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Thursday, January 28, 2021

说给30万股市新人听(上)/冷眼

2021年01月27日

他们既然都是现在才开新户头,可见其中大部分没有经验,甚至没有认识,但是,这不碍事,如果等到有认识,有经验才进行投资的话,他们永远都没有勇气踏进股市,这就是何以8000亿令吉的定期存款者,迟迟不敢进入股市的原因。

我可以告诉这30万股市新人:没认识,没经验不要紧,只要你肯学习,认真学习,自然认识和经验就有了,我在50年前进股市时,对股票和股市根本没有认识,也根本没有经验,但在进入股市之后,我很努力进修,一面投资,一面进修——很勤奋的进修,慢慢就有了认识,有了经验,这样持续不断的边打边学,慢慢的一步一步向上爬,到了今天,我可以说我有足够的认识和经验来应付任何的股市风暴。

50年千山我独行

我把我学习股票的经过,花了一年多的时间,写成一本书,叫《千山我独行》,现在正在排版中,预料农历新年前后就可以跟大家见面。这本厚达400页的所谓“冷眼的故事”,是记载了我50年学习及投资股票的心路历程,有兴趣的人可以买一本来读,可以帮助你们减少学习股票的错误,节省学习的时间和减少因错误而付出的代价。

我不认为这30万股市新人都是投机者,他们之中,其实有许多受过高等教育,都是知识分子。这是非常有利的投资条件,如果在进入股市之后,努力学习,就一定能成功。

我国现存的500所私立大学和学院,是在上世纪七十年代才出现的,在六十年代末期,当我开始学习股票时,只有一所马来亚大学,在本国,当时读大学的机会少之又少,现在不同了,只要肯学习,几乎都有读大学的机会。

教育水平比六十代高了几倍,我相信这30万股市生力军中,大部分都受过中高等教育,都有阅读股市和股票的能力,只要认真学习一定能学懂,一定能做好投资工作,成功的机会很高,切勿错过。

我在去年7月1日出版了一本叫《决战股市终极方案》,是我50年股票投资经验的总结,根据这个方案投资,肯定可以做到胜多败少,达到财务自由 。

认真学习是不二法门

这本书面世后,受到股友的热捧,一连25次进入《亚洲周刊》的大马华文畅销书排行榜,其中18次高居榜首,5次排名第二,一次排名第五,一次排名第六,在短短的6个月中销出近2万本,在行动管控令期间有这样的表现,令我欣慰。这是一本严肃的书,没有兴趣投资股票的人不会去买,买拙作的都是想认真学习股票投资的人,而这批人中,相信大部分是来自30万股市新人。可见想认真学好股票投资的人还真不少。

我要给这30万新人信心,只要你们肯认真学习,你们一定能投资成功,因为我就是这样走过来的。我就是这样起来的。如果我能从一无所有,达到财务自由,你们也一定能够做到,我给你们信心。

我国有1500万的受薪者,多数是中低阶收入者,在应付了日益沉重的家庭生活费之后,能够储蓄的数目已寥寥无几,由于这有限的储蓄得来不易,所以特别珍惜,不敢贸然投资,以免亏蚀后陷困。

少了基本面10赌7输(下)/冷眼

2021年01月28日

股市是一个风险较高的投资管道,一般人不敢轻易冒进,是可以理解的,因为我27、28岁初进股市时的心态也是如此,这就是股票交易所在前年发动“投资大马股市”的全民投资运动时,反应不符理想的原因。那时交易所发现银行有8000亿令吉的定期存款,存款者就是按兵不动,交易所也无计可施。

这8000亿令吉的存款人,多数是受薪者,缺乏理财观念,不敢投资,他们其实是在给富人做慈善,因为银行把这8000亿令吉借给富人投资,收取更高的利息,而富人则取得更高的回报,所以定存者是在做慈善,而受益的是银行和富人,他们本身只得到不足2%的回报。银行降利息,主要受益者是企业,并非存款人。

存款人将1000令吉放进银行作定期存款,以目前1点多巴仙的利率,这1000令吉存款,要经过30年才能收回2000令吉,试问受薪者,有多少个可以赚取薪水的30年?难怪大部分受薪者,退休后都要靠儿女养老,万一儿女不孝顺,或是跟长辈不咬弦,这些人的晚年就很凄凉。

受薪者必须学投资

所以,受薪者一定要学习投资,追求比定期存款利率高数倍的回报,才能加速财富的增长,在退休之前,拥有较厚实的财力,这样才能过有尊严的晚年(请参考拙作《股票投资正道》中《度晚年有尊严》一文)。

然而,适合受薪者的投资管道有限。主要管道为产业和股票,如今这30万新人进入股市,我肯定他们做了有智慧的选择。

产业肯定也是很好的投资管道,但那是另一个课题,这里且不谈,只谈股票,因为这是我熟悉的。

这30万股市新人,相信大部分在这一轮的股市赚到钱,这是可喜的事,因为没有初期的成功以及快速得利,无论你怎样劝说,他们都无动于衷,不肯投资股票,错过了股市这一条投资管道,所以,让他们一进入股市就获利,他们才有一个好的开始,所以,我认为30万大军涌入股市,是好事,绝对是好事。

但是,我要在这里给新人恳切的忠告,也许这忠告并不中听,但如果我不提醒这些新人,我就有失作为股票研究人的责任。

获利保利再冷静学习

股市菜鸟不要被胜利冲昏了头脑,对股票投资存有不实际的观念,以为股市是快速致富的捷径,正如股市研究泰斗本杰明·葛拉罕所说的,股市短期是投机,由情绪决定成败,长期来说,股市是天平,由轻重决定胜负。在股市50年,我可以肯定,这是很好的比喻,我在《决战股市终极方案》有详细解读,这里不再赘述。

我给30股市新人的劝告是:

1)请珍惜你们已取得的盈利,如果你们能保住这些盈利,你们就有机会再上一层楼,为你们的人生打下坚实的财务基础,人生就不一样了。

2)要乘胜追击,利用目前的基础,巩固你的财务实力,然后更上一层楼。

3)要做到“更上一层楼”,就一定要放弃轻敌的心态,要切实下功夫做功课,如果你只懂得一路向前冲,不肯冷静下来思考,又不肯做好功课的话,尽早会前功尽弃,打回原形,那真的是太可惜了,人生的机会不多,你们现在取得的突破,真的是很难得,一定要设法保住,在得而复失时才来痛心疾首,那就太可惜了。我真的很希望你们遵守《终极方案》投资,尽可能避险,致力避险。因为《终极方案》分为两部分,第一部分是如何创富,第二部分是如何“保富”。

4)目前的股市是一个非常特殊的股市,在这样的股市中赚钱,而且赚大钱的人,其实已具备投资成功所需的特质:一、反应敏捷,目光如炬;二、有知识;三、有胆色,——过人的胆色,敢于冒险;四、还要有点运气。

这是短期成功的要素,但要长期成功,单有这些特质是不够的,短期的胜利,不一定能保证长期的胜利,要在股市中长胜(不是百战百胜,而是胜多败少),就一定要做到两点:一、持续不断的做功课,思考,减少错误;二、要努力的淬炼你的内在修养。我在我所写的书中已不断重复,已很噜嗦了,这里不想再多说。

不做功课不如买产业

如果你不肯做功课,总是靠听传言、谣言投机,我希望你们把赚到的钱,趁目前低迷产业市场,买一间房屋供你的家人居住,这样就真的保住你的盈利了。

请记住,长期在股市中冲刺,不做基本面功夫的投资者,在10个人当中,有7个亏本,2个打平手,1个赚钱。请你询问你的股票经纪,在他众多顾客中,长期来说,有多少个赚到钱,你就会相信这7:2:1的说法是真实的。

https://www.enanyang.my/财经新闻/少了基本面10赌7输(下)冷眼-0

Wednesday, January 20, 2021

Riverstone - Valuations Turning Attractive; Upgrade to BUY

Upgrade Riverstone (SGX:AP4) to BUY as valuation becomes attractive again after share price correction on vaccine news.

  • Firm ASP and demand trend in FY21F; order visibility extends till December 2021.
  • Mass availability of vaccines will take time; new COVID-19 strain raises risk.
  • Riverstone's FY20F/21F/22F earnings forecast adjusted by -16%/+19%/+4% on revision to ASP assumptions.

Riverstone's Valuations Turning More Attractive

Current Riverstone P/E at -1SD of its 5-year average.

  • We had downgraded Riverstone to HOLD in November 2020 (Riverstone - DBS Research 2020-11-10: Time To Take A Breather) when Riverstone's share price was near S$2. Since then Riverstone's share price has corrected by close to 50%.
  • At current level, P/E valuation for Riverstone is becoming more attractive, trading at 7.3x FY21F earnings, which is near -1SD of its 5-year P/E average.

Bumper dividend expected from Riverstone.

  • Riverstone could declare a bumper dividend on the back of exceptionally high profits driven by strong demand and high ASP in year 2020. Dividend per share could more than double to 5 cents in FY20F, based on 40% payout ratio, as compared to 2.42 cents in FY19.

Firm ASP and Demand Trend; Order Visibility Extends Till December 2021

  • ASP and demand trend have been firm despite the positive developments on the vaccines for COVID-19. The ASP for both healthcare (HC) and cleanroom (CR) gloves has increased by about 10% m-o-m on average since April 2020. The increase in November and December was even steeper at about 15% m-o-m. For January and February 2021, the increase in ASP is about 5% to 10%, based on our channel checks.
  • Going forward, ASP could remain firm, barring any steep increase in raw material prices, as demand is still expected to be strong.
  • Riverstone’s order visibility has further extended to till December 2021, from our last update in November of till June 2021. Prices for HC gloves are negotiated monthly, hence prices are not fixed. For CR, prices are now negotiated every two months or quarterly, vs every six months to a year before the pandemic.

Mass Availability of Vaccines Will Take Time; New COVID-19 Strain Raises Risk

Positive vaccines development negative for “COVID beneficiaries”.

  • The world has cheered the positive vaccines development over the last few months. In contrast, share prices of “COVID beneficiaries” like Riverstone were hammered. Riverstone's share price plummeted from a high of S$2.45 in August 2020 to a low at close to S$1 in December.

Low vaccine acceptance rates; new COVID-19 strain raises risk.

  • While the availability of COVID-19 vaccines is good news, it would still take time for life to return to near normal. Low vaccine acceptance rates or distribution delays due to production or logistical difficulties could delay the return to normalcy. Vaccine acceptance appears significantly lower in the US with only ~47% of people surveyed by the Associated Press planning to get the vaccine and 27% being unsure.
  • The emergence of a new COVID-19 strain in the UK that is “70% more transmittable” also raises the risk of a resurgence in COVID-19 community transmission. Several countries have imposed new lockdown measures arising from the surge in in new COVID virus cases and virus mutation.

Sustainable glove demand post-COVID with hygiene still a key concern.

  • Hence, the demand for gloves is expected to sustain as hygiene will still be a key concern. Even if a COVID-19 vaccine is developed, we do not expect demand to taper off immediately.

Beyond FY21F, cleanroom to provide earnings resiliency for sustainable growth.

  • Riverstone’s CR gloves segment contributes ~25% to 30% to total revenue and ~50% to gross profit. Even if demand for the more volatile HC gloves tapers off, demand for CR gloves should be more stable. The CR glove segment has also experienced growth in demand from the technology and manufacturing industries such as lenses, batteries and semiconductors.
  • As the market leader in the high-end CR glove space, Riverstone is poised to benefit from the diversified income streams which allow the group to ensure earnings resiliency for sustainable growth over the longer term.

Riverstone - Earnings Forecast & Recommendation

Expect ASP in FY21F to rise by an average of 35% y-o-y, vs our flat assumption previously.

  • We have adjusted our ASP assumptions, expecting ASP for both HC and CR in FY20F to increase at an average of 60% y-o-y, vs our previous assumption of +70%.
  • For FY21F, given that demand is still expected to be strong while supply remains tight, and the ASP for January and February are still on a rising trend, we now project ASP to increase 35% y-o-y, vs our previous flat assumption.
  • For FY23F, ASP could decline by 35% y-o-y.

-16%/+19%/+4% earnings forecast adjustment for Riverstone in FY20F/FY21F/FY22F.

  • On the back of the ASP adjustment, coupled with slightly lower margins on higher raw materials, we have adjusted our Riverstone's earnings forecast for FY20F/FY21F/FY22F by - 16%/+19%/+4%.
  • Our target price for Riverstone is still pegged to 12.8x, the average P/E over the last 5 years, in line with our valuation methodology for peers in our coverage. However, we have rolled forward our valuation base to blended FY21F/FY22F earnings to capture the post COVID-19 impact. As such, our new lowered target price offers potential upside of 37%.
  • In terms of share price performance, Riverstone's share price has moved in tandem with peers Hartalega and Kossan Rubber but underperformed Top Glove's share price, Supermax and UG Healthcare's share price.
  • Upgrade Riverstone to BUY.

Source: DBS Research - 11 Jan 2021

Fortress Minerals Ltd. – Ore Production Almost Doubled This Quarter


3Q21 results were better than expectations. Revenue was up 150.9% YoY, PATMI up 477.9% YoY. 9M21 PATMI formed 77.5% of our FY21e forecast.

3Q21 sales volume increased a stellar 93.8% YoY on the back of increased domestic demand for steel.
Maintain BUY with a higher TP of S$0.47, up from S$0.28. We raise FY21e PATMI by 69.2% to capture its 3Q outperformance. Our TP remains pegged to 11x FY21e, the industry average. Catalysts are expected from a 50% jump in production in FY21e and iron ore prices (Platts Iron Ore Index, IODEX 65% Fe CFR North China) remaining above US$110/DMT. The company announced a proposed US$30mn acquisition of Malaysia iron ore and copper producer.





The Positives

+ Continued volume growth. Iron ore concentrate volumes sold increased 93.7% YoY in 3Q21. This translated to revenue growth of 150.9% YoY. Volume and revenue were both lower QoQ due to monsoon disruptions to production that typically occur at year-end.

+ Spike in margins. Gross margins increased from 57.7% to 75.1% in 3Q21. Revenue for the quarter more than doubled, driven by higher prices for high-grade iron ore concentrates. Their ASP was a record US$110.06/DMT as iron ore prices reached a 7-year high. Average unit cost was also lower YoY through increased iron ore production.

+ Operating cash flow increased 7x. 3Q21 operating cash flow of US$11.7mn was 7x the US$1.6mn achieved a year ago. Net cash slightly dipped from US$9.9mn to US$9mn while FCF turned around from -US$328k in 3Q20 to US$10.4mn in 3Q21.

The Negative

– Nil.

Proposed acquisition of Malaysian subsidiary of Monument Mining Ltd

Monument Mining Ltd (MMY CN, Not Rated) is an established Canadian gold producer that operates gold mines. It also acquires, explores and develops other base metals. FML has entered into a conditional sale and purchase (SPA) agreement with the company for the acquisition of the entire Monument Mengapur (MMSB). MMSB owns a 100% stake in the Mengapur copper and iron project in Pahang, Malaysia. Cash consideration is US$30mn. FML will pay a royalty fee of 1.25% of gross revenue from all products produced at Mengapur to Monument Mining.

Other than magnetite, Mengapur contains a significant amount of copper, gold and silver resources. FML will mine only magnetite for the production of its iron ores. Ores containing other materials encountered during mining will be stockpiled for future use.

With this acquisition, FML’s magnetite resources will surge from 7.18mn tonnes from its Bukit Besi mine as of February 2020 to 17.93mn tonnes. Geochemical analysis and metallurgical tests have proven that the Mengapur magnetite is extremely similar to that from the Bukit Besi mine, which has demonstrated to be economical. FML’s Buki Besi mine has been able to yield consistently-high-grade magnetite iron ore concentrates.

Mengapur is strategically located 65km away from the Kuantan port, the main bulk iron ore export port on Malaysia’s East Coast. It is also within close proximity of the two largest steel mills in Malaysia, both of which are FML’s customers.

Mining leases and environmental approvals for open-pit mining have been obtained. With its existing processing plants and other facilities, the Mengapur site is ready for development. It is immediately available for magnetite production after refurbishment.

This is the company’s first proposed acquisition. If executed according to plan, it should help transform FML into a regional player in iron ores, coupled with its efforts to explore and develop iron ore assets across Malaysia. Mengapur should also complement FML’s existing portfolio of advanced iron ore projects.

Outlook

Iron ore prices are expected to taper down in 2021 as supply balances out demand. We expect them to drop from the current US$190/DMT (Platts IODEX 65% Fe CFR North China) to the region of US$110/DMT. This would translate to lower ASPs of US$95/DMT for FML, from US$110.06/DMT in 3Q21. However, FML’s revenue should still increase with higher iron ore volumes sold following its announcement of an offtake agreement in September 2020. Operating expenses are also expected to be stable with the help of improved economies of scale.

Maintain BUY with higher TP of S$0.47 from S$0.28

We maintain BUY with a higher TP of S$0.47, up from S$0.28, after we increase FY21e PATMI by 69.2% to factor in its 3Q21 outperformance. We continue to peg the stock at 11x FY21e PE, the industry average. We expect production to jump 50% in FY21e and iron ore prices (Platts Iron Ore Index, IODEX 65% Fe CFR North China) to remain above US$110/DMT, providing stock catalysts.

Source: Phillip Capital Research - 18 Jan 2021

Tuesday, January 19, 2021

汤之上隆最新预测:2050年全球半导体市场将超万亿美元


芯东西 芯东西头条2021/01/19


芯东西(公众号:aichip001)
作者 | 汤之上隆
编辑 | Panken

编者注:本文作者汤之上隆先生为日本精密加工研究所所长,曾长期在日本制造业的生产第一线从事半导体研发工作,2000年获得京都大学工学博士学位,之后一直从事和半导体行业有关的教学、研究、顾问及新闻工作者等工作,曾撰写《日本“半导体”的失败》、《“电机、半导体”溃败的教训》、《失去的制造业:日本制造业的败北》等著作。

本文是汤之上隆先生近日发表于eetimes.jp上的一篇长文,不仅对十年前全球半导体市场增长预测的数据进行复盘和分析,而且提出新的计算方法,预测到2050年,全球半导体市场规模有望突破万亿美元大关。

全文内容如下:

2020年是被新冠肺炎疫情折磨的一年,汤之上隆希望今年是新冠病毒威胁消失、充满希望的一年……然而这样的想法还没过多久,1月7日,日本首都圈的一都三县就发布了紧急事态宣言,从年初开始就大跌眼镜,令人担心今后。

但在遭受疫情冲击的情况下,全球半导体市场和制造设备市场都持续增长。

受存储半导体产业衰退影响,2019年全球半导体市场规模降至4123亿美元,好在2020年受新冠病毒影响甚微,又恢复至4331亿美元,并有望在2021年创下历史最高纪录,达到4694亿美元,超过2018年存储半导体泡沫时期的4688亿美元。

此外,据国际半导体产业协会(SEMI)在2020年12月10日公布的资料显示,2020年全球半导体制造设备市场规模较2019年的596亿美元增加了16%,创下689亿美元新纪录,预计2021年将达到719亿美元,2022年将达到761亿美元。这大大超出了汤之上隆此前的预期。

▲图1:半导体制造设备市场变化(来源:汤之上隆根据Gartner和WSTS数据绘制)
一、全球半导体市场增长预测:2050年将破万亿大关

虽然在全球范围内,新冠病毒疫情更加严重,但正如前面所述,全球半导体产业的发展势头非常好,对于相关人员来说,这是“不幸中的万幸”。

因此,作为2021年的第一篇文章,汤之上隆想要预测到2050年,全球半导体市场将增长多少。

另外,之所以将时间设定在2050年,是因为据说到2045年,人工智能(AI)超越人类能力的技术奇点将会出现,人们也意识到了这一点。

其实在2011年,汤之上隆就曾预测全球半导体市场将以每年1125亿美元的速度增长,到2050年将达到7500亿美元。然而,2010年全球半导体市场规模为3000亿美元,40年后的2050年将增长至原来的2.5倍,对于这一预测,许多人批评说:“我认为它不会增长这么多。”

▲图2:到2050年的全球半导体市场增长预测(来源:汤之上隆根据Gartner和WSTS数据绘制)

因此,本文首先回顾了在2011年是如何对2050年的增长进行预测的,接下来,在大约十年后的2020年,我们将检验这一预测的结果,并再次尝试预测2050年全球半导体市场规模。

汤之上隆的预测结果是,到2050年,全球半导体市场规模将达到8622亿至1.123万亿美元。

不过,从短期来看,持续的中美高科技战争可能会阻碍全球半导体市场的增长。但对于人类来说,半导体是不可或缺的,汤之上隆坚信,只要人口不断增长,人类文明不断进步,半导体市场就会不断扩大。
二、全球半导体市场发展的三个时代

将时钟的指针拨回2011年左右。2008年9月,雷曼兄弟事件引发了世界金融危机。但是,全球半导体市场呈V型复苏,2010年达到3000亿美元。

当时,汤之上隆划分了三个时代,来了解全球半导体市场的转型。

▲图3:全球半导体市场趋势(资料来源:汤之上隆根据Gartner和WSTS数据绘制)

(1)1995年以前:年增长率为10%-15%的时代。日本、美国和欧洲等发达国家带动了半导体市场的增长。

(2)1995-2000年:随着Windows 95发布,这是一个半导体增长放缓的时代。虽然2000年因IT泡沫而格外突出,但汤之上隆决定将这一年作为奇点而忽略。

(3)2001年以后:半导体市场再次以5-7%的年增长率发展。下图展示了各地区半导体市场的变化,可以看出,日美欧半导体市场已经饱和,而其他亚洲半导体市场却在快速增长。

这一时期,经济开始发展的新兴国家巴西、俄罗斯、印度、中国被称为“金砖四国”。其中,中国的经济发展尤为显著,因此,包括中国在内的亚洲国家引领了全球半导体市场。

▲图4:按地域划分特定的半导体城市场趋势(资料来源:汤之上隆根据Gartner和WSTS数据绘制)

由此,汤之上隆分别估算了发达国家和新兴国家人均一年的半导体消费量。
三、人均一年消耗多少半导体?

首先,汤之上隆估算了发达国家人均一年的半导体消费量。如前文所述,全球半导体市场在1995年一度饱和。如果将2000年的IT泡沫视作一个奇点予以排除的话,1995年~2001年期间,全球半导体市场规模约为1500亿美元/年。

▲图5:世界人口变化(来源:联合国经济社会信息和政策分析局人口部编《联合国世界人口预测2006年修订版》)

从世界人口变化来看,日美欧等发达国家总人口约为10亿人(图5)。这个人口数量自2001年以来几乎没怎么变化(来源:联合国经济社会信息和政策分析局人口部编纂的《联合国世界人口预测2006年修订版》)。

因此,在发达国家,每年约有10亿人消费1500亿美元的半导体。简单计算的话,在发达国家,人均一年的半导体消费为150美元。

▲图6:人均一年消耗多少半导体?(资料来源:资料来源:汤之上隆根据Gartner和WSTS数据绘制)

例如,日本人购买PC、智能手机、数码家电、汽车等电子产品,按人均一年花费150美元(2010年1美元兑换88.8日元,相当于1万3320日元)购买半导体来计算,这一数据体感似乎很吻合。

接下来,汤之上隆计算了新兴国家的人均半导体消费量。从2001年到2010年,全球半导体市场规模增长了1500亿美元,达到约3000亿美元。其中1500亿美元是发达国家10亿人的半导体消费量,新增加的1500亿美元是新兴国家的消费量。

2010年世界人口金字塔的70亿人中,发达国家有约10亿人,新兴国家的中产阶层有约20亿人(如图7右侧所示)。剩下的40亿人是贫困阶层(Bottom of the Pyramid,BOP)。

也就是说,2010年左右,新兴国家的20亿中产阶层消费了1500亿美元的半导体。因此,通过除法运算,新兴国家中产阶层的人均一年半导体消费额为75美元,是发达国家150美元的一半。

▲图7:1995-2010年世界人口变化(来源:联合国经济社会信息与政策分析局人口部编著《联合国世界人口预测2006年修订版》)
四、世界人口金字塔的变迁

联合国预测,到2050年,世界人口总数将达90-100亿人。那时,发达国家和新兴国家的中产阶层有多少人呢?

根据上述内容,2010年以后的10年内,贫困阶层的10亿人将成为中产阶层,新兴国家中产阶层的5亿人将属于发达国家。那么,到2020年,发达国家的中产阶层将达到15亿人,新兴国家的中产阶层将达到25亿人。

也就是说,每10年,发达国家和中产阶层分别增加5亿人。因此,如果持续这样的经济发展,到2050年,发达国家的中产阶级将达到30亿人,新兴国家的中产阶级将达到40亿人(如图8右侧所示)。

▲图8:2010-2050年世界人口变化(来源:联合国经济社会信息和政策分析局人口部编纂《联合国世界人口预测2006年修订版》)
五、没打脸!两种预测方法数据相近

如果每10年发达国家和新兴国家的中产阶层分别增加5亿人,那么全球半导体市场将增加:

5亿人×150美元+5亿人×75美元=1125亿美元。

以每10年1125亿美元的速度增长,全球半导体市场变化如图2所示。据预测,2050年全球半导体市场规模将达7500亿美元,是2010年的2.5倍。

对于这一预测,有人批评说:“我不认为会有那么大的增长。”因此,汤之上隆用了完全不同的方法,来计算2050年的全球半导体市场规模。

▲图9:全球半导体市场和出货量的变化(来源:汤之上隆根据Gartner和WSTS数据绘制)

图9展现了全球半导体市场(亿美元)和出货量(亿个)的变化。根据出货量的曲线斜率,可以计算出,半导体出货量每年增加250亿个。另外,2010年左右所有半导体的平均价格为0.43美元。

因此,全球半导体市场每年平均增加250亿个×0.43美元=107.5亿美元。如果是10年,将达到1075亿美元。

以人均一年消费的半导体量来计算,全球半导体市场规模将在10年内增加1125亿美元。而根据出货数量和平均价格计算,全球半导体市场规模10年内将增加1075亿美元。

两种不同的方法计算了10年的全球半导体市场的增加额大体一致,因此,汤之上隆坚持认为“2050年全球半导体市场规模将达到7500美元的预测”几乎是正确的。
六、2020年全球半导体市场发展超预期

在此,将时钟的指针拨回到现在。

2011年,汤之上隆曾预测说:“全球半导体市场将以每10年1125亿美元的速度增长,到2050年将达到7500亿美元。”因此,他想验证一下自己的预测是否正确。

▲图10:10年前全球半导体市场增长预测的验证(来源:汤之上隆根据WSTS数据绘制)

按汤之上隆的预测,全球半导体市场将从2010年的3000亿美元增加1125亿美元,增长到2020年的4125亿美元。

事实上,据世界半导体贸易统计协会(WSTS)预测,2020年全球半导体市场将达4331.45亿美元。该数值比汤之上隆的预测值高了约5%。

WSTS还推测,2021年全球半导体市场规模将比2020年增加8.4%,超过因存储半导体泡沫而创下历史最高记录的2018年,达到4694.03亿美元。这一预测数值估计比汤之上隆的预测值高出约13.8%。

综上所述,汤之上隆认为他在2011年所做的预测是低估了,全球半导体市场的发展速度超出了他的预期。因此,那些反对汤之上隆在2011年预测数据的批评也完全没有道理。
七、重新预测2050年全球半导体市场规模

按照调查,全球半导体市场增长速度远远超出汤之上隆的预测。因此,他想再次预测一下2050年的全球半导体市场规模。

根据图10半导体出货量的曲线图斜率,可以计算出,半导体出货量以每年310亿个的速度增加。另外,由2020年平均价格为0.461美元,因此可以计算出,全球半导体市场每年平均增长310亿个×0.461美元=143亿美元,10年增长额是其10倍,即1430亿美元。

结果是,全球半导体市场将以每10年1430亿美元的速度增长,预计到2050年将达到8622亿美元。

▲图11:新的2050年全球半导体市场增长预测(来源:汤之上隆根据Gartner和WSTS数据绘制)

这里,可以做出如下预测。

以2011年为例,每年出货量增加250亿个,其平均价格为0.43美元,由此计算,全球半导体市场将在10年内增加1075亿美元。

2020年用同样方法计算的全球半导体市场10年间的增量为1430亿美元,是2010年1075亿美元的约1.33倍。

在这10年间,随着智能手机在世界范围内普及,用于智能手机的半导体出货量也呈现了飞跃性增长。另外,随着大数据时代到来,用于数据中心服务器的半导体市场也大幅增长。这些均与1.33倍的增长有关。

这样的事情在接下来的10年内也会发生吗?实际上,用于5G智能手机、人工智能的半导体出货量正在增加。因此,假设每隔10年,出货个数×出货额的增加部分持续为1.33倍。

据此计算,到2050年,全球半导体市场规模将达到1.123万亿美元,是2020年4331亿美元的2.34倍。

如果奇点在2045年到来,那么5年后,全球半导体市场规模有可能超过1万亿美元。
结语:只要人类文明在进化,全球半导体市场就会成长

根据汤之上隆的预测,三十年后的2050年,全球半导体市场规模将达到8622亿-1.123万亿美元。

但近期中美高科技战争的加剧可能会阻碍全球半导体市场的增长。10年后,半导体的微缩化将会降至1nm以下,乃至可能停止微缩化。此外,随着全球变暖等环境问题日益严重,半导体制造能力的扩大也将变得困难。因此,汤之上隆认为,和10年前一样,他的预测结果可能会受到“我认为不会增长那么多”的批评。

对于这样的批评,汤之上隆想要反驳一下。请再看一次图8。据预测,在世界人口构成中,每10年发达国家和新兴国家的中产阶层将分别增加5亿人,而贫困阶层将逐渐减少。

▲图8:2010-2050年世界人口变化(来源:联合国经济社会信息和政策分析局人口部编纂《联合国世界人口预测2006年修订版》)

是人类文明进步才需要半导体,还是半导体的普及推动了人类文明的进步?汤之上隆也不太清楚,但无论如何,对于人类文明的进步来说,半导体必不可少。除非新冠病毒毁灭人类,否则全球半导体市场就会长期持续增长。

因此,希望大家能够克服这场前所未有的疫情危机,看到30年后的半导体世界。首先要彻底洗手、漱口、戴口罩,避免不必要的外出,最大限度地注意避免感染新冠病毒。

注:原文作者汤之上隆先生主要基于世界人口变化、人均一年半导体消耗量、半导体出货量、平均价格等数据来进行预测,并未将通货膨胀、货币贬值等因素的影响纳入计算考量范围,考虑到这些影响的可能性,三十年后的全球半导体产业规模​或将更加超出预期。​

来源:EE Times Japan

Silkroad Nickel enters into exclusive partnership with Ganfeng Lithium, Ganfeng Lithium to invest US$15 mil

Felicia Tan Published on Mon, Jan 18, 2021 / 6:54 PM GMT+8 / Updated 13 hours ago




Catalist-listed Silkroad Nickel, an established producer of laterite nickel ore based in Morowali, Central Sulawesi, Indonesia, has entered into an exclusive term sheet on Jan 15 with Ganfeng Lithium.

Ganfeng Lithium is one of the world’s largest lithium compound producers and its shares are dual-listed on the Shenzhen Stock Exchange and Hong Kong Stock Exchange.

The term sheet provides for the offtake of future raw materials, the funding for upstream and downstream expansion, and potential strategic partnership initiatives in the electric vehicle (EV) battery space between both companies.

Under the agreement, Ganfeng Lithium will invest in Silkroad Nickel a three-year convertible bond with a principal amount of US$15 million ($19.9 million) which bears interest at a rate of 7% per annum.

Ganfeng Lithium has the right to convert the entire principal amount into new shares amounting to a 25% stake in either FE Resources, Silkroad Nickel’s wholly-owned subsidiary in Singapore, or its Indonesian subsidiary PT Anugrah Tambang Sejahtera.

Ganfeng Lithium has a call option to subscribe for additional new shares in either subsidiary upon conversion of the bond.

The aggregate equity interest in FE Resources or PT Anugrah that Ganfeng acquires through the conversion of the convertible bond shall not exceed 50%, and Ganfeng will enter into a 10-year ore offtake contract with PT Anugrah for the supply of at least one million tonnes per annum.

Indonesia, as one of the world’s largest producers of nickel ore, is on an EV growth trajectory from nickel ore producer to EV producer in the next five years.

According to Silkroad Nickel, the company stands to benefit and capitalise on booming EV trends around the region through the partnership with Ganfeng Lithium.

“We are pleased to announce and embark on this exclusive partnership with Ganfeng Lithium, a world leader in lithium-ion batteries and electric vehicles. As the demand for EV accelerates across the world, Indonesia has emerged as a key player in the global EV ecosystem and we are excited to be part of this exciting supply chain,” says Hong Kah Ing, executive director and CEO of Silkroad Nickel.

“We are particularly pleased to partner with such an established and experienced player like Ganfeng Lithium, with operations across the world and best-in-class technology and experience, and we look forward to an exciting new chapter of growth,” Hong adds.

Shares in Silkroad Nickel closed flat at 43 cents on Jan 18.

https://www.theedgesingapore.com/news/joint-ventures-and-alliances/silkroad-nickel-enters-exclusive-partnership-ganfeng-lithium

Sunday, January 17, 2021

老派 vs 新潮/拿督刘明

上个星期的文章刊出后,有读者留言说我的文章很Old school , 他的意思应该是说我思想陈旧腐朽,举的例子都是陈年旧事。

我查了一下此人的背景,如我所料,是一位年轻朋友。

左传曰:天因著作生才子,人不风流枉少年。

这句话的意思是说:人要在年轻,还是个少年的时期,做一些有意义的事情,而不是一味的受限于礼法。

此“风流”,不是你以为的“风流”,意思更接近于有才华而不拘于礼法的意思。

你看,我们几千年前的老祖宗都懂得少年轻狂,我曾经年轻,我当然也懂。

年轻人喜欢离经叛道,但很多事情不曾也没有机会经历过,却自以为才华横溢,不知不觉就犯了上罗胖所言:“你以为你以为的就是你以为的”陷阱。

而我上一期专栏的思维,就是围绕着“你以为”这个课题,借用历史(若谷歌和微软20 年前发生的事能称为历史的话)和自身经验来阐述这论点,怎么就成了老古董old school 了?

现代人读书不求甚解,遇事不追究原因始末就妄下结论,一句old school 就以偏概全,好不潇洒!

Old school泛滥成灾

Old school 这词什么时候流行甚至泛滥成灾已不可考,但似乎很好用。

我自己偶尔也借来开玩笑,来形容那些思想守旧,抱残守缺之人(很惭愧,原来我本身被人归类而不自知!)

最近有几宗颇大的期货询问,我们整班好朋友被一位年轻人大骂old school , 只因我们当中有人坚持要把某些细节弄清楚,以免将来发生争执。

而我们这群朋友当中,有两位是香港上市公司老板,其他人除了我之外,都不是泛泛之辈,在他眼中,我们竟然都腐朽不堪。

现在是一个凡事讲究速成的时代,人们基本上已经失去了耐心,但为求万无一失,动作稍微慢一点,就被归类为落伍old school 。

其实,这些人眼中鄙视的old school 背后,是我们祖宗千百年遗留下来的智慧财产,它们代表着:原则、信念、经验、诚实、善良,尊师重道等美德。

中华民族若失去了这些文化智慧,我们和那些未开发野蛮民族有何区别?

看看去年发生在香港的暴动事件,年轻人大肆破坏公物、满口污言秽语辱骂師长,就是明证!




被标签为old school 的线下实体商店还是大有可为,以前的o2o (offline to online) 线下到线上变成了online to offline 线上到线下,阿里的盒马鲜生就是一例!

线下实体店还是大有可为

和朋友谈起此事,他愤慨地说:这不是old school 或new school 之争,这是个人修养问题,借old school 这课题,企图掩盖自己情商之不足。

最近我有幸成为国际青年商会(JCI)主办的青年创意大赛(CYEA)的评审,接触了非常多的年轻创业才俊,我发觉一个有趣的现象,那些做事踏实、有工匠精神,态度诚恳的人,成就都非常棒!

我其实私底下也认识一些参赛者,他们都是一群好学不倦,非常努力的年轻人。他们有自己的想法,不好高骛远,最重要的是都彬彬有礼,承继了我们的中华传统美德!

我对主办方说,因为他们,我对马来西亚华裔子弟充满希望,假以时日,他们绝对是国家的优秀栋梁!

我印象非常深刻的是一位20多岁的参赛者,他继承的是一家传统的百年老店,祖父辈经营了近一个世纪的家族企业,只卖一种产品--咖啡乌。

在他努力争取下,公司开始售卖其他种类咖啡,业务蒸蒸日上,公司最近也开了一家咖啡馆,教导咖啡爱好者如何品尝咖啡的美味,发扬咖啡文化!

我好奇的问他:如何说服他还健壮的祖父和父亲,让他放手一搏?

平衡传统和现代

他说他花了几年的时间,一点一滴用行动来证明他的能力,他必须在传统和现代找出平衡。

他从不鄙视祖父辈遗留下来的传统智慧,只是他内心非常清楚,空有传统而不创新,最终还是会被时代洪流淘汰的。

他最后用实力和耐心,克服了重重代沟,让这百年老店赋予新的生命!

其实,动辄标签别人old school ,不止没有任何意义,也显得他自己思想狭隘,理由很简单,因为所有事情都是万变不离其宗。

记得当初网际网络以雷霆万钧之势,迅速吞噬了实体经济的大片江山,很多零售业者都非常担心,电商会不会把他们完全击垮。

结果时间证明,被标签为old school 的线下实体商店还是大有可为,虽然经营方式也许有点不同。

以前的o2o (offline to online) 线下到线上变成了online to offline 线上到线下,阿里的盒马鲜生就是一例!

企业勿陷大数据迷思

上一回马来西亚Lazada 总裁周南和我在同一电视节目亮相时,主持人问他,供应商应该如何面对产品同质化,价格太过透明等问题,他的回答非常有见地。

他说:当你的产品和竞争对手相似度高,陷入价格战的时候,唯一的对策就是让自己与众不同!

产品差异化,是避免自己深陷红海的其中一个策略,这是千古不变的定律,谁敢说它old school ?

在此节目里,我们聊起了大数据。主持人问我对大数据的看法,我说其实中小企业不应该堕入大数据的迷思当中,因为数据是一个冷冰冰的东西,它必须累积了数以千万甚至上亿人的消费模式,才能分析出消费者的需求和习惯,再派上用场。

但这是我们中小企业终其一生都不可能达成的任务,所以,我说与其谈new school 的大数据,不如干脆把时间精神用在有温度的old school, 就是crm (客户管理系统)上,让客户感觉到我们的用心。

自媒体时代的今天,阿珠阿花口齿不清荒腔走板都能直播带货,阿狗阿猫满口脏话鱼虾蟹,也卖得吓吓叫!

但我总觉得这种素质不会长久。

我经常鼓励有近30年传统媒体经验,说起话来字正腔圆的好友黄公雋斌,敢敢出来直播带货,甚至开班授徒,他总是犹豫不决。

他近来帮一家电器公司带货,业务屡创新高,上星期更创出一天卖出1亿4000万的纪录,谁与争锋?

功力深厚的old school 主播vs 肤浅幼稚的网红,且看谁能笑到最后。

别只会批评

New school 利用科技,把圆的世界刷平,我们绝对认同!

但科技背后的old school 智慧,才是让它走的更远的原因。

诺基亚的口号称:科技始于人性!

但它也“死于人性”!

后记:我满口old school,看来还真old school。但假如你自认很new school ,别只会批评,行动起来吧,让全世界看看你如何用new school 改变世界!

退堂!

https://www.enanyang.my/名家专栏/老派-vs-新潮拿督刘明

Saturday, January 16, 2021

Mi Technovation Berhad – A ride with tremendous growth prospect


Author: The1994Investor | Publish date: Fri, 15 Jan 2021, 10:56 PM

Established since 2012, MI is an emerging leader in equipment manufacturing for advanced semiconductor packaging. Their clients comprises of outsourced assembly and testing (“OSAT”) companies and integrated device manufacturers (“IDM”).

In this article, we introduce and discuss the growth prospect of MI, why we are optimistic about the Group, and whether it is worthwhile at its current price.


MI operates via three business units, as follows:

1. Semiconductor Equipment (“SE”) – The bread and butter of the Group

MI is principally involved in the design, development, manufacture and sale of wafer-level chip scale packaging (“WLCSP”) machines as well as providing after sales services and sale of related spare parts and components.

Its flagship products are the MI Series WLCSP sorting machines, which make up more than 90% of its total sales. In addition, four other series, namely, Ai, Li, Vi and Si have also been developed and commercialized. The table below provides brief information of the respective series:


2. Automation & Robotics (“Robotics”)

Under the Robotics segment, MI has three products, namely, Oto Series (specialized in artificial intelligence (“AI”) enabled machines), Kobot Series (a mobile robot), and Engeye Series (an AI product to perform data mining, AI analysis, and decision-making to assists engineers and operations to respond to and prevent the possible excursions).

This is a relatively new segment, started contributing in December 2019. For the first 9 months of 2020, its sales totaled RM3.3m, contributed by the newly launched KOBOT series and OTO series.

3. Semiconductor Materials and Components (“SMC”) – yet to make any contribution

In 2019, MI designed and developed the PH Series, an in-house designed pick & place precision module that has been qualified and is ready for production.

On 8 Oct 2020, the Group inked a Memorandum of Understanding (MoU) with Taiwan-based Accurus Scientific Co (“Accurus”) and its shareholders for the acquisition of 99% equity interest in Accurus. Accurus’ principal activities are manufacturing solder spheres, which are widely used for Advance Packaging in the semiconductor industry.


As at 9MFY2020, MI’s revenue by business units is mainly contributed by SE, 98%, followed by Robotics, 2%. Within the semiconductor industry value chain, MI operates as a semiconductor packaging equipment and material manufacturer.


UPDATE ON MI’S DEVELOPMENT SINCE ITS IPO

During MI’s IPO in June 2018, the Group raised a total of RM190.8m, of which RM140.0m / 73% was allocated for construction of new factories cum office buildings to accommodate for higher production capacity.

From the remaining RM50.8m, RM36.7m was budgeted for working capital requirements, RM6.0m for research & development (“R&D”) and RM8.1m to defray listing expenses. Table below illustrates MI’s utilization of the funds to-date.
Notes:
1 RM55m was for building construction whilst RM10m to purchase Computer Numerical Control (“CNC”) machines. Completed since May 2019, Home 1 currently houses the operation of SE business unit. It has a gross production space of 90,000 sq ft, a 4-fold increase in capacity to 45 machines per month. Management estimates a 50% – 60% utilization rate at end-2020.
2 Completed since January 2020, Home 2 with a production space of 90,000 sq ft house the operation of Robotics business unit. Management estimates a 40% utilization rate by end-2020.
3 On 11 September 2019, MI announced to partially re-allocate funds initially budgeted for construction of Home 2 towards setting up new engineering centers in Taiwan, Korea and China. The Company decided to scale down total floor space area of Home 2 from 250,000 sq ft to 100,000 sq ft, after careful consideration of the market conditions.

These overseas centers will keep MI on top of evolving technology trends and provide them direct exposure to top technology players, as well as access to a deeper pool of talents to develop products and know-how.

As part of the Group’s 10-year business roadmap, these centers are tasked to undertake the development of different series under the SE business unit i.e. Home 1 will focus on Mi Series, Taiwan operations will focus on Vi Series, and Suwon, Korea will focus on Ai Series, etc.

For more information on the Group’s long-term strategy, you may refer to The Breakfast Grille podcast, which was presented by Noelle Lim from BFM featuring the CEO of MI, Mr. Oh Kuang Eng on 5 January 2011.

MI’S KEY STRENGTHS AND ITS GROWTH POTENTIAL IN THE LONG TERM
Significant investment in R&D. As at 31 March 2020, MI’s R&D team comprises 99 personnel. As at FYE2019, MI has been granted 5 patents, 21 patents pending, and a further 2 in the drafting stage. Being an equipment developer cum owner, its superior proprietary technology would act as an effective barrier to entry and shield the Group from the duplication of its designs, systems and methods by potential competitors.
Tremendous growth expected from the Robotics segment. Albeit seeing only a small contribution over the last few quarters, Management sees tremendous growth in this segment for years ahead. Management has recently revised up its target for the capacity utilization rate from 25% to 40% by end-2020. This poses a strong signal to the encouraging demand in the near-term. They estimate production capacity to increase in stages and will be instrumental to its growth plans for the next 3 years.
Tier-1 clientele. MI has been able to secure three Tier-1 OSATs, notably, Advanced Semiconductor Engineering Inc (“ASE”), Amkor, and United Test and Assembly Center Ltd (“UTAC”). Local OSAT customers under their belt includes Inari and Unisem. The Group also has a strong presence amongst the IDMs from US.

As of end-2019, MI has approximately 53 active customers, with its five largest customers accounting for 59.5% of its FY19 revenue. The success in securing and retaining global customers is a testament of its product quality, customer service and proven track record.
Horizontal growth strategy with acquisition of Accurus. Solder spheres are widely used for advance packaging such as Ball Grid Array and wafer level packaging in the semiconductor industry. Besides, Accurus also involves in metal surface treatment, metal forming of aluminum, copper and tin-based solders, as well as electronic parts and components assemblies.

The acquisition provides an opportunity for MI and Accurus to establish business integration for wider product portfolio within the same distribution channel and value chain. This is in line with MI’s business plan to expand into business activities that are complementary to its existing business.

Table below summarizes Accurus’s past 3 years financial results.


The purchase price of RM217m was proposed to be settled via issuance of 74.25m new MI shares at RM3.65 per share. The acquisition was valued at 16.22x PE multiple of Accurus’s FY2019 results (peers valuation range between 21x – 46x). The lower acquisition value (industry mean was 29.4x) may be to consider for the inconsistent PAT margin over the years.
Promising industry outlook. US-based Semiconductor Equipment & Materials International (“SEMI”) forecast the assembly and packaging equipment segment to grow 8% to USD3.4bn in 2021, driven by advanced packaging capacity build-up. It also said the semiconductor test equipment is expected to increase by about 13% in 2021 on the back of 5G demand. In terms of region, SEMI expects China, Taiwan and South Korea to be the top semiconductor manufacturing equipment markets in, making up for 68.7% of the global semiconductor markets.
Surplus capacity is available to ramp up production when demand increases. As of end-2020, Home 1 & 2 utilization rate is estimated at about 60% and 40% respectively. MI has plenty of room for growth in the near term, whenever market demand increases. Furthermore, the Group is already building new manufacturing plants in China and Taiwan to prepare for future growth.

SOLID FINANCIAL PERFORMANCE


Over the past 5 years, MI’s revenue grew at a cumulative average growth rate (“CAGR”) of 16.1% p.a. Growth was steadier in the recent 3 years as demand became stronger and more consistent. The dip in FY2016 results was mainly owing to the cyclical nature of the semiconductor industry. During 2016, orders were lower as customers delay production plans.

Profitability-wise, MI’s gross and net margins were strong and consistent over the years, recording between 38% – 54% and 27% – 39% respectively. Its operating model is proved resilient as they do not sacrifice on margins despite the strong revenue growth. As a measure of efficiency, the Management sets a target for its gross and net margins to be maintained within the range of 40% – 50% and 20% – 30% respectively.

MI is currently enjoying a low tax rate, as its SE unit (Mi Equipment (M) Sdn Bhd) has successfully renewed its pioneer status for a further 5 years, up to 17 January 2024.

Growth over the years were mainly contributed by its SE unit and its top exporting countries are Taiwan, China, Korea and USA etc.
Note: FCF = CFO less ‘Net cash flow from investing activities’

MI generates healthy and consistent cash flow from operations (“CFO”), with an average CFO to Net Income of about 0.6x. The slightly below average CFO to net income ratio was due to the increasing trade receivables in recent years as business grew. Comfort drawn on the fact that most of MI’s clients are top-tiers OSAT and IDM players in the market. The Group has incurred minimal impairment on trade receivables over the years.


KEY RISKS FOR CONSIDERATION
Cyclical nature of the semiconductor industry.
Stiffer competition. The Group could see margin pressure for its machinery in the event there are new entrants or change of packaging equipment in the technology field.
Highly dependent on semiconductor spending. Weak consumer confidence and slowdown in the 5G roll-out would force the fabless companies and integrated circuit fabricators to push back their CAPEX spending.
Sensitive to foreign exchange exposure. MI’s sales are predominantly priced in USD and it has been a beneficiary of the strong USD over 2016 – 2019. Based on a sensitivity analysis, every 10% change in USD will affect the Group’s bottom-line by about RM10.7m or 15% – 20% of our FY20 estimated earnings.
Requires constant R&D for innovation. Failure to keep up with industry R&D could see them being phased out in the technological race.
Fluctuations in material costs. The Group’s cost of sales comprises raw materials, direct labour costs, subcontractor costs and factory overheads. Raw materials account for at least 60% of the total cost of sales. The raw materials consist of i) high speed and precision motors, ii) cameras and lenses, iii) maintenance free grade sliders and bearings, iv) precision fabrication parts for both aluminum and steel tools.
Increased operation cost (completion of Home 1 & 2) may cause margin to depress in the near term, given additional / new sales expected from SE & Robotics segments may not achieve its economies of scale yet.
High market expectations have been priced-in, with its current valuation at about 40x PE on its 1-year forward results (FY2021).

MAJOR SHAREHOLDERS AS AT 9 APRIL 2020

The founder, Mr Oh Kuang Eng controls the Group via a personal stake of 68.8%.

Institutional investors in MI include, Namal Ltd, PMB Shariah, Kenanga, Areca Equitytrust Fund, JPMorgan, Oregon, Ocular Asia Fund etc.

Based on the Top 30 shareholder listing, institutional investors hold a total stake of about 7% in MI only.

PEER COMPARISON

Table below compares MI to its peers within the automated test equipment and / or other technology equipment segment.

Comparisons may / may not be relevant to MI. Nevertheless, we have included them for purpose of reference.


Overall, given MI’s strong profitability, promising demand outlook and in-place capacity for growth, we would value MI within a PE range of 40x – 50x.

At a median of 45x PE, MI’s price/earnings to growth (“PEG”) ratio would be equivalent to 1.0x, on our base-case assumption that FY2021 earnings per share (“EPS”) to grow by 45% (FY2020 PAT estimated to close at RM54.4m). A PEG of 1.0x is deemed reasonable when valuing growth stocks like MI.

According to the Management, its current order visibility is around 8 weeks (2 months), which is considered healthy.

MI’s PE during FY2018 – FY2020 ranged between 14.5x – 38.9x. We applied a higher forward PE to consider for the promising industry outlook, low interest rate environment, and the relatively high valuation priced by the market on the industry.

HOW MUCH IS MI WORTH?Assumptions:
1. FY2021 Revenue assumed to grow between 15% – 25%. For the past 5 years, Mi’s grew at a 5-year CAGR of 16%. Annualizing 9MFY2020 results, Mi is expected to close at RM220m, a 15% growth from FY2019. We expect growth to accelerate in years to come as demand for Mi’s machines should increase as 5G technology and industrial 4.0 commercialized across the globe.
2. GP margin assumed to range between 45% – 50% on the worst – best case scenario. Mi’s 5-year average margin has been 47.1%. Mi has an internal GP margin target of 40% – 50%.
3. Operating cost assumed to increase by 15% / RM6m in FY2021. Past 3 years operating cost grew at a CAGR of 19%, however, the rate of increase declined to 15% in FY2020. We expect the increase in operating cost to reduce as the company expansion in Home 1 & 2 has completed in FY2020.
4. EBIT margin assumed to range between 26% – 33% on the worst – best case scenario. Mi’s 5-year EBIT range was 24% – 39%. 9MFY2020 EBIT margin recorded 23.8%.
5. Interest income from short term investments is expected to reduce from an average of RM3m per year to RM2m given the low interest rate environment and utilization of funds for capital investments purpose.
6. Mi is enjoying a low tax rate as its SE unit (Mi Equipment (M) Sdn Bhd) has successfully renewed its pioneer status for a further 5 years from 18 January 2019 to 17 January 2024. Past 5 years effective tax rate has been lower than 2%.
7. Net margin assumed to range between 27% – 33% on the worst – best case scenario. Mi’s 5-year average net margin was 47.1%, in line with its internal target of 40% – 50%. Mi’s 9MFY2020 net margin achieved only 25% due to an increase in operation cost – post expansion of Home 1 & 2
8. 10% margin of safety was applied to consider the expected decline in net margins in the near term.
9. 20% dividend payout has been the company’s dividend payout ratio over the years, since its listing in 2018.

At the closing price of RM4.16, MI is valued at about 40x PE on assumption that 1-year forward (FYE2021) earnings to achieve RM79.2m – base case assumption (PAT was RM40.8m for the 9MFY2020 results).

Friday, January 15, 2021

AT Glove (0072) - Second glove factory (5th Step)

AT Systematization Bhd dealt with Seacera Porcelain Sdn Bhd to acquire industrial land for RM10.5 million for the construction of a second glove factory.

Industrial land located in Larut & Matang (Taiping) is 72,770 square meters in size.

Deal is expected to be completed within 60 days and will be satisfied in cash, cementing its entry into the glove making business, which started last year to capitalise on the unprecedented global demand for gloves due to the Covid-19 pandemic.

For the journey, it estimated that the Chemor factory will have an estimated capacity of 63,000 pieces per hour by the end of the month.

Second factory will have the same efficiency as its maiden Chemor-plant with almost 800,000 square feet (72,770 square meters) with up to 60 double former lines which translates to 35,000 pieces per hour for each line.

Before the second factory announcement, it was expected to have an output of 2.6 billion pieces per annum. With the second factory, it is estimated to have an output of 18 billion pieces per annum.

With new strains and mutations affecting the global economy, and a general increase in awareness for hygiene and protection, the global demand will likely find a plateau and last for a while to come.

Given the group’s recent CE certification award, he related that the group has been inundated with contract order enquiries.

Against the backdrop of a third wave of the pandemic in Malaysia, the managing director noted that the sector is hampered by disruption in supply from stop/start orders of key production lines.

With further supply disruptions on the horizon, AT will look to take advantage of spot prices in the short term while it builds production capacity to handle the enquiries.

AT Systematization rose one sen or 5.71% to 18.5 sen for a market capitalisation of RM782.38 million.

Monday, January 11, 2021

李順威:2021年再生能源板塊尋寶

【明報專訊】2020年大跌市失去30萬億美元市值,3月低位後,股市反彈比過去熊市來得急劇。環球股市市值從低位回升40萬億美元,衝破100萬億美元水平。這個反彈比1929年、1938年、1974年及2009年熊市反彈厲害。

2020年實在是奇怪的一年,環球疫情囂張肆虐,但美股新高。其實反觀歷史,這並不特別:西班牙流感大流行於1918年2月至1920年4月感染了5億人,但1918年道指上升10.51%,1919年上升30.45%,由1917年12月19日至1919年11月3日回報81.38%。

市場看淡的意見不少:每周強弱勢指數極端水平,「投機熱浪」已經成為傳媒頭條,財務寬鬆使股市飛揚,新股上市瘋狂,細價股狂炒,認購期權成交破歷史紀錄,利率超低形成泡沫,比特幣、太陽能股炒得飛起,股市市值接近高位……

不過,新股上市的熱潮其實不算厲害,而且環球收購合併開始回升。私募基金有1.5萬億美元彈藥,特別收購公司熱潮有830億美元找尋投資對象,高盛稱可促進3000億美元收購。美國公司今年集資額更加達到4350億美元,高於2014年的2790億美元舊紀錄,反映市場資金充溢。新上市集資額佔1000億美元;生化科技股最受投資者歡迎,吸納230億美元。我的整體看法是大格局利好:疫苗即將大規模發放,經濟重新開始,市場資金充溢,信貸差價穩定,環球央行寬鬆不減,環球政府財政剌激尚有餘温,通脹升幅有限。

維持信貸穩定 市場會更瘋狂

我在2020年7月說「我的一個格局觀察是股市可能進入瘋狂期」,之後科技股、再生能源股及特別特殊收購公司的飈升都印證這個說法。現在美股開始有投機味,但只要市場格局仍維持信貸穩定,牛熊共舞,瘋狂可以變得更瘋狂。我相信我們已經進入一個新時代,特別包括新能源、新科技、新生化科技。現在投資格局比較2000年科網股時代更宏大,大家需放開胸懷迎接未來,環繞科技、新能源和醫藥三大範疇買賣,相信會碰到大機遇。

科技股指數2020年上升超過40%,溢價20年高位,這個走勢會否繼續呢?近月市場一個討論問題是資金會否由科技股轉入價值型股票,某些時間日子確實看到這個情况,價值型股票上升,科技股下跌,但這根本是一個誤導的問題。科技股作為一個世代潮流是不會消失,當中有不同類型,所以只會有一些科技股失寵,一些科技股取而代之,而資金不會停止流入,問題只是流入哪些科技股。科技股是一定要買,問題是買什麼科技股。分析員普遍調高2021年美科技股盈利增長預測,12月初時候的數字由15.8%上升至16.4%,和8月份一樣大的增幅。根據現時數字,2021年科技股盈利增長仍和2003年以來的平均增長接近。

至於再生能源包含的商機非常龐大,只要跟隨這條大脈絡會有投資機會。2021年的大主題將會是再生能源時代的開始,這可媲美科網股互聯網時代的一個大潮流。不要問什麼股票是代表,現在是尋寶時間,所以最適宜(不斷增減的)一籃子買賣。無可否認,2020年第四季再生能源股、特別收購公司、比特幣等高啤打資產的升幅非常厲害,投機性氣氛肯定是有的,調整總是會來,問題是時間和幅度。市場有一些投資者正預測2021年初會有調整。支持這個觀點的包括著名技術分析師Tom Demark和2020年看中多個大趨勢的Tom Lee──Tom Lee是大好友,他相信調整後仍會再升。

再生能源商機大 尋寶宜一籃子買賣

最值得深思的問題是我們是否重複1999至2000年的科網股泡沫走勢。從現時走勢及氣氛來看,重複科網股泡沫歷史是可能的。年輕的朋友可能未有親身經驗,所以不妨找找資料看看,既要放開胸懷迎接瘋狂,但是也不要忘記警惕。我的看法是見步行步,不要總想着一定會有大調整,但也要準備有調整。

shunwailee@hotmail.com
[李順威 牛熊共舞]

https://www.mpfinance.com/fin/columnist2.php?col=1463481126669&node=1610305162007&issue=20210111

王弼:美匯不轉強 美股沒跌理由

文章日期:2021年1月11日

【明報專訊】1月6日發生在美國首都華盛頓的衝擊國會事件,相信讀者都能在電視或各媒體上觀看到,因此本欄不會花大篇幅陳述,王弼只會說,事件對許多香港人來說似曾相識,巧合之處何其多!與其說事件有幕後黑手操縱,不如說天意如此。記得跟一名前輩以前討論過,他是資深馬迷,說開做馬,他說:「你以為做馬這麼容易?要控制這麼大頭牲畜,未必事事如做馬者所願!」做馬固然需要很多心機和功夫,說到底,謀事在人,成事始終在天,主流媒體今次成功徹底摧毁特朗普,怎能說沒有天意?

本欄多次說過,2016年的英國脫歐和特朗普當選總統,可以看成同一件事,就是西方的保守主義對全球主義(Globalism)的一次反擊,那一次大出建制派的意外,保守派成功突圍。什麼是全球主義呢?不容易三言兩語說清楚,但在西方保守派的眼中,特別從英語系白人的角度而言,保留盎格魯撒克遜人的傳統,理性方面,希(臘)羅(馬)哲學為重要支柱,至於道德,則由基督教承載。

侵叔落台 可視為全球主義成功反撲

可是在全球主義衝擊下,西方的傳統哲學教育在校園幾乎消失,也許只有社會上小部分最頂層的人,還對蘇格拉底和帕拉圖著作有興趣,大眾則變為沉迷運動四肢發達的人。至於道德的部分,西方社會的道德淪亡早已不是新聞,基督教義幾十年來被愈來愈多的西方人士唾棄,城市的情况尤甚,不少教堂被改裝為展覽館或賣物場地,反而鄉郊民眾仍秉承傳統。

這群保守派還有一個共通點,因為居住於鄉郊,是全球化下最受衝擊的一群,工作都被外判到第三世界,生活水平無法提高,這一群人成了支持英國脫歐和侵叔當選總統的政治勢力,2016年成功突圍奪取政權,企圖扭轉全球主義的大趨勢。

所以,無論是英國脫歐還是侵叔當選,都代表了一種民意反撲,就算不是特朗普上台,保守派的選民也會選出另一名不容於建制的人為他們發聲,因此今次侵叔被徹底鬥臭,就不只是他個人的事,而是過去4年保守主義的反抗,最終功敗垂成,全球主義會對這群反抗者進行清算。

東方式政治追殺 西方落地生根

大家不要忘記,民主黨前總統候選人希拉里,把侵叔的保守派支持者形容為可憐蟲(Deplorables),可能是衝口而出,但這才是真心話,因為她壓根兒看不起這班鄉巴佬,更難忍受是給他們奪了4年的政權!

我們目前看見是不少保守派人士的平台遭主流社交媒體封殺,已傳出Parler有機會被蘋果下架,侵叔擁有千萬追隨者的面書和推特戶口也被無限期凍結,最後遭註銷也說不定。大家都知道,社交媒體千萬追隨者是雄厚的政治資本,戶口被註銷,跟剝奪侵叔和其他保守派KOL的政治權利沒分別,東方式的政治追殺,終於在西方社會落地生根!

民主黨再奪國會 拜登派錢無後顧之憂

在保守派潰不成軍的情况下,民主黨一舉奪取白宮和國會,拜登便可無後顧之憂地派錢托市。美股上周升約2%,在短期而言,實在看不到美股有大跌的道理,硬是要找一個調整的理由,就是美匯指數在上周三觸底回升到90.07收市。

未來一段時間,只要美元持續下跌,環球股市仍會有不俗的表現。

香港奧國經濟學院院長 fb.com/buytillsuspension
[王弼 投資王道]

https://www.mpfinance.com/fin/columnist2.php?col=1463481133658&node=1610305163489&issue=20210111

Friday, January 8, 2021

(CHOIVO CAPITAL) KFIMA (6491) - A 3.6 PE Palm Oil Plantation Company with 5% Dividend Yield & 100% ROA Business Segments

Author: Choivo Capital | Publish date: Fri, 8 Jan 2021, 9:12 AM

For a the original copy with high resolution pictures, better formatting and additional details.

Go here.
(CHOIVO CAPITAL) KFIMA (6491) -
A 3.6 PE Palm Oil Plantation
Company with 5% Dividend Yield &
100% ROA Business Segments

========================================================================

https://t.me/Choivo_Capital

This writing is based on my own assumptions and estimations. It is not a buy or sell call of the company and the contents of this report should not be considered as professional financial investment advises or buy/sell recommendations. I strongly encourage you to do your own research and take independent financial advice from a professional before you proceed to invest. I make no representations as to the accuracy, completeness, correctness, suitability, or validity of any information on my report and will not be liable for any errors, omissions, or delay in this information or any losses and damages arising from its display or usage. All users should read the posts and analysis the information at their own risk and we shall not be held liable for any losses and damages.

========================================================================

Released 28 December 2020

Overview

As many would have been aware, prices of palm oil prices have been rising for the last few months and as of December 2020, have reached an 8 year high.




Why have this happened?

Well, the current high palm oil prices are due to a combination of,

Less new hectarage being planted due to lower prices from 2018 to 2019;
Pressure from NGO’s and European Governments; and
La Nina which results in colder and wetter weather, resulting in lower yield.

All of this resulted to what Godrej’s Mistry described to Bloomberg as, “A perfect storm for vegetable prices”.

And this has naturally resulted in the share prices of palm oil plantation companies in Malaysia breaking new 1 – 2-year highs.

However, most plantation companies in Malaysia consist of two types.

If they are good, they are also very expensive. With companies like Genting Plantation, Kuala Lumpur Kepong, Batu Kawan Berhad, IOI Corp, Sime Darby Plantations and United Plantations trading at 30-40PE’s with 0.5-2% Dividend Yields. Only Sarawak Oil Palms is trading at reasonable valuations.

And then there is the companies like FGV, Jaya Tiasa, TDM, Rimbunan Sawit, the 2nd tier ones. Who are heavily in debt, largely loss making (even with high palm oil prices), with sub-par management, who despite the above, are trading at 2019-2020 year highs. And if its cheap (on a book value basis), its usually for a very good reason, ie the companies do not treat minority shareholders well.

It's almost as if, “Cheap and Good” does not exist for plantation companies in Malaysia. Except, I think I found one.

An Overview on Kumpulan Fima

Berhad (KFIMA)

KFIMA was for incorporated by the Malaysian Government on 24 February 1972 for the development of Agro based industries within the framework of the then New Economic Policy.

On 1979, they started their liquid bulking terminals in Port Klang and Butterworth (a key cash cow for the company), and in 1981 became the controlling shareholder (with 60.02%) of FIMA Corporation Berhad (FIMACOR), a company that was primarily involved in the printing of security documents (another cash cow for the company). In 2002, their subsidiary FIMACOR started a joint venture with Giesecke & Devrient for the printing and production of bank notes for governments around the world.

In 1991, the company underwent a Management Buy-Out in line with the privatization policy of the Malaysian Government, with the new owner being Tan Sri Dato’ Haji Basir bin Ismail and his family. Till today, his family oversees and owns the business.

And in 1995, they ventured into the food business via a mackerel canning project (among others) in Papua New Guinea, which today makes a profit consistently, and have been increasingly its profitability.

They had also owned a stockbroking business in the 1990’s, that business along with the rest of the company was almost wiped out in the 1998 financial crisis. They have since sold that business to focus on their low risk and high profitmaking businesses in the printing of Security Documents and Liquid Bulking.

The losses incurred by the stockbroking business in 1998 resulted in large debts, which were fully paid off by 2007 due to the strong profitability of the Security Documents and Liquid Bulking division.

In 2007, just before Palm Oil prices shot up to a high of RM3,683 per tonne in 2008, they purchased an 80% stake in PT Nunukan Jaya Lestari for RM94 million, an Indonesian palm oil plantation company with 18,000 hectares (6,200 hectares plantation) in East Kalimantan.

Since then, they have made this a third core business, and most of the profits from the printing of Security Documents and Liquid Bulking (excluding the dividends steady dividends of about 5% at today’s share price) have been invested into expanding the plantation business in Indonesia and Malaysia, which is quite profitable.

Why the share price stagnated

Despite being quite well managed, with significant dividend yield, a burgeoning cash pile, and a growing plantation business, over the last 8 years, the share price has generally stayed even at RM1.7-RM2.5.

Why was this the case?


Close to zero coverage by investment analysts, and a management that does not see a need to talk to investment analysts.

The loss of one of the contracts in the security document division, which has resulted in profits falling temporarily (it has since recovered due to the increasing profitability of the plantation and food division.)

Legal problems by the Plantation Division in Indonesia which resulted in multiple impairments and writebacks, which hid the true operating performance of the company, which has been resolved.

The purchase of greenfield plantation developments in Malaysia, which required significant investments to clear the land, build required infrastructure, worker hostels, bunds, estate drains, palm nurseries, GPS mapping to ensure maximum efficiency etc, and lastly the planting of palm seedlings.

Most of these new palm oil plantations in Malaysia only hit maturity in 2020.

With the above in mind and record high oil palms prices, I think KFIMA is ripe for a re-rating.

Understanding KFIMA’s Businesses -

Printing of Security Documents

KFIMA’s involvement in the Printing of Security Documents business started when they acquired a 60.02% stake in FIMACOR in 1981, which is the largest contractor for the Malaysian Government when it comes to printing of security documents.

FIMACOR was also previously the only government agency in charge of printing security documents for the government before they were privatized.

What are these security documents? To put them simply, they are documents issued by the government, which uses special papers, inks, watermarks and presses to ensure that it is not easily faked.

In terms of product mix, as of 2020,



A large portion of the security documents produced by KFIMA is related to “Transport Documents”. These are basically your Road Tax Stickers,

This category also includes other items such as your car ownership certificates etc.
So, how good of a business is this?



As we can see from above, this is an extremely profitable business and a strong cash generator. From 1999 to 2010, the profit generated by this business have steadily increased from a loss of RM1.4m to a profit of RM45.1m. And from 2011 to 2017, this business could generate profits of RM61.7m on average.

In addition, this is also a business that needed minimal Capital Expenditures. When comparing the Profit Before Tax and the Simplified Owners Earnings (Profit Before Tax + Non-Cash Adjustments – Capital Expenditures), on average, more than 92.2% of the profit was turned into cash.

And if we were to look at it in terms of Returns On Asset – “ROA” (For every dollar invested, how much profit do I make?), from 1999 – 2010, ROA have increased steadily from -0.9% to 25%. And from 2011 – 2020, Return on Asset have averaged.18.5%

However, as the company holds large cash balances (which does not need to be reinvested into the security document business), this depresses the ROA. Excluding the large cash balances, Return on Asset for 1999 – 2010 increases to -0.9% to 53.5%. And from 2011 – 2020, Return on Asset (excluding cash) have averaged 87%.

* To simplify things, we allocate to this division all the cash in FIMACOR, this is because the printing of security documents contributes most of the profit. In addition, unlike the security documents business, the palm oil plantation business still requires very significant investment, and most of the cash generated is reinvested into the business. This is means that the return on asset (excluding cash) for this division is marginally overstated. *

How is this business so profitable?

When it comes to the business of printing security documents for governments, or currencies, the real difficulty usually comes from getting the contract and building a reputation.

After that, given the sensitivity of the items being printed, that contract is basically yours for life, with close to zero competition.

Why is there little competition? When it comes to items like those, as a government you do not want many suppliers which increases the risk of counterfeiting significantly.

In the 29 years after the management buyout, this business has only lost 1 contract related to travel documents (passports) in 2017. The earnings have since stabilized and slowly increased again.

Having said that, even after losing the contract, the return on asset (excluding cash) of the business still averages 36% in the 3 years after. The number of businesses in BURSA that can obtain these kinds of numbers can be counted on with one hand.

The downside to this business, however, is low growth prospects.

Understanding KFIMA’s Businesses –

Bulk Terminals

Now, for many people, the question would be,

“Why KFIMA versus FIMACOR?”

Especially since purchase of FIMACOR shares give you 100% exposure to the amazing Printing of Security Documents business and the profitable Indonesian Palm Oil Plantation.

And the answer would be the incredible Bulk Terminal business that is 100% owned by KFIMA (and because KFIMA is even more undervalued than FIMACOR).

KFIMA is currently the owner of 5 liquid bulk terminals. 3 of them are located at the North Port in Port Klang and 2 of them in Butterworth Port.

These terminals have in total 271 tanks and a combined storage capacity of 275,190 MT (expansion by 20,440 CBM in 2020 at Port Klang) and can handle a wide range of liquid cargoes ranging from palm oil products to latex concentrates, oleochemicals to specialty oils, as well as petroleum products, industrial chemicals, and technical fats.

KFIMA also provide the miscellaneous services like transshipment, containerization, local dispatch, heating, blanketing, drumming of liquid products, customs declaration tracking etc.

To understand why the bulking terminals business is so great, we first need to know,

What are Bulking Terminals?

To give you an idea, here is a picture of KFIMA’s bulking terminals.



An Overview on Kumpulan Fima Berhad (KFIMA)

KFIMA was for incorporated by the Malaysian Government on 24 February 1972 for the development of Agro based industries within the framework of the then New Economic Policy.

On 1979, they started their liquid bulking terminals in Port Klang and Butterworth (a key cash cow for the company), and in 1981 became the controlling shareholder (with 60.02%) of FIMA Corporation Berhad (FIMACOR), a company that was primarily involved in the printing of security documents (another cash cow for the company). In 2002, their subsidiary FIMACOR started a joint venture with Giesecke & Devrient for the printing and production of bank notes for governments around the world.

In 1991, the company underwent a Management Buy-Out in line with the privatization policy of the Malaysian Government, with the new owner being Tan Sri Dato’ Haji Basir bin Ismail and his family. Till today, his family oversees and owns the business.

And in 1995, they ventured into the food business via a mackerel canning project (among others) in Papua New Guinea, which today makes a profit consistently, and have been increasingly its profitability.

They had also owned a stockbroking business in the 1990’s, that business along with the rest of the company was almost wiped out in the 1998 financial crisis. They have since sold that business to focus on their low risk and high profitmaking businesses in the printing of Security Documents and Liquid Bulking.

The losses incurred by the stockbroking business in 1998 resulted in large debts, which were fully paid off by 2007 due to the strong profitability of the Security Documents and Liquid Bulking division.

In 2007, just before Palm Oil prices shot up to a high of RM3,683 per tonne in 2008, they purchased an 80% stake in PT Nunukan Jaya Lestari for RM94 million, an Indonesian palm oil plantation company with 18,000 hectares (6,200 hectares plantation) in East Kalimantan.

Since then, they have made this a third core business, and most of the profits from the printing of Security Documents and Liquid Bulking (excluding the dividends steady dividends of about 5% at today’s share price) have been invested into expanding the plantation business in Indonesia and Malaysia, which is quite profitable.

Why the share price stagnated

Despite being quite well managed, with significant dividend yield, a burgeoning cash pile, and a growing plantation business, over the last 8 years, the share price has generally stayed even at RM1.7-RM2.5.

Why was this the case?

A bulk terminal is an industrial facility used to store large quantities of a products (chemicals, liquids, petroleum, grain, petroleum products, food oil etc) before the product is transferred to another facility for processing or delivered to end-users.

They are typically built at ports and refineries and are often an important component of larger networks of pipelines, storage facilities and processing facilities.

Now, KFIMA’s bulking terminals are centered around ports, and the thing about bulking terminals located at ports is, you only obtain the opportunity to build them when the port is first started up or the early days of operation. As you can see above, bulking terminals require very large pieces of land situated directly at the port, or very close to it to link up to its piping infrastructure.

This is because to the ships that stops at ports are usually very large, especially if they carry the kind of goods that is stored at bulk terminals, example below.



As a port develops, the ability to buy the large tracts of land becomes increasingly difficult (or impossible) and expensive (extremely so).

And this means that competition becomes limited to just the existing bulking terminal holders (who also obtained the land early). And while demand increases from the port developing over time, supply of bulking terminals remains fixed as it becomes increasingly impossible to expand capacity.

This gives bulking terminal owners the ability to charge prices as high as the market could bear (it only needs to be slightly lower than hiring lorries to move the products directly from the ship, which also happens to be a logistical nightmare).

What does it mean in terms of the numbers?



Like the printing of security documents, this is an extremely profitable business and a strong & steady cash generator. Since Day 1, this business has been profitable. (The fall in profit in 2017 and 2018 is due to low CPO production due to the draught then, which reduced supply)

And as we can see, from 1999 to 2009, as Port Klang and Butterworth Port matured in terms of traffic, the profit generated by this business have steadily increased from RM16.2m to RM45.8m. And from 2010 to 2020, this business could generate profits of RM38.8m on average.

In addition, this is also a business that needed minimal Capital Expenditures. When comparing the Profit Before Tax and the Simplified Owners Earnings (Profit Before Tax + Non - Cash Adjustments – Capital Expenditures), on average, more than 105% of the profit was turned into cash.

And if we were to look at it in terms of Returns on Asset, from 1999-2010, ROA have increased steadily from 20% to 29%. And from 2011 – 2020, Return on Asset have averaged 40.5%

However, like the Printing of Security Documents business the company holds large cash balances (which is does not need to be reinvested into the Terminal Bulking Business), this depresses the ROA.

* To simplify things, we allocate all the cash in KFIMA (less the cash held by FIMACOR which was allocated to the printing of security document division), this is because the bulking terminal contributes most of the profit in KFIMA. In addition, unlike the bulking terminal business, the palm oil plantation business still requires very significant investment, and most of the cash generated is reinvested into the business. This is means that the return on asset (excluding cash) is marginally overstated. *

Excluding the large cash balances, Return on Asset for 1999 – 2010 increases to 24.9% to 43%. And from 2011 – 2020, Return on Asset (excluding cash) is basically infinite as a negative working capital model is sometimes employed. Ie. Free Money.

Like the printing of the security documents, the downside to this business, however, is low growth prospects.

Understanding KFIMA’s Businesses –

Food

KFIMA is also in the Mackerel Canning business in Papua New Guinea, via International Food Corporation Limited which they acquired in 1995.

The business primarily sells canned mackerel under their own brand “Besta”, and the canned Mackerel’s is also exported to Europe.



How is it in terms of profitability?



It is not a fantastic business, but over the years it is self-sustaining, profitable and contributes significant amounts of cash.

Earnings for the last few years have increased again as they started exporting more to European countries.

Understanding KFIMA’s Businesses –

Plantation

Since the start of the company, due to its agricultural background, the company always had a small Palm Oil and Pineapple Plantation in Johor.In 2006, to grow the business further, KFIMA decided to expand further into the Palm Oil Plantation business and turn it into their third pillar.

Development to expand the business was done primarily under FIMACOR. However, several estates were done under KFIMA directly as well. The details and chronology are as follows.

FIMACOR - Plantation
2007: 18,000 Hectares in Kalimantan, Indonesia (80% stake for RM94 mil)
This was a relatively mature estate that did not need much additional work beyond standard maintenance and capital expenditures.
2012: Building of Composting Plant with 17,000 mt compost fertilizer capacity, online 3Q 2013
2017: Order received from Indonesian Government revoking land title due to overlap with forestry areas. Impairment of RM28.37m taken up.
2019: New land title received for 16,474 hectares, (which is 19,974 hectares less the 3,500 overlap with forestry areas). Writeback of RM23.63m.
2020: Could not sell any CKPO for 3 quarters due to plant operating license problem. Impairment of RM17.79m on decision made by the Mahkamah Agung allowing the judicial review application by the Indonesian Government.
2021: Pending Court Decision.
Throughout all these legal actions, the Indonesian Government have allowed the plantation to continue to operate.

2012: 785.4 Hectares in Kemaman, Terengganu (Land Purchased for RM29.11 million)
Considered a greenfield development, with complete replanting required.
2014: Deal completed. 405.4 hectares consist of Palm Trees older than 28-year-old. Remaining 380 hectares unplanted.
2015: 380 Hectares unplanted, cleared. Replanting started on 405.4 hectares consist of Palm Trees older than 28-year-old.
2016: 489.1/785.4 Hectares planted.
2017: Replanting Completed.
2018: 127 Hectares (Planted from 2015-2016) or 13,672 oil palms to be replaced due to elephant encroachment. 28 Hectares are now matured.
2019: 117 Hectares are now matured.
2020: 491 Hectares are now matured. 12 Hectares or 1,295 oil palms damaged by elephants.
2015: 249.8 Hectares in Kuala Krai, Kelantan (99 year lease) (100% for RM3.7m)
2016: Site clearing and terracing expected to be completed.
2017: 110 Hectares Planted.
2020: Full replanting completed.
2015: 404.6 Hectares in Gua Musang, Kelantan (89% of Next Oasis for RM890 (not a typo), in exchange for bearing the cost of development)
2016: 249.8/404.6 Hectares cleared, and oil palm nursery sites completed.
2017: 230.7/404.6 Hectares planted.
2018: 396/404.6 Hectares planted.
2019: Damage to 13,672 young palms from elephant, trenches being built
2020: Replanting completed.
2016: 2,000 Hectares in Kuala Kangsar, Perak (80% of R.N.E Plantation for RM4.2 million) (60 years lease, option to renew for 30 years.
2018: Permission and Approvals obtained.
2020: Development commenced.
2018: 1,331 Hectares in Jeli, Kelantan (80% stake for RM33.74 million)
2018: 566 Hectares undergoing rehabilitation works, and replanting have started. 150 Hectares have been cleared and terraced. Infrastructure works being carried out. GPS mapping for system construction, terrace positioning and creating an efficient road system. Upgrade of existing workers quarters to accommodate up to 50 workers. Construction of 8 new quarters that can accommodate a further 64 workers.
2019: Rehabilitation work on 437 hectares done.
2020: Area under cultivation 1,162 hectares. Full replanting and rehabilitation completed.

KFIMA - Plantation
2011: 5,000 Hectares in Miri, Sarawak (52% equity given in exchange for developing it)
2012: 1,200/5,000 Hectares cleared.
2013: 10 blocks of living quarters completed, the rest to be completed by June 2013. 4,300/5,000 Hectares cleared. 1,115/4,300 Hectares planted.
2014: 4,888/5,000 hectares cleared. Remaining 112 hectares is used for housing etc. 2,187/4,888 Hectares planted
2015: 4,453.8/4,888 Hectares planted.
2016: 4,610.4/4,888 Hectares planted.
2017: Planting completed. 473.79 Hectares is now mature.
2018: 822/4,888 Hectares is now mature.
2019: 1,648/4,888 Hectares is now mature.
2020: 4,271/4,888 Hectares is now mature. Lower yield due to flooding. Will be fully mature in 2020.

To sum up the above developments,
Only the Indonesian Plantation acquired by FIMCOR was a brownfield development that only required the standard Maintenance and Capital Expenditures.

All other fields are greenfield developments that required significant additional capital expenditures. The most significant of which being the Miri Palm Oil Field measuring 5,000 hectares, which is 52% owned by KFIMA and will be fully mature in 2020.

The acquisition of new fields by KFIMA over the years have resulted in large capital expenditures, and the start of Greenfield Plantations have resulted in significant gestation costs from 2013-2019.

And how does this translate into the numbers?

On a Group level, the contribution of the plantations are as follows.



As we can see here, historically the Group’s plantation business is profitable.

However, the results of the group from 2012 - 2020 were depressed by the initial investments into the greenfield developments, and one off items.

If FIMACOR’s plantation business is seen individually (as it mainly consists of the mature Indonesian plantations), the following results are obtained.




Seen individually, excluding the largest greenfield development (5,000 Hectares in Miri), FIMACOR’s plantation business is significantly more impressive.

Excluding all extraordinary items (the impairment in 2017 and 2020 and writebacks in 2019), from 2009 to 2020, the plantation business of FIMACOR have averaged Return on Asset of 13.5%.

* The Return on Asset for the plantation is depressed due to cash balances not being deducted out (as we have already allocated them to the printing of security document segment)*

And if we are to look at KFIMA’s Plantation segment, which mainly holds the 5,000 hectare Miri Plantation.




From 2008 to 2013, the company has maintained it profitability, mainly from contributions from its existing small pineapple plantation and small palm oil plantation in Johor.

However, as we can see, since the acquisition of the Miri Plantation in 2011, capital expenditures have been quite high for 2012 - 2019 as the land is cleared, infrastructure built, and the oil palms planted.With all 5,000 acres in Miri maturing in 2020 and 2021 and coupled with record palm oil prices, I think KFIMA is ripe for harvesting.

Catalyst 1 – Maturity of Palm Oil

Plantation in Miri and Kemaman



Typically for a matured estate, excluding any droughts, EL Nino and El Nina’s, “FFB Per Mature Hectare – MT” should be around 23MT per hectare, a figure KFIMA hit in 2013.

When there is a drought, you get 2017, when “FFB Per Mature Hectare – MT” is only 19.4 MT

Subsequently, as there is clearing of old trees for replanting, as well many of the new trees which have not hit maturity, the yield has stayed low.

However, if we notice, in 2019 and 2020, despite matured estates rising from 8,119 Hectares in 2018, to 9,579 Hectares in 2019 and 12,533 hectares in 2020. Production have largely stayed even.

This is mainly related to the Economic Life profit of a Palm Oil Tree.





However, if we were to break it down to look at the new plantations in Malaysia, production has been increasing exponentially as these plantations achieve maturity.

And this can be seen particularly clearly in Q2 2021.






As per the quarter report, revenue from the Malaysian Plantations for Q2 2021 have increased by 64.1% (RM4.3m) versus Q1 2021.

Resulting in Profit Before Tax increasing from RM1m to RM5.5m, a 457.6% increase.

And this is mainly from the Malaysian Plantations now being profitable as the palm oil estate reach maturity.




Catalyst 2 – Recovery of business

from COVID 19, and Malaysian

Plantations making a profit.



As we can see from here, all their businesses have recovered very strongly from the Covid-19 pandemic.

Some of their businesses like the Bulking Terminals, Plantations and Foods have reached new highs.

In addition, KFIMA Plantations which primarily contains the Miri Plantation, have close to doubled revenues and recorded its maiden profit.

As for their quarterly results,







KFIMA have achieved their highest operating profit in 16 Quarters or 4 years.

(Q2 2018 is excluded as it includes a RM23.6m writeback)

Risks – Loss of Contracts from the

Printing of Security Documents

Division

In 2018, the company lost a passport printing contract with the government.

The main reason for this being passports being increasingly technologically advanced, with E-Inlay’s, E-Cover’s, and E-Pages etc.

Therefore, a portion of the passport printing contract is given to another player (DSONIC if i'm not mistaken) who also obtained the contract to do all 3 of the above, to enable them to do the complete passports.





2017 2020



This resulted in Travel Documents, which previously consisted of 54.3% of their business, reduce to just 18.8% of the business.

I do not foresee much risk when it comes to their other security documents business as much of these are still relatively low tech.

In addition, based on what I have observed in their 20 plus year history so far, the management usually inform of any bad news far in advance. For example, the loss of contract which took place in Q1 2018, was informed as early as 2016. There has been no such updates recently

And lastly, since 2018, the family owning the company have been steadily buying more shares.






For the last three years (2018, 2019 and 2020), the purchase of shares by the owners and the company can be summarized as follows.




No owner will buy more shares if they think the company is overvalued, or if they think the company is going to lose a key contract.

And if you were to notice, only for KFIMA did the family buy shares themselves.

Estimates



To identify our initial fair value, to be conservative, we will use the reversion to mean earnings for Plantation (This assumes the plantation division’s previous profitability and does not include increase in CPO prices or the new contributions).

For the Bulking Terminals and Printing of Security Documents, due to their stable earnings, we will use their normal earnings.

And as for the Food Division, there have been consistent improvement in earnings over the last few years due to various measures taken, we will use the most recent earnings.

As the company typically keeps a very large cash balance, and pays a very steady dividends, we will calculate this separately in the valuation.

A margin of safety of 10% is applied (lower than the usual 20-30%) as we are already being conservative by not pricing in the new contributions from the Miri Estate as well as higher CPO prices.

In addition, a Price to Earning Ratio of 10 is used. I personally think this is too conservative, especially given the size of the moat when it comes to the terminal bulking business and printing of security documents business which can generate close 100% ROA’s or free money.

With the above, assumptions, we obtain a valuation estimate of RM3.13.

There is no other plantation company in Bursa which sells for 3.6PE and gives you a 5% dividend yield.