kcchongnz blog
Sendai at 53 sen a good buy? kcchongnz
This article is for the purpose of sharing of investment philosophy, knowledge and experience. A stock may be used as an example to illustrate some principles but it has nothing to do with any individuals.
There were these comments from the most active commentator in i3investor three months ago,
Comment 1
Posted by qqq3 > Sep 20, 2018 11:23 AM | Report Abuse
waiting for what?
action now turns to Sendai
market no more KYY phobia, now looking for KYY stocks....
Sendai is interesting in that last result is disappointing....but I do not know if they have accounted for sale of the lift boat.....can be a huge positive surprise in next result......
Comment 2
Posted by qqq3 > Sep 20, 2018 05:07 PM | Report Abuse
$1 coming
Comment 3
Posted by qqq3 > Sep 26, 2018 02:43 PM | Report Abuse
all below 0.8 is extrenmely cheap
“Sendai at 80 sen is damn cheap. Where are the followers of Water Buffalo? Why they so “scary cat” and not buying Sendai?” So, he shouted.
Warren Buffet only buys good stuff, not cheap stuff. Good stuff isn’t necessary cheap stuff, although sometimes cheap stuff can also be good stuff. Does a Water Buffalo like the commentator know? Obviously not.
I wrote my first article on Sendai, “Banging on Eversendai, Risk and Return” just to share my opinion more than a year ago on 12th September 2017 in the link below when it was trading at RM1.03 then,
https://klse.i3investor.com/blogs/kcchongnz/132084.jsp
Below summarise my points of view then,
- Sendai is in a competitive industry, a dog-eat-dog world. Not a wonderful industry to be in.
- It has huge order book but its margin is very low at less than 4%. Hence its bottom-line is not good at all.
- It made huge losses in 2016. Not a good precedent.
- Its cash flows were very poor. Even cash flows from operations (CFFO) were often negative. After capital expenses, free cash flows (FCF) were in huge deficit, almost every year.
- The above leads to precarious balance sheet with total borrowings of RM1.2 billion!
- Trade receivables were huge too at RM584m, and amount owed from contract works of RM1.05 billion. Very precarious kind of business.
15 months later, the share price of Sendai slipped unabatedly as shown in the chart below and closed at 53 sen today on 12th December 2018. The loss is a whopping 47%!
So, how was your “$1.00 coming” as posted in comment 2 above?
With such a big drop of the share price to 53 sen now, is Sendai a good buy for the followers of Water Buffalo, with the release of its latest quarterly result on 29th November 2018?
It does appear so as commented by one Water Buffalo below,
Comment 4
Posted by qqq3 > Nov 29, 2018 07:41 PM | Report Abuse
actually PL and BS looks good for its price....
But is the result really that good? Let us examine it.
Sendai third quarter result ended on 30th September 2018
Sendai made a profit before tax of RM16.4m from a turnover of RM432m, or 1.7 sen per share, down by 17% from last corresponding quarter. The net profit margin is as usual, very low at 4%.
However, profit is not what we should look for in this case of Sendai. It is the cash flows. Cash flows is the lifeblood of a company, especially for Sendai at its state now. So, for true accountants, they don’t only look at Income Statement and Balance Sheet as commented but also the cash flows statement.
In the last nine months, net CFFO of Sendai is a negative of RM41m. After capital expenses, its FCF is again in the deficit to a tune of a whopping RM91m.
The cash-sucking business results in total borrowings of RM1.2billion as on 30th September 2018, a one thousand two hundred million Ringgit interest bearing debts.
What happen? With so much consistent earnings for the last few quarters, borrowings remain high?
This, any accountant would be able to find the answer from its latest balance sheet as posted in “Comment 1” above.
The contracting work for the first lift boat (not to build and sell as stated) by Sendai for its major shareholder, a related party transaction, had completed more than a year ago. In accrual accounting, all profits should have been booked. So, there won’t be any “huge positive surprise” as stated.
But it doesn’t seem that all money has been received as its trade receivables and amount owed by customers have increased by another RM120m from December 2017 to 30th September 2018.
Poor earnings, cash sucking, and debts increasing. I was very surprise there is no cash calls from the shareholders or private investors recently for the company.
Is the latest financial performance and financial position good as stated by the Water Buffalo in his comment 4 above?
The followers of Warren Buffett will not think so. I am not sure of those followers of Water Buffalo.
Is it a good time to sailing and margin on Sendai?
You make your conclusion.
For me, I think the next margin calls on Sendai are coming very soon. As it was mentioned, margin call is a vicious cycle.
I wish it won’t.
Good luck.
KC Chong
ckc14invest@gmail.com
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Discussions
6 people like this. Showing 47 of 47 comments
Posted by Zhuge_Liang > Dec 12, 2018 07:35 PM | Report Abuse
Posted by longranger > Dec 11, 2018 08:30 PM | Report Abuse
this is the stock where i got 350k profit in 4 mth but at the end sold at loss 150k in total, long term holding didnt work. Now came back again at 0.46, like a gambler want to get back the losses. Good learning and still learning with this ekovest.
How did you manage to copy his comments? Didn't know this is another Sextuplets of him.
Moral of the story is never lie. It can catch up with you one day.
2018-12-12 20:06
another chi sin lo....I read the title , click expecting to see your professional analysis whether Sendai at 53 sen can buy ...and see what I get.....regrets clicking it...but what to expect from this KC?
ps....I still got sendai at 70 sen....well, what to do...? cold storage it for the time being la.
2018-12-12 21:23
Posted by CharlesT > Dec 12, 2018 07:39 PM | Report Abuse
U sure he got so much money to lose ah
Here could be one reason, a lie that he had made RM200k from his RM100k capital.
Posted by Zhuge_Liang > Dec 12, 2018 07:35 PM | Report Abuse
Posted by longranger > Dec 11, 2018 08:30 PM | Report Abuse
this is the stock where i got 350k profit in 4 mth but at the end sold at loss 150k in total, long term holding didnt work. Now came back again at 0.46, like a gambler want to get back the losses. Good learning and still learning with this ekovest.
qqq3 lost 150k in Ekovest.
KC is right, qqq3 is telling all lies in I3.
The end is near for qqq3, KC and Sslee, please do not need to argue with him.
Let qqq3 sings "the end is near" by himself.
qqq3 did it his way.
Here is another,
He dug into his retirement fund in EPF.
2018-12-12 21:35
You tell so many lies, sure cannot cover up all.
You have 10 containers and 9 covers, no matter how you cover up still cannot cover all.
Moral of the story is never tell lie. It can catch up with you one day.
2018-12-12 21:40
moral of the story....Sendai came down just any other share...the company is still doing well.....
2018-12-12 21:48
Posted by ks55 > Nov 12, 2018 03:31 PM | Report Abuse X
Sendai supporters all bankrupt already?
Still believe super speculator to help you grow rich?
What I can remember is Sendai is 'expert' in steel fabrication.
What I can remember is Sendai having multi billion contract in hand.
All these remind me Linear went burst after it reported to Bursa it had received offer worth 1 billion ringgit in Dinding Cooling Tower project which never materialize, and many still believe what has been announced to Bursa is gospel truth.
Auditors report may not be credible just like Xingquan.
Auditors report may close one eye to creative accounting like in LICB.
Auditors report may raise red flags to the accounts but still not prepare to give qualified accounting report like Parkson.
What else I can say?
Don't trust any advice from half past six IB recommendation.
Don't believe in super investor's word.
Don't take in total so-called professionals in the field they claim they know the best.
Many only see tree instead of forest.
Many only see assets not liabilities.
Many only see big building without knowing things are already rotten inside.
Many only see company's turnover getting bigger and bigger but never realize profit become smaller and smaller.
What you need to do?
1. Know fundamentals of your company
2. Know your Directors
3. Know company's prospect and vision
4. Know quality of company's management, it reflects company's work ethics
2018-12-12 21:54
Posted by ks55 > Nov 23, 2018 05:43 PM | Report Abuse X
Blog: Where have all the value investors gone? kcchongnz
Nov 22, 2018 06:22 PM | Report Abuse
To me Jaks worth only 40 sen
Sendai even worse, can consider only below 30 sen
2018-12-12 21:55
ks...know this know that...no help....what helps is don't know any thing...didn't buy shares in 2018......
2018-12-12 21:56
ks...know this know that...no help....what helps is don't know any thing...didn't buy shares in 2018......especially no buy and hold
2018-12-12 21:57
Posted by ks55 > Sep 12, 2017 09:06 PM | Report Abuse X
Like all red chips, I just want to bring home one point. i.e. I don't trust the owner. Regardless what other people want to say, I always remind myself if I don't trust the Director, I will stay away from that counter.
Remember what analysts told you about Linear Corp when it announced to the whole world it got Dinding District Cooling Tower project worth RM 1000 million (1 Billion)?
Remember Masterskill? What happened now?
There are many many similar example.
If Directors not credible, your hard-earned money will go down the drain.
To invest in any counter, first and foremost look at who are the owners/ Directors.
Certain characters you should by all means......AVOID.
There are thousand and one other counters to look at.............
2018-12-12 21:58
ks...Sendai is 70% held by the owner....all your know this that, no help and not relevant.....
2018-12-12 22:00
dragon.....no pressure, why not? sendai go to zero also make no difference to me, obviously it will not go to zero....
kyy says he not so desperate must sell sendai....let him sell Jaks enough la.
see..I very good one, Jaks I help to buy his forced selling shares.......at 50 sen
i sure make money one.
2018-12-12 22:09
by ks55 > Dec 12, 2018 10:03 PM | Report Abuse
At least I don't lose a single sen in Sin-die
========
does it matter which counter? the smell of money is the same.
2018-12-12 22:10
Another KYY's stock, LICB is OTW to holland.
LICB total investment in Parkson carries book value 778 million.
Parkson market capital now at 300 million.
LICB holds 28% of Parkson equivalent to 84 million.
So, potentially impairment close to 700 million waiting to write off.
KYY at one time strongly promote LICB, but no where to be found now.
Believe he lost up to 4 million in LICB if he is still holding to it.....
2018-12-12 22:25
kc
do u know u can pay money to SSlee to dig up old posts.?..He very free one.
2018-12-12 22:53
Why KYY no more putting up buy call for Sendai?
Why KYY no more putting up buy call for LICB?
Is it because OTB no more with him?
Is it because he never trust research done by Cow Sense?
When he bought sufficiently big volume, he will then write something good to entice his followers to help jack the price.
Otherwise, he will let his followers live and die by themselves.
Been forsaken is the last thing his machai need to self-help in order to survive.....
2018-12-12 22:58
when down he never tell people to buy,only will tell people to chase when high
2018-12-12 23:23
Forced selling on pledged securities has begun.
More to come in next few days..........
2018-12-13 00:54
definitely a good buy. no need study, close my eyes & all in. With time, you shall get triple Q. Q sendai, Q QQQ3, Q QQQ4 till bankrupt
2018-12-13 01:34
Posted by qqq3 > Dec 12, 2018 09:23 PM | Report Abuse
another chi sin lo....I read the title , click expecting to see your professional analysis whether Sendai at 53 sen can buy ...and see what I get.....regrets clicking it...but what to expect from this KC?
So you just only try to find the "buy" or "sell" word in any analysis, rather than the details of the analysis of which this article is about because you just comprehend?
Good on you.
2018-12-13 07:22
Posted by qqq3 > Dec 12, 2018 10:09 PM | Report Abuse
kyy says he not so desperate must sell sendai....let him sell Jaks enough la.
So this time you didn't get a WhatsApp message from him in advance before his selling? Why ah?
2018-12-13 07:25
Dear all,
Just a gentle reminder:
In i3 we have “Lord of Queer” refer him as “You-Know-Who” who lost his kuku bird in a bet in i3 and since then become unspeakable evil, devoid of: manhood, conscious, self-worth, dignity, decency, shame and introspection he is roaming i3 luring his victim with PLP flattering before going for the kill and suck out all the blood from his victims. His evil knows no bounds and someone had advised me a mere utter of his unmentionable name will bring bad luck for the whole year and any association with him will cause your investment to “laosai” for one whole year. So be warned if you want to “Huat-Huat” in stock investment for year 2019 avoid him like a plague and don’t dare to even mention his name refer him as “You-Know-Who” or “Lord of Queer”.
Please remember this golden rule:
Rule number 1. Avoid at all costs the pitfall set up by PLP king “You-Know-Who”
Rule number 2. Avoid “You-Know-Who” like a plague if you do not wants to “laosai” for another one whole year in 2019
Rule number 3. Remember rule 1and 2
Thank you
2018-12-13 08:41
Blog: Where have all the value investors gone? kcchongnz
Nov 22, 2018 06:22 PM | Report Abuse
To me Jaks worth only 40 sen
Sendai even worse, can consider only below 30 sen
2018-12-13 09:12
kc
all u wallen bufalo people very funny people.
when u don't need them, they are around pestering u.
when u need them, they all disappear......
time to trade when market is hot, they say they are wallen bufalo students
time to invest, they all go missing.
very odd creatures indeed
cannot practice why u preach?
2018-12-13 11:29
Want to punt Sin-die?
Wait till it come down to 30 sen mah.
By that time Cow sense already disappear.
By that time KYY already hold no more (all forced sale mah).
By that time KYY will put up another article why he believe Sin-die is a dying stock.
By that time all experts in steel fabrication already give up.
Masterskill can go down to only 10 sen
Linear Corp can get delisted
No reason why Sin-die can still swim
I am not asking you to buy
I need not require you to help push Sin-die share price (quote from famous super speculator)
Buy at your own risk
When I sell (if any), I am not oblige to tell you
2018-12-13 13:00
Posted by qqq3 > Dec 12, 2018 09:23 PM | Report Abuse
ps....I still got sendai at 70 sen....well, what to do...? cold storage it for the time being la.
So no more boasting about your trading skill? Become a big crab inside a cage?
You see there is a big difference between an investor who has studied in details the fundamentals of the company and when the share price drops, he no worries; in contrast with a speculator who when things gone wrong, is forced to turn from a trader to an "investor".
2018-12-13 14:45
kc....what big deal?.....the profits i already make in sendai covers my cost several times over.....size matters.....
u need to teach your students.....wallen bufalo students buy during crisis......and the company still doing well.
2018-12-13 15:35
qqq3 big crap in cage makes a few chicken but lost a big fat cow
make small round in pennies but lost many pounds!
So much denial
Next will be bankruptcy!
2018-12-13 15:51
calvin
I tell u some thing...if scared of sendai at 45 ...sell and jump into some thing else likely lose even more than stay put.
2018-12-13 16:11
Posted by qqq3 > Dec 13, 2018 03:35 PM | Report Abuse
kc....what big deal?.....the profits i already make in sendai covers my cost several times over.....size matters.....
ME: ANOTHER BOASTING HOW YOU PESTERED PEOPLE HERE TO SAILANG AND MARGIN SENDAI AT MORE THAN RM1.30+, WHILE AT THE BACK YOU SOLD TO THEM AND MADE A KILLING?
OR YOU PLP YOUR MASTER HOW GOOD HE WAS KEEPING ON BUYING SENDAI AND PUSHED THE PRICE ABOVE RM1.30,WHILE YOU SOLD AND PROFIT FROM IT?
u need to teach your students.....wallen bufalo students buy during crisis......and the company still doing well.
ME: YES, WARREN BUFFET FOLLOWERS BUY STOCK AT CRISIS TIME, BUT THEY ARE GREAT STOCKS SELLING AT CHEAP PRICE, AND NOT RUBBISH STOCKS WITH A BUSINESS WHICH BLEEDS CASH EVERY YEAR.
HOW CAN I TEACH MY STUDENTS TO INVEST IN THIS KIND OF BUSINESS? HAVEN'T YOU READ ALL MY ARTICLES ON SENDAI?
COMPANY STILL DOING WELL? PLEASE ELABORATE.
2018-12-13 19:08
kc
stock market..when is more important than how....
with trade wars, hard Brexit, inverted yield curves, Huawei thingy, recession looming, in Malaysia GLC selling shares, and margin selling, Sendai is trading at 45......well, I have some shares at 70.....
traders can act fast at the top....at the bottom, what is the point of selling? got place to hide?
Sendai going bankrupt like Sapura?
Tan Sri very hard working chap, I wish him all the best. His got 70% of the shares.
2018-12-13 19:20
sslee
with trade wars, hard Brexit, inverted yield curves, Huawei thingy, recession looming, in Malaysia GLC selling shares.....too bad u didn't sell at the top...u lose money got nothing to do with me.....your own stupidity.
2018-12-13 19:24
kc
first day in stock market?
things change, stuffs happen......nevertheless....Sendai still doing well, still reporting profits, still reporting contract wins.
2018-12-13 21:04
not for me at 50 sen.
there is a big investor selling tens of millions of shares, due to Eversendai so low volume, only can clear a few hundred thousand shares a day, dunno when only he can finish selling.
2018-12-14 09:53
kc
the only thing note worthy for sendai account to Sept is that Amount due from customers under construction contracts is reduced by $ 300 milllion and receivables increased by $ 400 million. This is the tug boat delivered money not yet received.
In the mean time, bear market price drop.....every thing else nothing to do with company.
2018-12-14 10:37
Posted by qqq3 > Dec 14, 2018 10:37 AM | Report Abuse
kc
the only thing note worthy for sendai account to Sept is that Amount due from customers under construction contracts is reduced by $ 300 milllion and receivables increased by $ 400 million. This is the tug boat delivered money not yet received.
Sendai construct tug boat? For who?
When was the "tug" boat completed?
Who was the client?
Receivables increased by RM400m?
Is that a small sum? How is this compared to its "profit"?
Why still not paid by the client?
2018-12-14 15:50
Fundermentals won't works in the present bad market sentiments under continuous downtrend and duress .
2018-12-14 17:01
Posted by qqq3 > Dec 17, 2018 10:30 AM | Report Abuse
sold Genting M....now only Jaks and Supermax remain.
Genting M also no point, gives up with market like this.
Posted by qqq3 > Dec 13, 2018 07:20 PM | Report Abuse
kc
with trade wars, hard Brexit, inverted yield curves, Huawei thingy, recession looming, in Malaysia GLC selling shares, and margin selling, Sendai is trading at 45......well, I have some shares at 70.....
traders can act fast at the top....at the bottom, what is the point of selling? got place to hide?
Sendai going bankrupt like Sapura?
Tan Sri very hard working chap, I wish him all the best. His got 70% of the shares.
2018-12-17 11:14
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Is this a eversendai article or attack qqq3 article?
2018-12-12 18:53