murali

Nowadays all use the same tricks....

2015-12-01 15:24

JT Yeo

1. 相比其他家私股略为逊色 - PE is determined by ROE, if you compare it to Homeriz, Latitude ROE looks pretty bad

2. 分红股 - Bonus issue doesnt make anyone richer. You as a long term investor should know that. Bonus issue or free warrant or split whatever is just a 'trick' to shiok yourself.

3. 一旦股票的流通量增加，能够吸引基金的入驻, 不会那么容易遭到低估 - Dutch Lady got 64 million shares, Latitude has 97 million shares. And how many institutions own Dutch Lady? Plenty. Is DL undervalued? Nope.

4. 要如何使纬树的股价表现更加的出色呢？ Increase all the below: ROE, ROIC, ROE, ROIC, ROE, ROIC, ROE, ROIC, ROE, ROIC. Stop wasting time and money issue bonus. They can go ahead and split the shares until 5 billion, it would NOT add any value to shareholders.

2015-12-01 15:52

ongkkh

I agreed JT Yeo comment

2015-12-01 16:38

RicheHo

JT Yeo,

1. Have a look at the below ROE:
Homeritz - 21.67%
Pohuat - 17.43%
Liihen - 21.72%
Latitude - 19.35%

Do you think it looks PRETTY bad?

2. Bonus issue is to sound like "reward" shareholder, but I guess the main intention of KAKASHIT is to hope the number of LATITUDE shares to be increase. Or maybe it can be the other way, SHARE SPLIT. Either share split or bonus issue will make LATITUDE share price to be cheaper and hence more people will be affordable. The possibility of continue going up is much higher, isn't it?

3. Latitude PE is 8.1+ currently, the lowest compared to Homeritz, Pohuat and Liihen. By looking at this, don't you agree that LATITUDE is undervalue and also the cheapest among others furniture company?

4. I agree with your forth statement. Latitude should use their cash to further expand their production capacity or acquisition so that they can increase their revenue and profit. This is one of the way to maximise shareholder fund.

2015-12-01 16:41

JT Yeo

RicheHo,

1. If you look at a normal year or for past 3 years 2012-2014 ROE 4%, 11% & 20%, Homeritz has a more consistent ROE, which always stayed above 18%, I think the market is right to give Homeritz a higher PE.

2. I think the possibility it will go up is 99%, the possibility it will add real value is 1%.

3. If you use comparative valuation, it is 'undervalued' to the industry average. If you look at historical ROE I think it is fair price. Or from FCF, Latitude generate avg FCF of 34mil, Homeritz FCF is half of that. Homeritz EV is half of Latitude.

4. I heard they are going up/down stream of the supply chain like acquiring kiln operations. Again if those activities has higher ROE they should pursuit but if ROE is lower they will just dilute their ROE and bloat the company. Case in point being CBIP, they have a wonderful business selling palm oil mill to plantations company. Patented design, high margin/ROE, cost is the biggest pain of plantations co everyone wants to upgrade their mill to compete, great business. And they go and invest all their money into buying lands and grow palm oil, a commodity industry, a price taker, a capital intensive, a low margin/ROE business.

2015-12-01 17:31

pingdan

Here come our PE haters. He say homeriz should be higher. By higher by how much? He didnt say. He dun know give a value to a company but he keep say one comoany should higher than one company. But what is the fair value?

2015-12-01 17:53

pingdan

Or u mean if roe high u can buy at any price? PE not important. Common. PE13.38 vs PE8. Differences by 67.5percent!!

2015-12-01 18:17

cpng

http://koonyewyin.com/wordpress/2015/05/04/how-to-improve-the-price-and-liquidity-of-latitude-tree-bhd/

Letter to the CEO of Latitude Tree Bhd.
Dear Joseph Lin,
Your shareholders register will show that my wife Tan Kit Pheng, my nephew Yap Sung Pang and I are holding more than 10% of your total issued shares.
We must congratulate your management for producing such a fantastic profit. As a result, your share price has gone up very rapidly from Rm 1.00 to above Rm 6.00 in the last 24 months. You would have noticed that it has come down in the last few trading days because we have not been supporting it. Even though it is selling so cheaply in terms of P/E ratio, many investors and fund managers I spoke to, would not buy it because they are afraid that they cannot sell at some point due to poor liquidity.
I would like your board of directors to consider my suggestion on how to improve the share price and its liquidity.
Immediately give out 1 bonus share for every 4 shares held.
Split one shares into 5 shares making 20 sen its par value.
Declare to give out 1 bonus share for every 4 shares held for the next financial year.
Declare a dividend policy of giving out 30% of net annual profit.
After the completion of item 1 and 2 above, 4 original shares with one bonus share will become 25 shares. Basing on the current share price of about Rm, 6.00, the new price will be about 96 sen. It is easier for 96 sen to move up to Rm 1. 92 sen than for Rm 6.00 to move up to Rm 12.00.
Basing on your first half year profit of 45 sen per share and 100% of your products are being exported for US$, every investor can foresee your EPS for the year will most likely exceeds Rm 1.00. Moreover, you have additional income from your huge cash deposit with Banks. Your share should deserve to sell at a higher P/E ratio.
A higher share price will benefit all the shareholders, including you, as controlling shareholder. Moreover, with a higher share price, the company can take advantage of it for acquisition of assets and share placement every year according to Securities Commission rules to get large amount of cash for company expansion.
As one of the founders of IJM Corporation Bhd, I know that the company has been doing what I have described above regarding share placement and assets acquisitions to expand the company. Basing on the current IJM Corporate Bhd share price, its market capitalization exceeds Rm 13 billion.
Koon Yew Yin

2015-12-01 18:24

JT Yeo

Never said high ROE can buy at any price, but high ROE does common a higher valuation, all other else being equal. case in point Harta, PBB, Amway etc

2015-12-01 18:47

pingdan

Harta is harta. Ppb is ppb. Those are really giant multinasional company. Cannot use in homeriz and latitude case. Somemore in term of size, latitude is much more bigger than homeriz.

My question again. Then how u calculate what is the value for homeriz and latitude? Do you have any calculation to show the value of homeriz and latitude without using PE ratio?

2015-12-01 18:56

cpng

Dear Mr Koon,

Thank you for buying 10% of the company's shares and pushing the share price up while so doing.

We were advised you have been a significant shareholder in other public listed companies such as JTiasa and Mudajaya in 2014 but no longer.

We as the management of the company would like our large shareholders to show loyalty and commitment to company business, not just be a fair weather stakeholder who makes money from trading the shares.

If you have a sound business proposal for ours company, We will happy to hear from you. Otherwise happy holding.

Joseph Lin
On behalf of Latitude Management

2015-12-01 19:04

Tom

show loyalty? kyy? you need to slow slow wait la
laugh die

2015-12-01 19:25

JT Yeo

ok we will use DCF
Average 3 years DCF = 67mil.
Assume Capex = depreciation = 20mil
FCF = 47mil.
Growth rate next 10 years = 5%
Terminal growth rate = 3%
Total present value of cash flows = 810 mil
Outstanding shares = 97,208
Value per share = $8.34

Comments: 10 years growth at 5% isn't low at all. Not many companies can grow more than 10% in the long term, unless they got moat. When KC Chong did a valuation on Latitude in March 2014, using 5% growth in FCF, he comes up with a value of $6.13. That is $2 per share difference from my valuation in just over 20 months. That gives you a good gauge that Latitude value is sitting somewhere around $7-8. Very rough but we can never be precise.

http://klse.i3investor.com/blogs/kcchongnz/48173.jsp

For Homeritz
Average 3 years DCF = 23mil.
Assume Capex = depreciation = 3mil
FCF = 20mil.
Growth rate next 10 years = 5%
Terminal growth rate = 3%
Total present value of cash flows = 341 mil
Outstanding shares = 300,000
Value per share = $1.14

2015-12-01 19:38

pingdan

U didnt show the calculation. Just show ur calculation out. Anyway rm1.14 for homeriz? Seriously i wont buy any homeriz at this price. It is overvalued

2015-12-01 19:42

pingdan

Pls la. U cannot use the grow rate 5percent. U cannot even predict when the economy downturn. Somemore using this method, it did not book in what strategies that the company will implement. If the company going for wide expansion, u cannot book in the price using this method.
I dont know about homeriz but latitude have been improve year by year for 9 consecutive quarter. The grow of profit is way more than 5percent. 5percent is way too underestimate.

Somemore even using the 5percent grow, latitude is still way more undervalue than homeriz

2015-12-01 19:50

pingdan

Evertthing also got value. As a investor, we know the value and we buy at cheap sell when expensive. There is bunch of good company in bursa malaysia. As investor we must buy cheap sell expensive. U tell people to buy homeriz which is already fully value and dont buy latitude which is undervalue?

2015-12-01 19:55

kakashit

Figure is juz figure, in the end, u still need to look at the business prospect.

Juz bcoz there're many thing we do not know other than figures, so we must practice diversification, or polygamy.

2015-12-01 22:15

kakashit

he is right, if he is Warren Buffett

2015-12-01 22:16

JT Yeo

Well from my calculation, both are fairly valued, not a good price to enter thats all. Kakashit, everyone has their own calculation, just like your letter, i can disagree every single point of it, but that doesnt reduce the people that want bonus issue to make themselves happy.

2015-12-02 04:07

JT Yeo

The practice of investing is to listen to different opinions, after that, if you still want to stick to what you do, you have your conviction, simple as that.

2015-12-02 06:10

RicheHo

Wise word from JT Yeo. Last two comment (y). Totally agree.

2015-12-02 08:22

pingdan

Nvm different people got different opinion. Let see how much it priced in the long run

2015-12-02 13:51