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Monday, November 30, 2015

Mitrajaya Holdings - Ascending to another high


  • Mitrajaya posted another commendable set of results in 3QFY15 with revenue of RM231m (+59% YoY, -5% QoQ) and earnings of RM25.8m (+97% YoY, +12% QoQ).
  • Cumulative 9M earnings amounted to RM62.3m, increasing strongly by 66% YoY.


  • 9M earnings made up 78% of our full year estimate (67% of consensus) which is within expectations.


  • None. Usually declared in 4Q.


  • Robust growth for construction. The construction division experienced the best of both worlds given topline growth coupled with margin expansion. Construction revenue for the 9M period almost doubled YoY (+94%) while EBIT margin expanded from 9.9% to 12.9% over the same period.
  • Secures RAPID contract. Mitrajaya in a 51:49 JV with Syarikat Ismail Ibrahim has been awarded 2 contracts by PETRONAS totalling RM186m for various civil and infra works at RAPID. The works are scheduled for completion within 22-32 months.
  • Decent level of job wins. With the recent contract, Mitrajaya’s YTD job wins currently stands at RM469m (FY14: RM1.1bn). We estimate its orderbook to stand at RM1.6bn, implying a superior cover ratio of 4.3x on FY14 construction revenue. Management is hopeful to add on more job wins before the year end.
  • Support from South Africa. 9M domestic property revenue was lower by 37% YoY, as Wangsa 9 project is at the initial construction stage. However, this was partially offset by a strong performance in South Africa with revenue up 73% YoY from the sale of completed bungalows.


  • Delays in construction and softening property market.


  • The recent contracts at RAPID do not alter our earnings forecasts as YTD job wins of RM469m is within our RM500m orderbook replenishment target for FY15.
  • We maintain our earnings forecasts as the results were in line and remain confident that FY15 will post another round of record earnings at RM80m (+49% YoY).


  • Maintain BUY, TP: RM1.95
  • Mitrajaya remains our top pick amongst the small cap contractors as it offers a compelling case of strong growth (3 year CAGR: 24%) at inexpensive valuations of 9.8x and 8.1x FY15-16 P/E.


  • Our SOP based TP of RM1.95 implies FY15-16 P/E of 15.6x and 13x respectively.
Source: Hong Leong Investment Bank Research - 26 Nov 2015

Insas: When the investor is not properly informed - felicity

Thursday, November 26, 2015 
In several of my earlier articles, I have mentioned of companies which holds their businesses in form of investments should be at the very least be measured using its book value.

In Buffett's Letter to Shareholder in 2011 Warren shared his thought on share repurchases, and book value valuation.
“We have no way to pinpoint intrinsic value. But we do have a useful, though considerably understated, proxy for it: per-share book value. This yardstick is meaningless at most companies. At Berkshire, however, book value very roughly tracks business values. That’s because the amount by which Berkshire’s intrinsic value exceeds book value does not swing wildly from year to year, though it increases in most years. Over time, the divergence will likely become ever more substantial in absolute terms, remaining reasonably steady, however, on a percentage basis as both the numerator and denominator of the business-value/book-value equation increase.”

Besides being critical of stocks or funds such as i-Capital which has been trading at 0.8x or lower on its book value, another stock which has been trading like a fund is Insas. In its latest comment in the Annual Report 2015, here is what the Chairman has got to say.

Taken from Chairman's statement AR2015


While, it does say that its accounting does conform to MASB, its holdings in Inari is being reflected wrongly. Investors are not well informed enough on what the valuation of its holding is in the books.
Another test in its holdings of Inari is that it does control the company as it is the single largest shareholder by far, in its accounts it is not taken as a subsidiary. It has representation by way of having 4 members / out of 9 board members in Inari. The Chairperson (Tengku Hajjah) and Executive Vice-Chairman (Tan Seng Chuan) of Inari are both from Insas.
How is this not considered a company that is controlled by Insas? I feel that the auditors have erred and did not challenge the management enough on this.
Treating Inari as an associate

Jaya Tiasa Holdings - FFB yield gradually improving BUY

- We upgrade Jaya Tiasa to BUY, with a higher fair value of RM1.96/share (vs. RM1.18/share previously), based on an FY16F PE of 25x – premised on a steady improvement in FFB yields and strong timber prices in 1QFY16.

- The 25x PE is 3 notches below its10-year forward PE of 28x. At our fair value, we are pricing the oil palm division at an EV/planted ha of RM24,000 – cheap by any measure. At the current price, the implied value is only RM14,000/ha. (See Exhibit 5 for the implied valuations)

- Recall the EV/ha for brownfield land bank in Sabah and Sarawak is reportedly in the range of RM62,000- RM68,000. We believe the current discount is unjustified, notwithstanding its low FFB yield (at only 12.5 tonnes/mature ha for FY15). Recall it has been affected by a contractor previously leaving large portions (5,000ha- 10,000ha) of its estates derelict; rehabilitation is continuing. Discounting 10,000ha from the planted hectarage still gives an EV/planted ha of RM28,000.

- Jaya Tiasa yesterday reported a 1QFY16 core net profit of RM31mil (+97% QoQ, +15% YoY), accounting for 40% and 33% of our and consensus forecasts, respectively.

- FFB production totaled 274,000 tonnes (+42% QoQ, +9% YoY) – accounting for 30% of our full-year projection. The oil palm division eked out a PBT of RM2.4mil for 1QFY16.

- It reported FFB production of 95,599 tonnes for October – bringing the total YTD to 370,151 tonnes, +13% from the previous four-month period.

- Despite 1QFY historically being the peak quarter, we believe it is still on track to meet or even slightly surpass our 900,000 tonne forecast. For that, it only needs to harvest 66,231 tonnes/month for the rest of FY16 vs. the average of 61,665 tonnes/month for FY15. As such, we maintain our numbers for now.

- Log prices for 1QFY16 remained strong, registering at an estimated US$228/cu m (+7% QoQ, YoY), while plywood prices improved by 12% QoQ and 11% YoY.

- Note that according to its FY15 annual report, Jaya Tiasa’s log quota has been cut by 15% to 78,000 cu m/month from 92,000 cu m/month. We have assumed a 24% cut. We maintain our sales volume assumption for now.

- We upgrade Jaya Tiasa to BUY, on the back of improved FFB yields over the last four months and sustaining high log prices. The stock provides a cheap entry into the oil palm play.

Source: AmeSecurities Research - 27 Nov 2015


2015-11-27 16:20


















安聯星展研究指出,雲頂綜合旅遊計劃(GITP)如期進行,管理層預料在2016年推介Sky Avenue和Sky Plaza購場廣場,以及新纜車。21世紀福斯主題公園則在2016年杪至2017年初開張。

“該集團已獲得當局批准以在Sky Plaza增加新賭桌,儘管管理層未透露太多新賭桌訊息。”



(Icon8888) WTK (Part 2) - Excellent Results

1. Introduction 

I first wrote about WTK in February 2015.

Since my article was published, the group has disappointed investors by failing to deliver good results despite benefiting from weak Ringgit.

As a result, its share price has been stagnant. The stock closed at RM1.23 last Friday, more or less the same level when I first wrote about it in February.


However, it is better late than never. The company finally delivered a sterling set of results on Friday. Monday will be a happy day for its shareholders.

2. Past Few Quarters Performance

The group's past few quarters' performance is set out in table below, which is self explanatory.

In this latest quarter, the timber division really shines, with PBT increasing by more than 100% q-o-q. This is consistent with other industry players.

Balance sheets remained strong. With net assets of RM1.35 billion and net loans of RM11.7 mil, net gearing is negligible at less than 1%.

3. Concluding Remarks

According to various analyst reports, timber industry is expected to continue to do well going into 2016 (sorry, I have not kept any report that can be cut and paste in this article. But you can refer to RHB Investment Bank's report, if I remember correctly). I expect WTK's timber division to continue to do well going forward.

The plantation division is a dark horse as 11,000 hectares had already been planted. Those estates are only starting to produce (latest quarter revenue RM2.2 mil only). Going forward, this division will be a material source of growth.

If after reading this article and you still don't feel comfortable to invest in this company, please don't force yourself to buy.

Because I want to buy more on Monday.

Have a nice day.

[转贴] 炒股奇迹8年增值34倍, 一个天才小散戶的不亏战法

Sunday, November 29, 2015




   通过一位在证券公司工作的朋友介绍,笔者终于如愿以偿。主人公学历不高,没有上过正规大学,只有一张自学经济管理专业毕业的文凭;他交易不多,每年只操 作三五笔,涉及品种仅二三个,甚至因为上夜班连看盘的时间都难以保证。但他是个股市奇才,自2003年起连续8年保持盈利,即使是在指数暴跌的2008年 也不例外,历年投入的4万元本金至去年年底已增至140多万元,翻了5番还多……他叫李兵(化名),是浙江宁波某企业的一名普通工人。




   【李兵】:我1997年入市,从第一笔投资400股宇通客车开始,至2000年陆续投入本金约4万元。自2003年至今每年都保持了盈利。其 中,2003年、2004年获利一倍以上,2005年盈利8%,2006年30%,2007年130%,2008年35%,2009年100%,2010 年70%。投入的4万元本金至去年年底已增至140多万元,累计上涨了34倍。

  【评点】:单就每年盈利的幅度来看,在1亿多股民 里,李兵的战绩恐不会排在最前列。但从每年都能盈利、8年累计增值34倍看,李兵绝对称得上股市奇才之一。多数投资者入市多年最终一无所获不是因为没有赚 到钱,而是因为赚到的钱后来又还了回去,最终成了一场零和游戏。相比之下,持续盈利、积少成多这种看似不起眼的投资方法正是包括李兵在内的投资高手们能在 股市里大获全胜的奥秘所在。



   【李兵】:概括起来8个字:尊重趋势,顺势而为。当股市趋势向上时一路持有,向下时不能补仓。如果在趋势向下时过早补仓就相当于再次犯错。因此,作为资 金量非常有限的普通散户在炒股时千万不能不尊重趋势股价一跌就补仓。其实,这方面我也曾走过弯路。记得我第一次大额投资买的是海信电器,当时从12元多开 始建仓,一跌就买、越跌越买,最后一次买入时价格已跌至6.5元。后来,海信电器跌到5.4元时实在撑不住了,只好清仓,结果亏了60%,教训极为深刻。 从2003年开始能够持续盈利,主要也是得益于趋势交易,顺势而为,不与趋势作对。

  在进行趋势交易时重点注意两点:一是不能追涨杀 跌。因为追涨杀跌所带来的获利往往是极为短暂的,但导致的套牢却是永久的;二是不能完全依赖指数。如果说2008年之前指数与个股的关联性相对密切的话, 那么进入2009年之后,随着大盘权重股的大量发行上市,这种关联性就弱化了,投资者要是再想依据指数炒股就难了(这里所说的指数是指综合指数)。所以, 在进行趋势交易时,投资者不仅要参考综合指数的动向,更要观察分类指数的涨跌以及相互之间的关联性,还有股指期货的市场走势。只有把上述因素结合起来一并 观察、分析、研究,才会有参考价值。

  【评点】:揭开李兵这些年来取得巨大成功的神秘面纱不难发现,其成功的核心密码正在于做到了尊 重趋势、顺势而为这八个字。这就如同坐电梯,有的人上上下下到最后从哪里来又回哪里去,有的甚至进入了地下室(亏损),而李兵坐的电梯只上不下,收益随之 水涨船高。做到了尊重趋势,顺势而为,相当于坐了部只上不下的电梯,想不盈利也难!



   【李兵】:2005年上半年,股市在前两年持续下跌的基础上再度出现了恐慌性下跌,最低跌至998点。这一年,投资者要想获利的前提是要保存好实力,否 则就无法在接下去的反弹中取得好的收益,这一点我深有体会。记得当时我重仓持有的股票是泰豪科技,当时选择投资这家企业的原因有三个:一是国家领导人曾去 这家企业调研,说明企业受到国家的高度重视;二是企业致力于信息技术应用,倡导智能科技生活,当时感到该企业极有可能成为引领中国智能建筑电气产业发展的 龙头企业;三是估值低、盘子小、公积金和净资产等方面的优势十分明显。在2005年大盘调整中,虽然泰豪科技也出现了一定程度的下跌,但该股跌幅非常有 限,加之买入后做过几次高抛低吸,股价下跌但筹码增加,所以,当年总体盈利仍达8%左右,年底资产总值也首次达到了6位数(10万元)。更重要的是保存了 实力,为参与后来的上涨行情准备了充足的子弹。




   【李兵】:可以这样说,让利润飞跑、把亏损截断是实现持续盈利的精髓和核心。这方面,我既有成功的经验,也有失误的遗憾。应该说,2006年选择的几个 品种都是当时市场的大牛股,虽然也带来过一定的收益,但主升段还是没能抓住。譬如用友软件,这是一家业绩非常突出、市场占有率高、在软件业极具代表性的企 业,当时17-18元买入,23-24元卖出,赚了30%左右(后来该股涨到了68元)。之后,又参与了中青旅投资,6元多全仓买入,两三个月后9元多卖 出,获利50%。后来,该股用了一年多的时间涨到了37元以上。这两只处于上升通道的股票当时都没有做到让利润飞跑,留下不少遗憾。所幸的是,2006年 除了在投资宁波联合时有过亏损外,其余都是盈利,总体涨幅大概在30%左右,年底市值达到了13万元。

  【评点】:李兵的投资经历告 诉人们,让利润飞跑,把亏损截断是一把成就投资大业的尚方宝剑,但拥有并且用好这样的尚方宝剑须具备两个条件:一是要有一双发现牛股的慧眼,能在数千只股 票中及时准确地发现潜在的牛股并及时买入;二是要有一股拿住牛股的底气,无论市场风云怎么变幻,舆论环境多么不利,都能做到不为所动,一路持有。



   【李兵】:我的投资理念是:从基本面入手,注重成长,价值投资。投资者买入一只股票,实际上就是投资一家公司,因此一定要与企业同呼吸,共命运。 2007年,我先是在1月份以9元多的价格全仓买入康恩贝,当时这家企业已拥有自己的生产基地,形成了一定规模的产业链,当时对这家企业的估值目标是28 元。结果,当年该股就涨到了28.55元。


   建仓后,我发现安琪酵母在生产经营各方面都非常不错,就是感到在江浙一带的发展不够积极。于是,我通过上市公司网站向公司管理层提出了有关发酵合作、市 场拓展和广告宣传等方面的合理化建议。结果,不仅提出的部分建议很快被公司采纳,而且公司还派出浙江地区负责人具体落实我提的建议。后来,我又把有条件与 公司合作的一些药店信息发给公司,公司又派人专程来浙江进行调研。当安琪酵母涨至30-32元时我才卖出,投资该股获得近1倍的收益也为2007年全年实 现130%的收益立下了汗马功劳。


   【评点】:小散户也能在参与企业生产经营中大有作为,这种多数投资者连想都不敢想更不要说做的事情竟然在李兵身上变成了现实。这也使笔者更加明白这样一 个道理:要想成为股市里少数的赢家,必先成为股市里少数的另类,做一个与众不同的股民,一个与企业同呼吸、共命运的另类投资者。



   【李兵】:对康恩贝的估值从预判到实现只有几个月的时间,这其中既有公司本身价值所起到的作用,也有大盘配合的因素。还有一只股票同样能说明散户学会估 值的重要性,那就是中国石油。2007年中国石油公开发行时,我也参与了申购且中了1000股,同时中签的还有我的4位同事。中签后,我就对中国石油的合 理价位进行了预估,从该股的流通盘、盈利率、分红率等因素来看,我对它的估值是18元以下,这与当时绝大多数人认为它是亚洲最赚钱的上市公司这一市场预期 明显不符,但我依然坚持自己的判断,在中国石油挂牌交易首日设定了自己的心理价位35元,只要开盘价在35元以上就卖出。结果,挂牌交易首日,中国石油大 幅高开,我毫不犹豫地通过集合竞价方式以48.60元的开盘价将它卖出,卖出价比历史最高价只低了2分钱。

  另外,在中国石油上市当 天,我预感该股6个月之内极有可能破发,于是将这一情况告诉其他4位同事,结果有3位同事听了我的话后及时卖出,另一位同事当时没有卖出,直至中国石油跌 至12元时心理彻底崩溃才割肉卖出。值得一提的是,还有一个朋友在30元价位拿出全部家当买入中国石油,我劝其及时离场,结果他赔些交易费后以30元的价 格及时清仓躲过一劫,否则后果不堪设想。


   【评点】:作为散户,虽然在许多方面都无法与实力强大的机构相提并论,但这并不意味着散户不需要学会对股票的合理价位进行必要的估值。恰恰相反,学会估 值正是散户成功炒股的一项基本功。李兵的成功实践充分说明,散户也要学会估值,特别是要对自己所关注和拟投资的公司作出合理估值,而不是随波逐流,人云亦 云。



   【李兵】:关键在两点,一是及时逃顶。前面我已经讲到,要让利润飞跑,把亏损截断。顺势而为其实也包含这两个方面,既要让利润飞跑,又要把亏损截断,而 且从某种意义上讲,后者比前者还要重要。作为普通散户,我一直把大盘的走向放在首位,在大盘没有确认见顶的情况下,喜欢顺势而为,以获得最大的收益;但当 大盘确认已经见顶时,就要迅速离场,以免给后面的投资带来被动。所以,在大势不好的情况下我在4700点上方先撤资20万元,部分资金留在股市。另外,当 2008年5月指数从高点下来已打对折、许多人开始唱多时我依然看空股市,当时主要鉴于高估值高风险、通胀无牛市、总体经济形势趋于悲观、人民币升值暂告 段落、畸高的房地产价格、贸易顺差同比下降以及不断出现的意外事件等八方面利空考虑。实际上,当时助我成功逃顶的头号功臣正是这看空股市的八点理由。

   二是果断出击。在逃顶的同时,还要抓住时机,果断出击。在2008年3月初至4月初的单边下跌市里,我一直空仓,可以说是毫发无损。但当大盘开始逼近 3000点大关时,其实当时也没有预料到政府会突然出台大幅降低印花税政策,我只是凭着多年来积累的看盘经验,在4月22日用剩余资金满仓买入一直喜欢的 股票达安基因,买入价12.80元,接下来便是享受市值一路膨胀的感觉,记得当时还曾后悔买得太少。

  由于判断当时的行情只是反弹, 因此到了5月6日,感觉大盘马上要有大的调整,上午一开盘便把达安基因卖掉,获利了结。没想到的是,5月7日大盘果然大跌150点以上但达安基因居然开盘 涨停,后来又连续大涨。虽然没能吃到最美味的一段鱼肉,但从大盘后面的走势来看,我这次逃顶还是正确的,所以并不后悔。加上之前在中材科技和片仔癀两只股 票之间滚动操作取得的收益,当年在指数暴跌的情况下,本人的市值再次刷新了历史纪录,年收益率35%,总资产超过41万元。




   【李兵】:也是两点:一是成功抄底,该出手时就出手。2008年11月,发现指数自见底1664点以来已拒绝调整,不再创新低,许多股票更是轮番上涨, 市场明显充满了生机。一看机会来了,我又把原先撤出的资金再次搬回股市,结果抄了个大底;二是抓小放大,弃弱择强。资金进去后,我先满仓买了獐子岛,18 元买入,34元卖出,获利后又建仓恩华药业,20元进,22元出。这两只股票的共同特点是盘子适中,股性活跃,非常适合散户操作。现在看来,当时的这一选 择也是明智的。假如当时不是抓小放大而是相反,结果也会相反只赚指数不赚钱。

  【评点】:散户要想取得超过大盘的收益,除了需要适时 抄底外,还要选对股票,否则极有可能赚了指数不赚钱,欢欢喜喜一场空。从连续多年沪深股市的表现看,给投资者带来良好回报的大多是那些盘子适中、股性活跃 的品种。当然,时机和节奏的把握非常关键。相比之下,那些超级大象由于股性相对较呆,投资获利的难度就大得多。



   【李兵】:的确有过不顺手的时候,也做过坏的打算。卖出恩华药业的时候感到该股还不能抵御市场风险,相比之下,感到中国重工抵御市场风险的可能性更大 些,尤其是在整个宏观经济存在变数的市场环境下。同时我发现,中国重工具有军工、次新、资产注入等题材,盘子不大,价格也适中,于是我在该股上市后不久卖 出恩华药业,并随即以7元多的价格全仓买入中国重工。但上市后,该股却连收5阴,不断下跌,直至6.44元才止住。在这种情况下,之所以能够坚持住,关键 是我对该股充满信心,而且有明确的目标位,同时还做好了最坏的思想准备,并不指望它立即上涨。但股市就是这样神奇,你越指望它涨它越是不涨,当你不指望它 涨的时候它却常常带给你意外惊喜。2010年,之所以能够取得七成收益,年底账户总值达到140万元以上,主要也是得益于中国重工的大幅上涨。实践表明, 既能充满信心,又做最坏打算是股市投资者必须拥有的良好心态。

  【评点】:炒股也是炒预期。在对具体品种的看法上,面对同一只股票, 往往有人充满信心、视作宝贝,有人不屑一顾、弃之恨之。这种现象在充满变数的资本市场本也正常,问题在于,有些投资者面对同一只股票,当它上涨时充满信 心、视作宝贝,等它下跌后又不屑一顾、弃之恨之,在这种心态主导下追涨杀跌就在所难免。所以,股票没有绝对的好坏之分,对任何股票都既要充满信心,又做最 坏打算,尤其是当股票出现下跌时更要充满信心,当它上涨后须做最坏打算。



   【李兵】:我认为,一个合格的投资者至少应具备以下四项基本素质:一是要会分析大盘,这是对投资者技术面要求非常高的素质要求。投资股票最关键的是要学 会趋势投资,在大势不好或方向不明的情况下进行个股投资显然是冒险行为;二是要会挑选个股,重点在于学会对个股基本面的研究和把握,尽可能选择成长性好的 上市公司进行长期投资;三是要会及时止损,要在综合考虑大盘和个股的具体情况后确定是否止损。一般来说,当个股运行到前期盘整区域的低点时就要及时止损, 当股价低于买入价的12%时也要止损。一个不合格的散户割肉大体都有这样四部曲:一开始觉得亏得厉害下不了手,亏损加大后内心的痛苦逐渐加深,麻木不仁后 放任亏损扩大,极度绝望后再一刀下去能剩多少就多少;四是要有良好的心态。投资股市的钱占家庭总资产的比例原则上要低于50%。当盈利达到一定程度后最好 撤出本金,只剩下盈利部分留在股市,千万不要把坏心情带给你的家人。上述四条我自己做得也不够好,就当和大家共勉吧。

  【评点】:会 分析大盘、会挑选个股、会及时止损、有良好心态,李兵总结出来的这些作为一名合格投资者应具备的素质看上去并不深奥,做起来也并不复杂,但却不是所有的投 资者都能做到、做好的。成功的投资者之所以能取得成功,起基础作用的其实也正是因为他们较好地具备了应有的素质。



   【李兵】:拥有合格投资者应具备的素质是成功投资者的共同特点,但不同的投资者还需要有一套适合自己的具体投资方法。我的投资方法是自己原创的不亏战 法,主要内容包括:一是顺势而为,这是绝大多数散户的弱项。二是要善抓热点。学会把握板块轮动节奏,善于观察和研究各分类指数和相关指数,且能辩证看待, 总结彼此之间的关系和规律,及时抓住其中的龙头品种。三是要研究公司。途径有很多,投资者可以从上市公司的路演资料着手,了解上市公司的基本资料,包括公 司发展规划、产品竞争力等。此外,可通过网络上的路演中心、证券交易分析软件、上市公司网站、有关部门发布的相关信息以及上市公司公告和财务报表等去具体 研究上市公司。四是要建立自己的交易系统和估值评价体系,要做到这一点很难很复杂。五是要把握主力思维模式,克服自身心理障碍。一个健康从容的投资心理同 样是战胜市场的必备条件。六是要掌握必要的技术分析方法,并善于思考和总结。以上6条归结成一句话,那就是:要想在股市投资中保持不亏,必须做到趋势投资 和价值投资的有机结合。


Econpile Holdings - Continued step-up in margins in 1Q BUY

- We maintain BUY on Econpile with an unchanged fair value of RM1.50/share – pegged at 14x FY16F PE.

- Econpile reported 1QFY16 earnings of RM14.5mil – up 52% from RM9.5mil a year earlier. This is on the back of a 5% fall in revenue.

- Earnings are in line – making up 25% of our full-year forecast and 27% of consensus’.

- Sequentially, earnings grew 4% on the back on a 3% dip in revenue. The lower revenue was due to certain projects being in their initial stages (which result in lower billings). These should pick up as the projects progress.

- As expected, Econpile’s margin continued its growth path due to improved efficiency, lower material costs and higher utilisation of machineries. Net margin expanded to 14.3% in 1Q from 9% a year earlier (and vs. 4Q15’s 13.5%).

- Econpile declared a dividend of 1 sen (1Q14: 1 sen). Econpile is expected to pay another dividend in 3Q (our total FY16F DPS assumption is 2.5 sen, which represents 2.4% yield). Econpile has a policy to pay out 20% of net profit as dividend. The ex and entitlement dates for the dividend are 11 and 15 Dec.

- Moving forward, earnings will continue to be supported by its outstanding order book of RM630mil (end-June: RM512mil).

- Just last week, Econpile had secured a RM95.5mil piling job for a mixed development in Month Kiara. YTD FY16F, it has already secured RM216mil (see Exhibit 5) – making up 68% of our replenishment expectation of RM320mil (FY15: RM490mil).

- We expect more wins given its tender book of ~RM1bil on the back of upcoming property and infrastructure jobs in the Klang Valley. Upcoming big-scale projects include Menara KL118, Bukit Bintang City Centre, TRX and Bandar Malaysia.

- Econpile is also seen as a possible beneficiary of piling jobs for the upcoming KVMRT2 and LRT2 given its experience in KVMRT1 (it secured piling jobs worth ~RM200mil).

- We maintain BUY. All in, Econpile continues to deliver both earnings and jobs wins. We like Econpile for its strong track record as a leading piling specialist, continued improvement in margins and sustainable contracts flow on healthy demand.
Source: AmeSecurities Research - 30 Nov 2015

Latitud: Best Ever Quarterly Result As Expected - Bursa Dummy

Monday, 30 November 2015 
Latitude Tree FY16Q1 Financial Result
Gross Profit35.629.427.534.426.2
MAS Rev34.026.431.232.127.7
VIET Rev176.4145.9125.8149.4141.0
VIET PBT18.918.414.422.614.8
THAI Rev5.
Total Equity479.4410.7390.1366.6327.2
Total Assets729.9594.3575.6548.6502.8
Trade Receivables79.849.363.363.459.9
Total Liabilities249.1182.4184.3181.0173.1
Trade Payables110.588.175.089.991.7
ST Borrowings105.376.990.482.674.8
LT Borrowings26.212.417.16.16.4
Net Cash Flow33.919.0-1.015.9-1.6
PPE purchase4.031.628.72.51.1
Dividend paid0.
Latitude just posted its record-breaking quarterly result in term of revenue, PBT and EPS.
Compared to immediate preceding quarter of FY15Q4, revenue in FY16Q1 increased by 21.3% to RM218mil thanks to stronger USD against MYR by 17%. The rest of the improvement was contributed by higher orders and higher production output.
PBT increased by 47.6% or M10.1mil QoQ and there was a forex gain of RM7.8mil in this quarter.
Geographical breakdown showed a significant jump in Malaysia's revenue and PBT margin.
Balance sheet and cash flow remain good as usual.
Earlier, Latitude has proposed a 12sen dividend for its FY15.
Though it is 40% higher compared to FY14's dividend of 8.5sen, it just represents 15% of dividend payout for FY15.
Does the management wish to keep more cash for imminent expansion, or just reluctant to share its profit with shareholders?
I can't say that its directors are stingy when they are getting salaries like this:
Normally one executive director in a small listed company can easily get paid RM1mil a year, but those 2 executive plus 4 non-executive directors of Latitude only get RM415,000 a year in total, not even enough to buy a double storey terrace house...
Regarding future expansion, Latitude plans to expand its upstream operation especially Kiln Dry and Saw Mill facilities to meet its raw materials requirement.
       Saw Mill

The newly acquired panel board lamination factory will provide new varieties of raw materials and allows Latitude to diversify into new industry & new products.
This new factory located in Klang was acquired in Jan15 for RM22mil and started commercial operation in May15.
Besides, Latitude has allocated RM35mil to upgrade or automate its existing production lines to improve production efficiency.
Latitude exports 99% of its furniture and 92% goes to US. It plans to explore other markets with high growth potential such as Australia, China, Russia, India and Indonesia.
However, it just dissolved its subsidiary in Indonesia in Oct14.
Today Latitude's share price closed at RM7.43, which is at an actual PE of 9.1x base on FY15 EPS of 82sen.
Will it produce a better financial result and give higher dividend in FY16?

There might be a chance. We can only wait and see.

POHUAT - Pop Huat~

Poh Huat Group had more than 30 years of manufacturing excellence. POHUAT is one of the most progressive furniture producers in South East Asia[1]. Having 3 subsidiaries (Poh Huat Furniture Industries (M), SB, PHW Properties SB, Poh Huat International SB) in Malaysia, 1 subsidiary (Poh Huat Furniture Industries Vietnam Joint Stock Company) in Vietnam, 1 subsidiary (Poh Huat International (BVI) Limited) in British Virdin Islands, 1 subsidiary (Contempro Furniture (Qingdao) Co. Ltd.) in China and 1 subsidiary (Poh Huat International Furniture S.A. (Proprietary) Limited) in South Africa, POHUAT's major activities are manufacturing, trading and sale of furniture and wooden household furniture[3].

POHUAT's Home and Office Furniture [1]
To highlight the most contributing subsidiaries, Poh Huat Furniture Industries (M) Sdn Bhd, mostly manufacturing office furniture, exporting to North US and Canada together with Poh Huat Furniture Industries Vietnam Joint Stock Company, mostly manufacturing home furniture with North US as their biggest market[3]. POHUAT's products are marketed under the brand name of AT Office System and AT Home System, with acceptance in more than 60 countries in 5 continents. With their current facilities, POHUAT strive to be a "Furniture One Stop Center", to cater the ever growing demand for customers to develop a furniture collection. Being involved in local organizations such as MTIB (Malayian Timber Industry Board), MITI (Ministry of International Trade and Industry), MFA (Muar Furniture Association) and MFIC( Malaysian Furniture Industry Council), POHUAT is closely working together with the associations and had gained global recognition and international standards.

The reason why i was attracted to POHUAT is because all the furniture exported stocks, LATITUDE, HEVEA and LIIHEN released a double digit net profit in November. So next, i look the furniture companies that will be announcing their results in December. If they are going to announce good results, at least i will see advance movement prior to the result being announced. So, POHUAT met my criteria by releasing the Q Result in December and i am even more excited when they are announcing Q4 Results. POHUAT is ranked number 4 in terms of market cap and the PE looks nice. So, lets study the fundamental of POHUAT.
Comparison among furniture peers

1) Fundamental Analysis:

Revenue and Net Profit
POHUAT is a net cash company with RM0.09 cash per share (the number of shares incresaed after i factor in the share split and bonus issue) whereby most of 75% of the trade receivables is transcacted in North America, hence, receiving USD during transaction. The other 25% are transacted in Malaysia, Asia, Europe and Africa. Revenue is maintaining there while net profit is increasing every year. The yellow bar is not complete as it is lacking of Q4 result. For the whole 2015, it just require another RM468k to break 2013's net profit, which is possible in this coming quarterly result which will be announced in December 2015.
Still remember our RM started to fall in August last year because of drop in crude oil. From 3.80, the USD/RM had spiked to the highest 4.48 on 29 September 2015. Currently closing at 4.26 as of date of writing the blog (6.07pm 29 November 2015)[4]. In the weekly chart, it seems like forming a double top. In terms of ideal technical analysis, after a double top, the price will fall down. So hopefully our RM will be strengthened even though there are a lot of factors we need to consider, such as crude oil price, Malaysia political issues, US FED increase interest rate.

POHUAT's net profit margin is not as exciting as its peers. I had calculated quarterly net profit margin (Refer to table in the left). The cells highlighted in yellow is basically where the month of August falls to. As we can notice, after the yellow cells, the net profit margin for each quarter increases, except for POHUAT, which is not so significant. But if we compare the same quarters for 2014 and 2015, POHUAT definitely surfaces out the increment. And same goes to other peers. From here, we can note that the effect the foreign exchange gain from the quarterly net profit margin.
From the Annual Report 2014, Datuk Seri Zulkipli bin Mat Noor mentioned US was still their main market. As US is getting stronger, their business will be better also.  He also mentioned that shipment to North America was strong with sustained orders for home furniture for Vietnam factories and increase in orders for office furniture from Malaysian factories. Shipping of office furniture was strong to Canada. From here, we can note that the factories in Vietnam is manufacturing home furniture while the Malaysia factory is manufacturing office furniture
The demand of home furniture is higher in North America while the demand of office furniture is higher at Canada. Mr Chairman also did mentioned something about the US economy. US economy is now recovering, and the demand for furniture is higher. When we look at the statistics conducted by Furniture Today. The article was published on 17 October 2015. Furniture imports to the US market grew 10% in the first half, an increase that was largely fueled by double-digit increases out of Vietnam, India and China. The overseas shipments from January through June grew to $11.8 billion, up frm $10.7 billion in the first half of 2014[5]. As US Federal Reserves announce the employment rate every month, the employment rate is increasing (sorry as i cannot find the source). Let's imagine, if a family had more money, the first thing normally that they will buy is the furniture to equip the house. Furniture is a symbol of wealth and comfort in most family opinion.
And i ran into Zeff Tan's blog in i3 investor[2] (Credit to Zeff for the wonderful findings, you can read his research in Zeff showed some historical data of POHUAT's results, stressing out 2013 Q3 net profit was lower due to bad debts and 2014 Q3 was due to Vietnamese riot. A point to note is in Q4 2013, US home sales is 5.356 mil with forex of 3.207, POHUAT's net profit is RM10.583 mil; in Q4 2014, US home sales is 5.123 mil with forex of 3.36, POHUAT's net profit is RM11.049 mil; coming to Q4 2015, US home sales is 5.476 mil with forex of 4.3, how much will POHUAT's net profit be? Once again thanks to Zeff for his findings (i only share his findings, not plagiarism, i also quote the source. Thanks Zeff, if you are reading this post)
Bursa Announcement on the Fire Incident [6] [7]
POHUAT's in Vietnam, Po Huat Furniture Industries Vietnam Joint Stock Comopany (Poh Huat Vietnam) had a fire incident on 23 August 2015[6][7]. The fire resulted in damages to 2 contiguous factory blocks housing a finishing line and a finished goods warehouse measuring approximately 10,530m2. The total damages are estimated at USD2.4 million equivalent to RM10.32 mil (USD431k for damaged buildings, USD284k for machineries and USD1,654k for inventories). POHUAT's factories in Dong Nai was decided by the POHUAT management to mitigate the production and affected facilities. POHUAT plans to increase production hours from a single shift of 12 hours to two 10-hour shifts to replenish the lost shipments. The insurance proceeds, upon receipt, will be utilised to set-off the relevant reconstruction and repair costs and assets impairment charges arising from the damaged fixed assets and stocks. The action taken by the POHUAT management is right on the spot to solve the production issues and to assure what will the insurance be used for. In short, despite the fire, which will impact the financials in the near-term, but the fundamental of POHUAT is still good. 
POHUAT recently had a 1-to-2 share split and a 1-for-4 bonus issue of warrants. The share split had subdivide every 1 ordinary share of RM1 to 2 shares of 50 sen each. Despite the fire incident, the strengthening USD and the US Furniture demand is getting higher, i am quite positive that this Quarter's result will be delivering because it only required another RM468 to break the 2013's net profit.

2. Technical Analysis

POHUAT had been in an uptrend. Even though after the ex date on 16 October, it is still continue to break new high. The price before 16 October was adjusted, so therefore, my support and resistance are drawn after the ex date. There was a golden triangle breakout on 18 November 2015 followed by a gap up on 19 November 2015. The high volumes also indicated the stock is now under attention. The directors were buying from 1.52 to 1.70 for the whole November. The number of shares that they bought are 280k shares.

After the fire incident, there is a gap down on the share price, but after 11 days or after POHUAT clarified the fire incident on 1 September 2015 in Bursa website, the share price continues to be in bullish position. Even after the ex date, the share price was pushed up even a lot of people take profit on that day. We can notice it by the long tail on the ex date. Currently the MACD is bullish, the chart seems to be bullish even though the market sentiment is in "profit taking mode" last week. I had drawn a support at 1.61 and the next resistance is at 1.78. From what i observe, there is an advance movement as the Quarterly Result will be announced in December 2015.


POHUAT is definitely a stock to watch in these uncertain market condition. Window dressing might be happening during December when we observe the data from previous years. So, it will be better if we can grab stocks that might be performing due to RM weakening so that we can have the cushion of foreign exchange gain. You can have a look at my previous post on window dressings by clicking here
- Riding the wind of exporting strengthening USD with 75% of trade receivables from North America
- Q4 result will be announced in December 2015. Only require RM468k to break 2013's whole year net profit. Currently seems like advance movement due to good result.
- Had a fire incident and incur loss around USD 2.4 million but management is quick to have mitigation plans to cater for the production losses and even justify on the plans after they obtain the insurance claim.
- Net cash company with net cash per share of 0.09 net cash per share.
- Had a golden triangle breakout followed by a gap up on the next day, currently in uptrend with resistance at 1.78 and support at 1.61. The resistance should be easily broken .
- Directors collecting 280k shares from 1.52 to 1.70 during November.
- Share price is picking up attentions in the market despite "profit taking mode" last week.
- Respect the cut loss point very much during these volatile week with anticipated window dressing activities.
POHUAT, let's Pop and Huat~

Gainvestor short term TP: 2.00
Gainvestor long term TP: 3.00
Let's Ride the Wind and Gainvest
Gainvestor 10sai
29 November 2015
[2]: Zeff Tan's blog:
[3]: Annual Report 2014

EG Industries Berhad: Worth for me to invest ?

EG Industries Berhad is an investment holding company. The Company operates through its subsidiaries, which include SMT Technologies Sdn. Bhd., which is engaged in the provision of electronic manufacturing services for computer peripherals, telecommunication and consumer electronic/electrical products industries; Mastimber Industries Sdn. Bhd., which is engaged in the manufacture and sale of two layer solid wood parquet flooring; EG Wireless Sdn. Bhd., which is an original equipment manufacturer/original design manufacturer (OEM/ODM) in complete box built products, and SMT Industries Co., Ltd., which is engaged in the provision of electronic manufacturing services (EMS) for computer peripherals, telecommunication and consumer electronic/electrical, and automotive industrial products industries. It has operations in Malaysia, Singapore, Europe, the United States, Korea and Thailand. (Background from klseinvestor)

At a glance EG Industries in FY2015 recorded, record profits at MYR26.35m and EPS at 35.39sen. At current price level 0.825sen, P/E at mere 2.33x, superb earnings. However the reality was around MYR15.5m of the income were derived from realising their investments (quoted shares) which were a non-recurring income. The gain from disposing their investment translate to around 20.50sen per share.

Taking into account only income from operations at around MYR10.86m, the EPS were at 14.89sen while the P/E at 5.5x, extremely undervalued if compared to s90imilar companies. It is likely EG Industries is not attractive due to its thin gross profit margin at less than 6% and Return on sales (ROS) at mere 2%.

On a more positive note its gross profit margin had been steadily improving and it is likely continue in next few financial years. Gross profit margin in 2015 – 5.3%, 2014 – 4.5%, 2013 – 2.9%. Meanwhile its last 2 quarters gross profit margin has been inching up gradually 2015 Q4 – 6.1%, 2015 Q3 – 4.9%.

On its balance sheet, EG is slightly short on its liquidity evident in the following ratios

· Current Ratio = 0.98x (Quick = 0.70x)

· Non Current Asset to Networth = 1.21x

· Fixed asset to Networth = 1.03x

· Debt Ratio = 0.71x

· Interest bearing borrowings = RM205.7m

While EG Industries liquidity is on the tight side, on more optimistic side, its cash amounts to RM47.5m (account for 10.8% of total assets). Recent rights issue completed in Oct 2015 have added another RM57.8m (net fees) and recently approved private placement of 19.2m shares at RM0.80 would add another RM15.36m which would increase its net cash level to RM120.66m. After the rights networth would have added by around MYR60m to its equity at RM133.7m reported in 30th June 2015 result.

NTA after rights issued in Oct 2015 = 98sen (exclude warrant), currently the it is trading at 0.825

To summarize EG Industries financial performance had been mediocre for the last 5 years and unlikely to register material improvement in the remaining 2015 ie. Jun – Dec 2015 (Q1 & Q2 of FY2016). In Q1 2016, (3 Mths ended Sep 2015) EG likely will register at least RM4m to 5m net profit base on its Q3 and Q4 of FY2015 performance and net income would be slightly bump up by RM770K from the land sales which was expected to be completed in July 2015.


However despite its mediocre performance, exciting times are ahead of EG Industries and will certainly improve its profitability materially. In mid 2014, EG Industries had embark on restructuring to improve expand its customer network and its products solution. EG Industries aspires to be a one stop solution for EMS and OEM.

To better comprehend the next section here are some chronological event

· On 11th July 2014, Jubilee Industries a subsidiary of WE Holdings Pte Ltd (listed in Singapore Catalist Board) bought 19.5m shares (26% at the point of time) of EG Industries @ RM1.00

· On 18th July 2014, Terence Tea appointed as EG Industries Berhad’s Executive Chairman

· Terence Tea is also WE Holdings’ Executive Chairman and CEO, Jubilee Industries’ CEO and major shareholder of Singyasin Holdings Pte Ltd

· On 2th Feb 2015, Jubilee Industries acquired WE Component from WE Holdings

· On 21st April 2015, EG Industries proposed to buy 95.81% stake in Singyasin Holding for RM10.3m.

· On 15th May 2015, EG Industries bought 10.22% of WE Holdings for SGD2.035m (RM5.550m)

· On 15th June 2015, Jubilee Industries increased its stake in EG Industries to 24.97m shares (estimated 13.002%)

· On 4th November Terence Tea increase its stake in EG Industries to 10m shares (5.254%)

Jubilee Industries are in similar business segment while Singyasin operate in a different segment of the value chain which will complement EG industries business.

The key to EG Industries transformation lies in the appointment of Terence Tea as Executive Chairman. It cannot be a coincident that Terence Tea was appointed as EG Industries Executive Chairman in July 2014, who also is the Executive Chairman and CEO of WE Holdings and CEO of Jubilee Industries. Furthermore as of todate, Terence Tea currently owns 5.254% of EG Industries shares.

M&A with Jubilee Industries will move EG Industries into the direction of one-stop electronics solutions provider for its customers and will achieve a greater cost savings, operational efficiency and more competitive pricing in the market as well as greater bargaining power with suppliers and expanding product portfolio to customers.


In Q4 of 2015, EG Industries reported its gross profit margin increased to 6.1% and net profits before tax from EMS segment was at RM11m

EG Industries gross profit margin will continue to improve as the group is focusing in more high end products.

Synergies with Jubilee Industries have yet to be fully unlocked and once unlocked will contribute further to its gross profit margin. More synergies expected after acquisition of Singyasin Holding Pte Ltd.

2 year contracts with Tramigo worth USD50m will likely start to contribute to EG Industries earnings in Q3 2016 onwards (i.e. in Jan 2016 onwards) and each quarter will add USD6.25m @ USD/MYR 4.20 =RM26.25m revenue to its operations.

Tramigo contract will increase EG Industries revenue by

· FY2016 = RM52.5m (Q3 & Q4 2016)

· FY2017 = RM105m (Q1 to Q4 2016)

Sales of 3 parcels of land in Kedah for RM4.5m which will be completed in July 2015 will bump up EG Industries non-recurring income by RM770k in Q1 of 2016.

Recent rights issue and recently approved private placement provides EG industries additional funds for investments/expansions as well as reduction to its interest bearing borrowings which are expected to contribute further to its bottomline.

There was a plan hatched in 2014, to expand SMT activities

Taking into consideration of

1. Q3 and Q4 revenue and gross profit margin

2. Improving gross profit margin due to synergies and moving towards better margin products.

3. Tramigo contract contributing to EG Industries income in Q3 and Q4 of FY2016

The forecasted revenue in FY2016 would be at least in the region of RM700m – RM750m while its profit before tax would be above RM16m to RM20m. For FY2016 EPS should be in the region of 8.3sen – 10.4sen.

The forecasted number does not include the full potential synergies from Jubilee Industries and WE Holdings. If EG Industries can unlock and capitalize on the synergies earlier than expected in FY2016, expect further upside in its revenue and profitability.

EG Industries excitement lies in 2016 and beyond, with flurry of joint venture/M&A activities with Jubilee Industries, WE Holdings and Singyasin Holdings to improve its gross margin and customer network, expectation to unlock the synergies between 4 companies are high. In medium term, EG Industries revenue, gross profit margin and net income are expected to increase accordingly.

Base on 192million shares and expectation EG Industries increase in revenue and profitability here are the expected price level if the following profitability is achieve.


· No new shares issued after private placement of 19.2m shares

· Revenue grow by 10% (included Tramigo 2 yr contract generating RM52.5m and RM105m in FY2016 and FY2017 respectively.

· Gross profit margin grow at 0.8% per annum

· SGA rise in tandem with sales revenue

· Interest bearing borrowings reduced by RM17m from RM205m reported in FY2015 averaging 5% per annum

*Note below 2015 excluded the non-recurring gain of RM15.5m from sales of quoted share and using the enlarged issued shares for comparison.

Happy investing and I would like to take oppotunity to said thank you to my partner(KH WONG) who spend valueble time to do research and share with us,


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The Mother of All Investing Mistakes by Vishal Khandelwal

What would you do if you had something coming at you at 110 km an hour and less than half a second to react?

Soccer goalkeepers saving penalty kicks face this situation often. While watching penalty kicks looks like a lot of fun for the audience, it’s often a tricky situation for the person facing the penalty i.e., the goalkeeper. He has to make a decision in less than a second and that too a decision on which the balance of his team’s fortunes hangs.

Penalty kicks are a great way to understand one of the biggest mistakes investors make. More on that later, but first let’s talk about the options in front of the goalkeeper saving the kick.

He has three choices available – He can dive left, dive right, or stays put.

As per research on penalty kicks, the players taking the kicks shoot one-third of the time at the middle of the goal, one-third of the time at the left, and one-third of the time at the right. Goalkeepers and their coaches surely know of this these days.

But what do most goalkeepers do?

Roughly 95% of the time, they dive left or right. And why?

Top goalkeepers said it just feels like they are at least making an effort when they dive. They feel like they’re being lazy if they just stay in the centre. It feels right to just do something, to make an effort. And it feels wrong to make the least effort i.e., stay put at the centre.

Staying put at the centre is surely the right thing to do, at least this is what research suggests. When the kick is to the centre, goalkeepers stop it about 60% of the time. When the kick is to the left, and the keeper dives left, his success rate falls to just below 30%. And when the kick if to the right, and the keeper dives to his right, his success rate is even worse at about 25%.

Now before you blame the goalkeepers for their foolishness despite knowing what works (as per probabilities) and what doesn’t, see the big mistake you may have made often in the past (and probably continue to make) as far as your stock investing is concerned.

That mistake is your bias towards action i.e., doing something. Anshul has written about this in his latticework of mental models series in August, but I thought this is worth reiterating given that I see a lot of people around trying to second guess the movement of Mr. Market and trying to be in the thick of action all the time.

Contrast this with a Warren Buffett quote I’ve come to agree with over the years –

Lethargy bordering on sloth remains the cornerstone of our investment style.

Or how Charlie Munger sums up his approach to investing –

We’ve got…discipline in avoiding just doing any damn thing just because you can’t stand inactivity.

Or the cause Blaise Pascal found for our biggest problems –

All of humanity’s problems stem from man’s inability to sit quietly in a room alone.

Being overactive as a goalkeeper or an investor is clearly crazy. Often staying put – not doing anything and instead sticking with your chosen investment process and high quality stocks – is the right thing to do.