales of RM1.5 billion.

Mah Sing's unbilled sales stood at RM3.9 billion as at June 30, 2013, which is 2.5 times the revenue recognised from its property development division last year, providing strong earnings visibility going forward.

As at June 30, 2013, Mah Sing's net gearing is 0.22 times, below its internal target of 0.5 times.

The group's cash position of RM797.6 million maintains its agility in land banking exercises, particularly with the acquisition of a 96.71-acre piece of land in Rawang, Selangor for RM68.7 million or RM16.30 per sq ft yesterday.

"The acquisition of the latest parcel of land in Rawang, which has an estimated gross development value (GDV) of RM520 million, raises the group's remaining GDV and unbilled sales to RM28 billion," said Leong, adding that its stable of projects will give it an earnings visibility of seven to eight years.

"The purchase of our latest Rawang township land is also timely, as it will be developed into a gated and guarded township called M Residence 3@Rawang, replicating the success of our hugely successful townships of M Residence@Rawang and M Residence 2@Rawang," he added.

Preliminary plans for M Residence 3@Rawang include 2-storey link homes and 2-storey semi-detached houses, with amenities and facilities within the township's commercial components.

"M Residence 3@Rawang will catch the spillover demand from our successful townships of M Residence and M Residence 2@Rawang, which were acquired in 2011 and 2012 respectively.

"With M Residence 3@Rawang, we now have 480 acres of township land in Rawang worth RM2.13 billion in combined GDV," said Leong.

The acquisition of M Residence 3@Rawang also comes at a time when M Residence@Rawang is reaching the tail-end for the sales of its properties. The final phase of 2-storey super link homes in Phase 4 is scheduled for launch by Sept 1, 2013.

Meanwhile, Leong said Mah Sing will launch high-rise serviced apartments, landed township developments and integrated commercial properties in the second half of the year.

Currently, the group has 45 projects in Greater Kuala Lumpur and the Klang Valley, Penang island, Johor Baru and Kota Kinabalu.

QE导火资金枯竭 东协股汇受挫末季加剧



获国油2470万合约 依华建台进军中东油气业



依华建台透过联营公司———依华建台工艺(Eversendai Technics),取得该项合约,合约的内容是为Garraf项目的15百万瓦特的发电厂,供应和交付燃料天然气空调机组(FGCU)和相关设备。






在这之前,依华建台透过子公司,在中东和印度赢得8000万令吉的基础设施项目合约,包括在卡塔尔多哈兴建卡塔尔基金会研究与发展大厦和Masdar总部,以及印度孟买(Mumbai)的WorldOne King Tower和金奈(Chennai)的Signature Tower TCS Siruseri等。


传依区城际铁路腰斩 大马钢厂未获政府通知


传依区城际铁路腰斩 大马钢厂未获政府通知

财经 2013-08-27 12:12
















李兴裕: 亚洲双赤字风险 双印之后马韩泰最脆弱








资产负债比例趋稳 确保资本外逃有序












Tropicana sales soar


PETALING JAYA: Tropicana Corp Bhd, which reported a 209% year-on-year (y-o-y) increase in revenue for the second quarter ended June 30, is on track to achieve its sales target of RM2bil for this year, said managing director Datuk Dickson Tan.
He said Tropicana achieved record new sales of RM1.06bil for the first half of 2013.
“Our locked-in unbilled sales at the end of June 2013 stood at another all-time high of RM1.65bil, which will drive our future revenue and profits as our construction progress gathers pace,” Tan said in a statement.
The group reported revenue of RM362.1mil for the quarter under review compared with RM117.1mil in the same quarter last year.
Its pre-tax profit from the property development division rose 132.7% to RM45.6mil.
Group pre-tax profit increased to RM62.3mil from RM58.7mil y-o-y on higher finance costs while net profits dipped slightly to RM38.33mil from RM38.83mil.
“The improved results from our property development division was attributed to higher profit recognition from key ongoing projects – Tropicana Danga Bay in Iskandar Malaysia; and Tropicana Grande, Tropicana Avenue and Tropicana Gardens in the Klang Valley,” said chief executive officer Datuk Yau Kok Seng.

Minzhong drop renews China overseas listing woes


China Minzhong Food Corp. lost half its market value in less than two hours after short-seller Glaucus Research Group questioned the vegetable processor’s accounts, reviving investor concern about Chinese companies traded overseas.

Glaucus said in a report the Putian, China-based company had been “significantly deceiving” regulators and investors, sending the stock 48% lower in Singapore trading yesterday and wiping $318 million off its market value before it was suspended. Minzhong said it’s seeking legal opinion and will comment as soon as possible.

Minzhong is the latest target of short sellers betting against Chinese companies trading in markets such as Hong Kong, Singapore and New York, even as five of the six analysts covering the stock recommend buying it. Minzhong is among the 143 China-based firms listed on Singapore’s $967.4 billion stock market at the end of July, according to the exchange.

“The reputation of Chinese companies in Singapore has now rock-bottomed,” said Mou Hua Lee, Singapore-based analyst at CIMB Group Holdings Bhd. “With these new allegations, it’s going to be a very long while before anyone trusts Chinese companies here.”

Minzhong shares were halted at 53 cents, after tumbling the most since the company’s listing in April 2010. Short interest in the vegetable processor rose to a record 7.2% of the outstanding stock on Aug. 19 from this year’s low of 3.8% in March, according to the most recent data from research company Markit Group.

Singapore Exchange queried Minzhong on the share price decline and will continue to closely monitor developments, according to an e-mailed statement.

The company said late yesterday it's reviewing the Glaucus report and will respond "shortly." It's also taking steps to defend its reputation and won't hesitate to take legal action, it said in an e-mailed statement.

Minzhong may have fabricated sales and payments to its largest supplier, doctored historical accounts and overstated capital spending, Glaucus said in the report. It also questioned the food processor’s reported receivables and cash balance.

“Evidence indicates that Minzhong fabricated sales to its top two customers, suggesting that the Company overstated revenues in its IPO prospectus by at least a third during the track record period,” Glaucus said, citing corporate registry records.

At least 29 Chinese firms on Singapore’s exchange, where one in five stocks are China-based companies, have been halted or ordered to delist since 2008. The FTSE ST China Index of 37 Chinese stocks traded in Singapore, commonly known as S-chips, has lost 14% in the past six months, more than twice the 5.2% slide in the benchmark Straits Times Index.

“We typically avoid S-chips,” Daphne Roth, head of Asia equity research at ABN Amro Private Bank, which oversees about US$207 billion ($266 billion), said from Singapore. “There is room for Chinese companies to improve corporate governance. That will help improve investor confidence.”

Minzhong’s biggest investor isn’t concerned. PT Indofood Sukses Makmur, the parent of Indonesia’s biggest instant-noodle maker and Minzhong’s largest shareholder, is comfortable with its investment, director Thomas Tjhie said yesterday by telephone from Jakarta.

Indofood, which doubled its stake in Minzhong to 29.3% in March, conducted due diligence on the company before it made its investment, Tjhie said, adding that he has spoken to Minzhong’s chief financial officer about the Glaucus report.

Minzhong needs to respond to the claims made by the Glaucus report, said Wei Bin, an analyst at Maybank Kim Eng Holdings in Singapore.

“There’s still some value in the S-chips but we need to be conservative in ours views,” he said. “I don’t have enough facts to prove the report right or wrong at this point.”

Other companies that have been the focus of reports by Glaucus include China Metal Recycling Holdings and China Medical Technologies Inc. The short-seller claims to “help investors navigate treacherous financial waters in search of great investment opportunities,” according to its website.

Provisional liquidators were appointed to China Metal in July and its Hong Kong-traded stock has been suspended since January. China Medical filed for Chapter 15 foreign-firm bankruptcy protection in New York last year.

The claims against Minzhong come less than a year after short-seller Carson Block said he was betting against Olam International, the Singapore-based commodity trader, sparking a slump in the stock. Block’s research firm Muddy Waters LLC later said Olam was likely to fail in a report. The commodity traded rejected the allegations.

Olam had recovered from the 7.5% slump after the report, rising as much as 9.2% as of May 22. Since the peak in the past year, the stock has dropped 20%, compared with the 5.7% decline in the MSCI AC Asia Pacific Commodity Producers index.

Muddy Waters has also targeted Chinese firms including Sino-Forest Corp., which plunged 74% before eventually filing for bankruptcy protection. Shares of New Oriental Education & Technology Group Inc. and Focus Media Holding, rebounded after initial slumps when Block questioned their accounting. Both companies have denied wrongdoing.

Tuesday, August 27, 2013

MBM Resources - Headwinds To Drag Earnings


The recent analysts’ briefing did not reveal any new information to alter our view on MBM. Our forecasts are unchanged. The company remains in a transitional phase of investing to broaden its revenue base from manufacturing and auto retail. Currency trends are currently going against stocks in this sector. FV lowered to MYR3.30 (from MYR3.50). Maintain NEUTRAL.

- Saved by associate contributions. MBM’s 1H13 EBIT contracted 32.8% y-o-y to MYR33.0m. Segmental EBIT from autoparts manufacturing fell 21.6% y-o-y to MYR28.6m, due to lower sales of steel wheels, start-up costs from its new alloy wheel plant and lower earnings from Hirotako due to pricing pressure. Motor trading EBIT fell 50.3% y-o-y to MYR7.8m, mainly from heavy discounting costs during 1Q13 to clear remnant 2012 inventory. This was offset by higher associate earnings (+20.9% y-o-y), which now makes up 75% of 1H13 pre-tax profit (1H12: 61.6%)

- Management upbeat on 2H13. Management was upbeat on prospects for 2H13, citing improved automotive sales volumes, a low interest rate environment, upbeat market response to the Perodua S-Series and positive vehicle production volumes. Also positive is the trend towards higher vehicle safety specifications, given that the newly introduced Proton Suprima has six airbags, a first for a national car. While the Preve can also be easily retrofitted with a higher airbag count, Proton’s older models cannot be similarly upgraded without significant additional investment. Nonetheless, the trend for improved vehicle safety specification is a positive for Hirotako’s airbag business going forward.

- Headwinds to drag on earnings. Weakness in the MYR will affect margins in later quarters. We estimate that every MYR0.10 change in the MYR/JPY rate impacts MBM’s net profit by MYR7.5m. While the sale of steel wheels are picking up, start-up losses from its new alloy wheel plant will steepen in 2H13, after the commissioning of the facility starts the clock on depreciation. The plant is now not expected to breakeven until 2015.

- Investment case. We see few re-rating catalysts for the stock. Ascribing a lower target P/E of 8.5x (from 9.0x), a slight discount to the industry average (9.0-10.0x) and 12-month historical average of 8.8x, we lower our FV to MYR3.30 (from MYR3.50). Maintain NEUTRAL.

Source: RHB

Jim O’Neill agreed with Jim Roger on BRIC eventually - Peter Chen


Former Goldman Sachs Asset Management Chairman Jim O’Neill, who coined the BRIC acronym describing four burgeoning emerging market countries, stands by the term he invented more than a decade ago, but admits that three of the countries have disappointed him in recent years, reported Wall Street Journal dated Aug 23, 2013

Earlier, Former analyst, co-founder of George Soros's Quantum Funds, Jim Roger, in his new book, Streets Smarts (pic) stated that Jim O’Neill only get 3 countries's wrong, India, Rusia and Brazil.

The acronym created in 2001 groups Brazil, Russia, India and China, and has become a reference for a perceived shift in economic power toward developing economies.

“If I were to change it, I would just leave the ‘C,’” Mr. O’Neill said in an interview. “But then, I don’t think it would be much of an acronym.”

Jim Roger, who travel personally to all 4 countries after his retirement from Quantum Funds, feel that only China have the potential.

Economic growth in other BRIC countries has been disappointing, and the economic outlook for developing economies in general has changed in the last few years amid the end of a commodities boom and a slowdown in Chinese growth–which nevertheless remains high compared with that of its counterparts.

Meanwhile, signs of a recovery in the U.S and expectations the Federal Reserve will soon reduce its bond-buying program have helped strengthen the U.S. dollar, sucking money out of emerging markets and putting even more pressure on their less developed economies.

It has become “fashionable” to say the developed world is recovering while emerging markets are all slowing down, Mr. O’Neill said. “But what people don’t understand is the size of China,” he added.

The economist said that if China’s economy grows 7.5% this year, as he expects, that would create an additional $1 trillion in wealth, in U.S. dollar terms. “For the U.S. to contribute at the same level, it would have to grow around 3.75%,” Mr. O’Neill said.

Economists currently expect the U.S. economy to expand 1.5% in 2013, down from 2% projected in May, according to a recent survey by the Federal Reserve Bank of Philadelphia.

From 2011 to 2020, Mr. O’Neill said he has assumed average growth for the BRIC countries of 6.6% a year, less than the 8.5% average in the previous decade. Most of it up to now has come from China.

India has been the biggest disappointment among the BRIC countries.

China’s one-child policy boost growth: This restrictive policy and China’s adoption of Deng’s pro-market reforms began in the late 1970s. Since then, China’s per capital income rose more than 8-fold. In 2028, India will overtake China (with 1.39 billion) as the world’s most populous nation with 1.46 billion. However, Jim Roger feel India unable to solved it poverty and infrastruture problem.

Vulnerable economies

That might be the reason India drop from 2nd to 4th on 2013 Global Manufacturing Competitiveness Index . It is interesting to see whether Deloitte prediction will be correct that India would rise to 2nd position on 2013 Global Manufacturing Competitiveness Index in 5 years.

The broad-based sell-off in assets of Asian emerging markets (from equities to bonds) has led to significant decline in the values of the region’s currencies. Particularly hit hard have been India and Indonesia, which have seen their respective currencies, rupee and rupiah, crash over the week.

This month alone, India’s rupee has depreciated about 6.5% against the US dollar, while Indonesia’s rupiah has fallen by around 6.2% against the greenback.

India and Indonesia’s financial markets were the first two to be routed, as exit of foreign funds gathered momentum in recent weeks. There are reasons that these two markets were the first – and worst – hit. Both have huge and widening current account deficits, which reflect their dependence on external financing, and they also running on fiscal deficits.

India’s current account deficit, for instance, stands at around 4.8% of its GDP, while its fiscal deficit is around 4.9% of GDP.

Brazil has been the most volatile in terms of investor perceptions, the economist said.

“Between 2001 and 2004, many people told me I should never have included Brazil. Then, from 2008 to 2010, people told me I was a genius for including Brazil and now, again, people say Brazil doesn’t deserve to be there,” he said.

Brazil’s economic growth, which reached 7.5% in 2010, has been weak since then in spite of multiple government stimulus measures. The country seems doomed to growth of 2% or so in both 2013 and 2014, according to economists’ forecasts.

Brazil’s rapid growth in 2010 raised expectations, but many people forgot that the country is vulnerable to big moves in commodities prices, Mr. O’Neill said.

Another problem, he said, is that private investment remains a small share of the country’s gross domestic product. Brazil’s investment rate has been stuck at around 18% of GDP, the lowest level of any BRIC country, for a decade.

Brazil’s problems in recent years were compounded by the strong performance of the Brazilian real, which made the country uncompetitive outside of commodities, Mr. O’Neill said.

The trend for the Brazilian real has changed in the last few months and the currency recently slid to its weakest level in four years, amid slow growth, declining exports and high inflation. So far in 2013, the real has retreated 14% against the dollar.

The currency’s weakness has more to do with what’s happening outside of Brazil than inside, Mr. O’Neill said. A weaker real “will help Brazil into competitiveness,” he said.

His advice for the Brazilian authorities, who have shown unease with the rapid depreciation of the currency, intervening repeatedly to try to slow the real’s move, would be “relax,” he said.

“They should only worry if there’s a pickup in inflation expectations; otherwise, they should relax,” he said, before the central bank late Thursday unveiled a massive intervention program to provide relief for the currency.

Brazilian inflation is currently 6.15%, close to the 6.5% ceiling of the central bank’s target range for 2013.

Even in the face of weak growth, Mr. O’Neill says he doesn’t plan to add or subtract letters from his famous acronym.

“If, by the end of 2015, there is persistent weak growth in Brazil, India or Russia, then I might,” he said, noting, however, that he expects Brazil to surprise positively in 2015, possibly even in 2014.

Jim Roger opine that Brazil and Russian are just Commodity and resources economy and will be unsustainable.

Other prediction by Jim Roger's book including rise of Myanmar and North Korea. It is also interesting to read his prediction on USD.

OCK Group Re-enter At Lower Levels


- LTAT’s entry could provide various synergistic benefits. The recent entry of LTAT via a 15% stake in OCK could provide several synergistic benefits to the latter, such as: (i) To comply with Bursa Malaysia’s 12.5% Bumiputera shareholding requirement (should the group managed to transfer to the Main Board in the later stage), (ii) further enriching its corporate profile; and (iii) providing better opportunity for OCK to participate in the telecom-related projects under LTAT’s portfolio in the future.

- Aiming to double telecom tower portfolio by endCY14. OCK currently owns c.70 cellular base stations and plans to increase the number to about 150 by year-end and thereafter further double the number to 300 by end-CY14. To achieve the expansion plan, besides constructing more base stations, the group will also acquire standing towers from its peers. We understand that the annual rental income of each base station is c.RM48k-RM84k, depending on the tower structure, with an average ROE of at least 15% p.a.

- Solar venture could provide a steady income. OCK is targeting to complete a 10MW solar farm project worth RM25m on MAHB’s premises in Sepang by end-CY13. Meanwhile, the group has obtained a development order for a 1MW solar farm in Kelantan through its newly acquired wholly-owned subsidiary, Milab Marketing S/B currently in the running for another 2MW project. Management indicated that every 1MW solar farm could provide RM1.4m revenue p.a. with an IRR rate of 18%-20%.

- Regional expansions. OCK is eyeing more oversea projects through its newly set up subsidiaries in both Myanmar and Cambodia given those country's nascent mobile penetration rates, which are still in the developing stage.

- Re-enter at a lower price. OCK’s share price has surged 45.6% since we first recommended it in December last year at RM0.45. It is currently trading at 10.2x FY14 PER, in-line with the average forward PER in the FBM Bursa Malaysia small capital index. We value OCK at RM0.67, based on a targeted FY14 PER of 10.5x. In view that the group’s share price currently offers limited capital upside from here, we suggest investors to take profit now and re-invest in the stock at a lower price.


- Strength: Covers more than 90% of the major technology providers in Malaysia. The largest Tier-1 Market Player.

- Weaknesses: Small market capitalisation.

- Opportunities: Capitalising on the trends in telecommunication infrastructure collaboration.

- Threats: Regulation and political risks.


- Resistance: RM0.675 (R1), RM0.730 (R2)

- Support: RM0.640 (S1), RM0.600 (S2)

- Comments: OCK’s share price is struggling to overcome RM0.675 resistance in a downward sloping trend. As the overall uptrend remains intact, trader may capitalise on the short-term correction and re-enter at lower price level @RM0.600 (psychological support) or RM0.585 (Fibonacci support).


OCK Group Bhd was was established in 2000 and is principally involved in the provision of telecommunications network services. The group are able to provide turnkey solutions, which include design, build and maintain all means of telecommunications network infrastructures. The group had completed implementation works for major local cellular network operators, including Maxis, Celcom, Digi, U Mobile, P1 and YTL. The top three largest customers for the group are Digi, Ericsson and Huawei that accounted for 16.5%, 13.0% and 9.0% respectively to the group’s total revenue of RM88.3m in FY11.


Its principal activities are mainly categorised into four segments, namely

- Telecommunications Network Services Solutions. Contributed more than 70% to the group’s total revenue of RM102.8m in 9M12 to its targeted telecommunications clienteles.

- Trading of Telco And Network Product. Trading telco network equipment and materials e.g. Antennas, Connectors

- Green Energy And Power Solution. Supply of power generation equipment e.g. Gen-sets, transformers.

- M&E Engineering Services. Provision of M&E Engineering Services in collaboration with construction companies on a sub-contract basis. Cater mainly the non-telco sector customers.

Source: Kenanga

Auto Sector - July TIV at record high, currency headwinds


- TIV hits a record high in July: July TIV was even stronger than our earlier estimate of circa 67K, officially registering at 68,431 units (+28% MoM, +15% YoY) based on data released by MAA. Whilst July 2013 arguably reflects the typically strong pre-Raya sales rush, our analysis suggests that July 2013 TIV is exceptionally strong at a sequential growth of 28%, versus average pre-Raya month sales growth of 5% in the past 5 years (See Table 3). This underpins our view that the strength in industry sales was driven by pent-up demand following consumers holding back purchases in early 2Q13. Judging by the strong bounce in July sales, on top of possibly sustained strength after August 2013 (weakness from ~1 week plant shutdown), we expect auto sector earnings to return strongly from new volume model launches. YTD TIV beats our estimates for the 1st time this year: Our estimated year-to-date (July) TIV of 380,313 units, if annualised (at 651,965 units) would for the first time, exceed our current forecast of 637,000 units for 2013. We see potential upside to our forecast later in the year. We understand there was ~1 week plant shutdown for the Raya festivities, suggesting a slight slowdown in August sales.

- Festive sales discounting started in early July: While we are cautious on the potential impact on margins from the prefestivities discounting, we bear in mind that this has been discounted and is part of industry measures since late 2012 to offer more affordable cars. While this is an ongoing process, higher localisation, increasingly cheaper parts, and potential tax incentives from the upcoming NAP should buffer the impact on margins in the mid-term. Recall that despite a 10%-11% effective decline in pricing for Perodua (as an example) in 1Q13, margins actually expanded given a larger 12% savings in input cost (mainly cheaper parts from vendors for Perodua).

- Weaker MYR is a developing risk: The sector has enjoyed good earnings following the strengthening of the MYR over the past four quarters. While the impact of this may only be seen in 4Q13, there is risk of FY14F downward earnings adjustment should the MYR weakness persist (our current projections factor in JPY:MYR at 3.4-3.5 and USD:MYR at RM3.15 over FY13-14F). TCM is most sensitive to forex – every 1% change in USD impacts earnings by 4%-5% while every 1% change in JPY impacts earnings by 1.5%-2%. MBM has little exposure to USD as the Perodua and Hino’s import are in JPY. Every 1% change in JPY:MYR impacts earnings by 2%. YTD, USD:MYR has averaged at RM3.23 while JPY:MYR at 3.33.

- Watch out for upcoming NAP: Two key catalysts that we expect in the upcoming NAP are:- (1) Tax incentives, which will lower duty costs for manufacturers, particularly non-nationals (currently accounts for c.35% of total cost); (2) Incremental export volumes which will gradually act as a natural hedge and reduce earnings volatility from forex movements. Every 1% increase in (overall) unit sales volume impacts earnings by c.3%, on our estimates.

- Maintain bottom-up driven OVERWEIGHT on autos: The record July TIV underpins our view of a pent-up and demand driven recovery after the weakness in April-May 2013 following uncertainties in the direction of car prices. TCM (BUY, FV: RM7.50/share) remains our top sector pick for: (1) Structural market share expansion as it fills up gaps in its model line-up (in the B-segment, A-segment, low-end C and MPV segments) which had existed for decades – leading to Nissan strongly outperforming industry growth in the next 24 months (Nissan FY13F vol: +50% vs. TIV: +1.5%); (2) Potential to qualify for EEV initiatives to be announced in the NAP, which will positively alter TCM’s cost structure and attract export volumes; (3) Potential M&As. MBM (BUY, FV: RM4.60/share) meanwhile, provides best exposure to Perodua as the latter accounts for >60% of MBM’s earnings (vs. 15% for UMW) and valuations are way more attractive at FY13F PE of 9x (vs UMW: 16x). Another 15% price reduction from vendors is expected in FY14F, which should buffer price discounting and currency weakness.

Source: AmeSecurities

Kossan Rubber Industries - The Party Continues


Results in line. 2Q13 net profit of MYR34m (+1% QoQ, +42% YoY) brought 1H13 net profit to MYR67m (+46% YoY), making up 50% and 52% of our and consensus’ full-year forecasts respectively. While Kossan’s share price has done remarkably well (+84% YTD), we think its current FY14 PER valuation of 13x is still undemanding, compared to its bigger peers’ 16-17x. We maintain our forecasts but raise our TP to MYR7.12 (from MYR4.70), based on a target 15x FY14 PER (from 10x), still below our target PERs of 17-18x for its bigger peers. BUY.

2Q13: Stronger YoY. 2Q13 net profit of MYR34m was flattish QoQ on a flattish sales volume and stable EBIT margin of 14% (+0.1-ppt QoQ). However, it was much stronger on a YoY basis (+42% YoY) due to: (i) a much higher sales volume at its glove manufacturing division (+22% YoY); and (ii) a higher EBIT margin (+3.5-ppt YoY), owing to lower raw material costs.

Diversifying businesses. Though Kossan is still adding more nitrile glove capacity (+12% by 2Q14), it is also concurrently growing its other business segments in order to reduce its over-reliance in the nitrile segment. Other business segments which Kossan is currently growing are: (i) Technical Rubber Product (around 12% of total revenue), where there is a strong demand seen in the automotive sector in US; (ii) inhouse brand surgical gloves (“InTouch”), where it offers a cheaper surgical glove alternative to the emerging markets; and (iii) cleanroom gloves and face mask operation in China, where the contribution to group earnings is insignificant currently.

Maintain forecasts. Earnings in the sequential quarters may be stronger QoQ as more sales deliveries take place. We maintain our earnings forecasts for now, which has imputed for a 15% and 12% glove volume growth in FY14 and FY15 respectively. While Kossan’s forward PER of 13x is above its historicals, we still see further upward re-rating as there is a lack of investible glove plays and the big-cap peers have already traded up to 16-17x now.

Source: Maybank Research - 27 Aug 2013

Sunway - Expect Stronger Property Sales In 2H13


Maintain BUY. Sunway’s 1H13 results, to be released on 29 Aug, will likely meet expectations. Given strong property product launches in the pipeline (≈MYR1.5b new launches in 2H13), Sunway could exceed its internal sales target of MYR1.1b for 2013 (2012: MYR1.6b). We adjust our FY13/14/15 earnings forecasts by -1%/-1%/+4% to reflect the removal of its China project from our forecasts and higher stakes in Sunway Velocity (SV) and Sunway Iskandar (SI). Our TP is largely intact at MYR3.47 on an unchanged 20% discount to MYR4.34 RNAV.

To track expectations. We expect core net profit of MYR105-110m (+22% QoQ, +42% YoY) in 2Q13, lifting 1H13 earnings to MYR200m (+41% YoY), accounting for 50% of our full-year forecast. The better quarterly earnings will be underpinned by: 1) MYR1.6b in property sales achieved in 2012, 2) MYR4.2b outstanding construction orderbook as at today, and 3) strong net income growth in SunREIT (+15% YoY).

Likely to exceed its internal property sales target. Despite the lack of new launches in 1H13, Sunway has managed to lock-in ≈MYR300m in property sales in 2Q13, lifting 1H13 sales to ≈MYR500m, or 45% of its MYR1.1b sales target for 2013. We think there is a high chance for Sunway to exceed its internal target for 2013 given strong pipeline launches including SI’s phase 1 and the Novena project in Singapore.

Another MYR600m new construction works? Sunway has successfully bagged MYR1.76b of contracts YTD, lifting total outstanding order book to MYR4.2b, providing medium-term earning visibility. This is close to our MYR1.8b job win target for 2013. Hence we make no change to our assumptions. We understand that Sunway is currently bidding for another MYR600m worth of building works.

Earnings adjustments. We adjust our earnings forecasts to factor in: 1) the removal of Tianjin Eco City (China) from our forecasts due to potential delays in property launches and 2) higher 85% equity stake in SV (from 50%) and 45% in SI (from 38%). Our RNAV remains intact at MYR4.34. Sunway has relatively low foreign shareholding of 5.9% (excl. GIC) compared to its Iskandar peer, UEMS’s 20.4%.

Source: Maybank Research - 27 Aug 2013

ARA: Malaysia stable market for investment


KUALA LUMPUR (Aug 27, 2013): Singapore-listed ARA Asset Management Ltd, which has acquired five shopping malls in Malaysia in the last 30 months under its private real estate fund, sees the country offering a stable market for investments compared with other Asian markets.
ARA Asset Management director of portfolio management Thomas Kong (pix) told SunBiz that Malaysia is a growing market in Asia.

"The Malaysian market offers (an international) diversification (opportunities) for us and is more stable. For example, Hong Kong is a more volatile market where property prices fluctuate.

"Malaysia offers slower but steadier returns. The rentals are also reasonable. It's conducive for a mall operating business where you grow steadily. For us, the other good thing is it starts from a low base, hence there is a lot of potential uprising," he said in an interview.

Although Malaysia is not without its competitors, Kong said, ARA's joint venture in the 30%-owned AmFirst Real Estate Investment Trust (REIT) was used as a springboard to enter the Malaysian market and today, it knows the local retail scene well.

"There are many funds in Malaysia and on the other hand there are also funds of big names that are not here yet. Being Asia-based, we (ARA) do have that advantage.

"We also like to do more in Singapore, but the market there is more competitive than Malaysia. (As such,) we have more investments in Malaysia than Singapore," said Kong.

The ARA group and its private funds are always on the lookout for new assets. Its assets under management stood at S$23.5 billion as at June 30, 2013, which include assets in Malaysia.

Still, Kong said ARA, which owns Klang Parade, Ipoh Parade, 1 Mont Kiara, Aeon Bandaraya Melaka and Citta Mall under its flagship private real estate fund ARA Asia Dragon Fund (ADF), will not be buying new assets here to be injected into ADF but instead for its other funds.

ARA's other fund is the ADF II, which has so far invested in some residential properties in Kuala Lumpur, but Kong said it will also look at retail opportunities here.

"Retail is still very much our focus, but we also like residential properties in Malaysia such as landed housing and condominium developments," said Kong.

He said there is a lot of potential in the retail market and two key indicators are Malaysia's strong gross domestic product growth and per capita income.

"AmFirst REIT was our first step in Malaysia in 2006 before we set up ADF in 2007. It gave us a footing and platform to talk to other developers (in Malaysia). If not (for AmFirst REIT), it would have been difficult for us to acquire our first two assets, which are Aeon Bandaraya Melaka and 1 Mont Kiara," said Kong. AmBank Group holds the remaining 70% interest in Bursa Malaysia-listed AmFirst REIT.

The Malaysian Retailer-Chains Association had recently said that retailers are more cautious in expanding their businesses into new shopping malls now and are skeptical towards new malls due to the current unstable economic climate and weak sentiment. Retailers also face high rental rates and the shortage of manpower, especially in the city.

On this, Kong said ARA is selective when it looks at investments and getting a well-located mall is half the battle won.

"We have malls located in strategic locations; both Ipoh Parade and Klang Parade are located in centre of Ipoh and Klang respectively. Also, we typically back our investments up with detailed due diligence before our acquisition.

"The tenant mix, mall design and mall management would then determine the full success of the mall. With the upgrading, improvement in tenant mix and our strong retail management, we believe that our malls are poised to succeed," said Kong.

Kong also said its private real estate funds are able to invest in retail brownfield sites to completed projects.

"For Klang Parade, we shut it down for five months, and REITs are unable to do this as they won't have income unless they have a big portfolio. For us, it's okay because we don't look at dividend but total returns for the fund," he explained.

REITs, as opposed to private real estate funds, are yield-based and involve the distribution of dividends to investors; hence it has to invest in stabilised or income-generating assets, said Kong..

Today, ARA manages six REITs listed in Singapore, Hong Kong and Malaysia, with a diversified portfolio spanning the office, retail and logistics sectors. It also manages private real estate funds investing in office, retail, residential and meetings, incentives, conferences and exhibitions assets across Asia

2008年以来最大撤潮 外资上周抛售29亿


















Short-seller hits China food company


SINGAPORE: Food producer China Minzhong Food Corp Ltd became the first Singapore-listed Chinese firm to come under attack by a short-seller, which wiped off more than 50% of its market value in two hours and triggered a trading halt.

Short-sellers have in recent years targeted Chinese companies listed in Hong Kong, Canada and the United States, citing irregularities, but they have so far avoided any of the 143 China-based firms listed on the Singapore Exchange Ltd (SGX).

China Minzhong, which until yesterday’s share price slump had a market value of around US$520mil, was hit after California-based Glaucus Research Group issued a report alleging the company misled investors about sales to its biggest customers.

The report also raised questions over the credibility of China Minzhong’s financial performance compared with its peers.

Glaucus said it and its associates had a direct or indirect short position in the company.

Travis Seet, China Minzhong’s financial controller, told Reuters the company was taking legal advice on how to respond to the report.

He declined to make any further comment and trading was halted pending an announcement from the company.

China Minzhong listed in Singapore in 2010 and has attracted several big-name investors, including Singapore sovereign wealth fund GIC which sold its 14.4% stake in February to Indofood Sukses Makmur Tbk PT.

Other large investors include Franklin Templeton Investments Corp, which holds just under 11% of the food producer, according to Thomson Reuters data.

Analysts said China Minzhong would struggle to recover from its share price plunge regardless of the veracity of the short-seller’s allegations.

“Given the huge damage done already, we believe it will be an uphill task (especially without GIC’s backing now) for the company to rebuild confidence,” Lim & Tan Securities wrote in a note.

Shares in China Minzhong fell 47.8% in two hours of trade before the company requested a trading halt. Nearly 24 million shares were traded, almost 10 times the average full-day volume traded over the past month. — Reuters















1. 對外的金融地位:經常帳盈餘或赤字相對GDP的比例、經常帳盈餘或赤字相對GDP比例的5年變化、金融業的外國資產相對GDP的比例、外匯流動性指標(外匯儲備加短期流入外資,再減去短期外債,相對GDP的比例)、外匯流動性指標的5年變化、外債比例。

2. 負債:私營非金融業的信貸相對GDP的比例的5年變化、公共債務總額相對GDP的比例、財政盈餘或赤字相對GDP的比例。

3. 宏觀經濟:通脹、出口相對GDP的比例、商品佔出口的比例。

18個新興市場 12個風險較低






GaveKal Dragonomics 資深經濟師關閉本視窗



























倘若2013年的其他三个季度,也能维持这样的表现,那么全年每股净利将有可能是49.56【12.39 * 4】。








朝圣基金局玩转 ~ 顺利实业集团【KSL】





产业贷款年限最长35年 国行3招抑制家债

4。关于那个投资产业公允价值调整【Fair value adjustments of investment properties】,不要以为它没有出现了,就是好事。








投资观点 2013-07-01 14:55

产 业股在全国大选之后经历一些调整,根据联昌证券报告,产业领域近期因国家银行或废除“发展商承担利息计划”(Developers’ Interest Bearing Scheme,DIBS)的市场传言而面对压力。市场盛传国行会与产业发展商会面,商讨抑制产业市场的投机活动,料国行将向发展商承担利息计划下手。






此外,很多大型的外国公司也开始进驻依斯干达发展区,这包括CapitaLand、Ascendas Land以及Country Garden。


此外,Iskandar Waterfront控股以及Medini Iskandar Malaysia据悉将会上市,再加上这里的土地买卖非常活络,使实际净资产价值获得上修。尽管产业股处于上涨趋势,但是顺利实业的股价表现还是落后同行。








1.顺利花园(TAMAN NUSA BESTARI):在新山西北部,与第二大道有很好的连接。227英亩土地总发展价值10亿。

2.顺福花园(TAMAN BESTARI INDAH):在新山东北部,靠近乌鲁地南区。700英亩土地总发展价值21亿。

3.金葩顺利花园(TAMAN KEMPAS INDAH):在新山北部,靠近南北大道和Kempas Toll入口处。237英亩土地总发展价值10亿。

4.KSL综合城(KSL CITY):在新山市区。是南马区最大型的购物中心。离新山的关卡约5分钟车程,非常靠近新加坡。该酒店和住宅已经在2012年年尾竣工;

5.巴生金葩顺利花园(TAMAN KEMPAS INDAH):首个巴生谷综合房地产发展计划。靠近武吉丁宜永旺和武吉拉惹佳世客购物中心。









Pantech Beniftis from Weaker Ringgit


Increased speculations on the timing of the US Federal Reserve pulling
back on its bond purchase programme buffeted emerging capital markets in
recent days. The reversal of capital flow — on expectations of a
stronger US economy and rising long dated government bond yields — sent
bond and stock markets as well as currencies for many emerging countries

The ringgit fell well out of its trading range — of between 3 and 3.2 to
the US dollar — for the first time since mid-2010. At its worst, the
local currency traded above 3.33 against the greenback — compared with
its recent high of 2.93 in mid-May.

Given the confluence of factors such as slower growth, high fiscal
deficit, narrowing current account surplus and high foreign ownership of
government bonds, the ringgit could remain under pressure in the near to
medium term.

*Exports translate into higher ringgit sales

*Pantech Group is among the beneficiaries of a weaker ringgit. The bulk
of its manufacturing sales — which accounted for just over half of total
sales — is export-oriented and denominated in US dollar. The company
sells its carbon and stainless steel pipes, fittings and flow control
(PFF) products worldwide, including to the US, Europe, the Middle East
and Asia.

In addition, the company’s UK-based manufacturing outfit, Nautic Steels,
is doing very well, and is one of the key growth drivers going forward.
Pantech just completed the purchase of a second plot of land near its
existing facility. The new equipment is set for commissioning within the
next month or two. With the additional capacity and space, it will be
able to widen product range and build inventory to support a sales base
estimated to double current levels. A weaker ringgit against the British
pound also translates into higher ringgit sales.

*Good demand for manufacturing arm

*Demand from the oil and gas sector is still quite robust. Prevailing
oil prices — the benchmark Brent crude is currently hovering around
US$110 (RM330) per barrel — remain supportive of exploration and
production activities. To be sure, competition is intense. But Pantech
is holding its own.

The higher value niche products manufactured at Nautic Steels are
approved by most of the world’s oil majors. Locally, the carbon
manufacturing plant is running at full capacity. Pantech is able to
maintain margins — despite a competitive environment — on the back of
better product mix, including more orders for higher margin long bends,
and lower raw material costs.

On the other hand, the expected turnaround at the stainless steel plant
suffered a setback earlier, when stainless steel pipes from Malaysia,
Thailand and Vietnam were slapped with anti-dumping duties in the US.
Pantech expects to make its last shipment to US customers by end-August.
It intends to fight the decision in court, likely by March-April 2014.

In the meantime, the company is planning to take up half of the spared
capacity to up production of stainless steel fittings. The stainless
steel plant made a loss in the 2013 financial year (FY13) and a small
profit in the first quarter (1Q) of FY14. The stainless steel plant is
expected to stay in the black, albeit marginally so, for the rest of the
year on the back of this latest development — we had originally
forecasted stronger earnings contribution from this plant.

Elsewhere, outlook for the trading division is also turning out to be on
the weaker side. Sales fell 12% year-on-year in 1QFY14 (March to May),
muted by uncertainties in the run-up to the general election. However,
the expected pick-up in momentum post-election has yet to materialise —
although this could improve in the later part of the year. Capital
spending in the local oil and gas sector is still expected to be strong.

*Still good value at 8.8 times FY14 earnings

*Taking into account all the above-mentioned factors, we are keeping our
earnings forecast broadly unchanged. Pantech reported a net profit of
RM13.8 million in 1QFY14, up 10.4% y-o-y. We estimate earnings will
improve from this level in the current quarter ending August.

FY14 net profit is estimated to total some RM63 million — up 15% from
RM55 million in FY13. Looking ahead, we expect net profit to continue to
expand at a double-digit pace in FY15 and FY16.

At the current share price of RM1, Pantech shares are trading at only
8.8 and 7.7 times our estimated earnings for FY14 and FY15, respectively
— still very attractive relative to the average valuations for oil and
gas stocks, the broader market and its own prospective growth.

Unlike many growth-oriented companies, Pantech also offers pretty
attractive yields. The company paid dividends totalling 4.6 sen per
share in FY13. With lower capital expenditure planned for the next two
years — barring any new acquisitions — strengthening cashflow and
gearing at only 35%, we expect the company to maintain a high payout ratio.

Assuming a 45% profit payout — the average ratio for the past three
financial years — dividends will total 5.1 sen and 5.9 sen per share in
FY14 and FY15, respectively. That will earn shareholders
higher-than-market average net yields of 5.1% and 5.9% at the prevailing
price for the two years.

/Note: This report is brought to you by Asia Analytica Sdn Bhd, a
licensed investment adviser. Please exercise your own judgment or seek
professional advice for your specific investment needs. We are not
responsible for your investment decisions. Our shareholders, directors
and employees may have positions in any of the stocks mentioned./

This article first appeared in /The Edge Financial Daily/, on August 26,