soojinhou

Thank you mr koon for writing. I used to hold mudajya, they are a competent construction player, that's for sure. However, I sold my stake when the rupee depreciated badly. I fear that their prospect may suffer due to exchange rate loss, even though it will still be profitable. Instead, I found a hk listed company called Agritrade Resources which mines low calorific and cheaper coal. 70% of its product are exported to India, and I thought that it is a safer bet because India has nowhere else to turn to except cheap coal due to its weakened financial state. Sure enough, Agritrade announced solid financial results and even noted that many of its clients are recalibrating their plants to burn low cost low calorific coal. Anyway, I wish you the best, and I will be monitoring Mudajya's process for investment opportunity.

2014-02-28 23:54

Investeye

Mr Koon, in you opinion what is the fair price for Mudajaya?

2014-03-01 00:02

wmliang

Today price up is because The Energy Commission has awarded the Project 3B new coal-fired power plant with a capacity of 2 x 1000 MW to 1Malaysia Development Bhd-Mitsui Co. Ltd .


Mudajaya favourite to land RM1.7b-RM2.2b civil works job if 1MDB bags deal
Posted on 25 February 2014 - 05:36am
sunbiz@thesundaily.com
PETALING JAYA (Feb 25, 2014): Mudajaya Group Bhd is said to be the frontrunner to clinch civil works estimated at RM1.7 billion to RM2.2 billion for a power project which 1Malaysia Development Bhd (1MDB) is rumoured to be the winning bidder.

Alliance Research said, if the rumour is true, Mudajaya stands to be on the preferred company for civil works as it has been "supporting" 1MDB's bid for the 2,000 megawatt coal-fired power plant project called Project 3B.

Its analyst Jeremy Goh learnt that should 1MDB win the bid for Project 3B, a consortium of Japanese and Korean firms will undertake the lead EPCC role for the plant.

"Our sources also revealed that Mudajaya has been 'supporting' 1MDB on the bid and working closely with both 1MDB and the EPCC consortium to undertake the civil works for Project 3B," he said.

From the reported value of RM11 billion for Project 3B, Goh estimated that the civil works contract could be worth RM1.65 billion to RM2.2 billion, based on 15%-20% of the total project sum.

He noted that Mudajaya's order book replenishment has been rather quiet with no new awards in 2013 as it was conserving resources for more sizeable, higher margin jobs.

"Bagging the civil works for Project 3B would provide a significant boost to its orderbook, more than doubling it from the current RM1.2 billion to RM2.9 billion to RM3.4 billion," he said.

Mudajaya has a strong track record with power plant civil works and is currently undertaking the Janamanjung 4 power station (worth RM720 million) and Tanjung Bin coal-fired plant extension (RM1 billion).

Aside from Project 3B, potential orderbook replenishment for Mudajaya could also come from civil works for Janamanjung 5 (valued at RM750 million to RM1 billion) and a land swap deal involving army facilities (RM250 million).

Alliance had cut Mudajaya's FY13 earnings by 4% to reflect its poor orderbook replenishment estimated at RM750 million for that year but said there could be upside to FY14-15 earnings if Mudajaya bags the civil works for Project 3B.

"As 1MDB is not listed, Mudajaya offers an excellent proxy to ride on the award of Project 3B theme. We reckon that this will be the key catalyst to reignite interest in Mudajaya," Goh said.

With a strong catalyst on the cards for Mudajaya, Goh raise Mudajaya target price to RM3.62 from RM3.26.

"This implies FY14-15 price-to-earnings ratio of 8.3 times and 7.7 times respectively," said Goh, who maintained a "buy" recommendation on the stock.

2014-03-01 00:38

wmliang

http://st.gov.my/images/tender/2013/Press_Release_Project_3B.pdf

2014-03-01 00:40

lmenwe

I thought the catalyst is winning the construction of power plant just won by 1MDB.

2014-03-01 00:55

miketyu

would you share why you bought MFCB?

2014-03-01 01:38

Duitbesar

Yang ini abang setuju dengan Uncle Koon, Mudahjaya memang bagus tapi pasal delay di India tu yang buat dia stag.

2014-03-01 01:51

Seek

Thanks. At last we have a construction co that is in uncle Koon's line of expertise. Thanks for highlighting Mudajaya.

2014-03-01 09:07

lohman

I think Mudajaya at the RM2.80 level is still a buy. The company's share buyback is a great comfort. Earnings visibility is now clearer, and nearer. What of Xingquan though? A 10% private placement to raise some RM30 million, coupled with a 1:2 free bonus warrant, is a real twister. Can Xingquan attract new investors at placement price of say, RM1.00, and how will existing minority shareholders like Mr Koon view this dilution, having paid significantly more for their stake? Looks like investors need to be in for the long haul for dividends are likely to be measly the next few years with the retail outlets expansion.

2014-03-01 11:22

Duitbesar

Jangan beli dulu, dia akan jatuh sebab jumaat fund beli.

2014-03-01 11:29

Lai Yin Keat

A amateur trader turn into a professionlal trader once he trade objectively, actively managing risk and protecting his capital

2014-03-01 12:08

johnny cash

my god the king is waking up---mudajaya

2014-03-01 19:45

johnny cash

SHOW ME YOUR POWER--first firing of the powerplant, end of march, mudajaya will shoot up... second firing at the end of 2nd quarter, price will shoot up again,, then 3rd and 4th... if everything moves like what is said, my god this counter is going to shoot up vertically..., not a slope anymore

2014-03-01 19:59

johnny cash

Koon Yew Yin-----at least tell us the fair value of this counter when it is rerated.. give us some ideas

2014-03-02 17:17

talkking

Mr Koon picked stock based on business prospect. No fair value

2014-03-02 17:21

johnny cash

my fren if he knows about business prospects then he also should knows about fair value,, then only he will buy or recommend it to others.. then only we know which is overvalued or still undervalued

2014-03-02 17:33

talkking

he still holding mudajaya. why he still holding? mr koon is businessman not analyst.

2014-03-02 17:36

johnny cash

he is the founder of this company,, he knows what is happening with this company.. and he knows in his mind the fair value is higher,, that is the reason why he is still holding this counter..so is it a CRIME if he share with us the fair value of this company, when rerating takes place slowly.. even though he is not an analyst but surely he knows some reputable analyst that had already calculated for him the fair value

2014-03-02 17:46

talkking

i bet you mr koon don't know the fair value

2014-03-02 17:48

Koon Yew Yin

Johnny cash, I am sorry that I cannot tell you what is the fair value which depends on so many factors. All I can tell you is that basing on the price chart, the downside risk is minimum and basing on the cost of the project the profit must be quite substantial. Imagine the power plant burns about one billion rinnggit of coal per year.

You must bear in mind that this profit is sustainable for 25 years and the consortium of Banks will ensure the concessionaire will continue to make profit otherwise they will lose their capital.

2014-03-02 17:48

johnny cash

thanks Mr Koon, of coming in and explaining it. thanks

2014-03-02 18:30

Koon Yew Yin

Johnny, I have just sent another piece for posting. It is a lesson based on my experience which should be useful to all investors. I do not pick stocks based on P/E and NTA.

2014-03-02 18:41

johnny cash

Mr Koon thank you very much for that

2014-03-02 23:41

titus

Hi Mr Koon,
How do we justify the current price as not fully value since we are not able to tell the fair value which due to many factors. I do remember you have mentioned that most of the blue chip are fully value and therefore will not able to grow much. Mudajaya has been trading in this range for 2-3 years and this might have factor in all the power plant in india.

I'm still not able to see how to value this stock. Maybe that is why i'm still not able to make big profit in the market.

Anyway, hope you can shed more light on how you did the valuation and what is the potential price this stock will reach.

I believed this stock will raise today especially after Mr Koon publish this article. Everyone might jump in since they miss the jtiasa boat previously. Somehow everyone (Including me) will have the perception that Mr Koon has a midas finger. Also the star business cover mudajaya on the front page. This will definitely create alot interest.

I looked thru the annual report (I'm not someone with financial background) but I noticed mudaya cash has drop from 360M to 68M. Anyone know what happen to cash reserve?

2014-03-03 08:36

Yong Chian Haw

Hi Mr. Koon,

Just realize you also own some Kulim. Kulim most recent quarterly result had shown a net loss figure despite the fact of climbing FCPO. While most of other plantation counter make good profit recently, will you continue on holding Kulim?

Thanks & regards,
Chian Haw

2014-03-03 10:15

Koon Yew Yin

titus, as I said fair value depends on so many factors such as investors' perception, the general market sentiment, the history of the company and your personal financial position, your willingness to accept some risk etc.

Let us talk about P/E ratio. Why should Mudajaya be selling at a single digit P/E ratio while IJM Corporation, which I also founded with other partner, be selling at a much higher P/E ratio. Both the companies are in the type of business. You must remember P/E ratio is not a fixed rule. From the price chart, you can see Mudajaya has been on cheap sale in the last few years and the downside risk is minimum. That means it is unlikely to continue selling at this price range and to be able to make good profit you must anticipate its future profit from the much delayed IPP project in India.

As you said, you have not been very successful, then you must change your mindset. As I said before, fear is often the obstacle to success. Take some calculated risk.

Why should you worry about its reduction in its cash holding as long as they have not change the auditors. If you look at IJM you will see that it has hundreds of million ringgit borrowing. If you worry so much about small things, you cannot see the big picture.

2014-03-03 10:47

Koon Yew Yin

Yong Chian Haw, I have been collecting Kulim patiently whenever its price drops to around its year low. Now I see Kulim will continue to drop because of its bad result and I will collect patiently. My reasons are:

1. The plantation business is beginning to be very profitable because the CPO price up trend is sustainable for the next few years.

2. The small reported loss due to some accounting policy, does not worry me because it is so small in comparison of its net worth.

3. Kulim is one of the largest plantation company and I have made a lot of money when Kulim's warrant went from 50 sens to above Rm 10.00 in 2008 as the CPO price shot over Rm 4,000 per ton.

4. As I said before, I buy Kulim when ordinary investors including fund managers are fearful to buy it. That is how I can buy it on cheap sale. I will sell it to them when they want to buy, may be within one year which will cost me 4.6% interest for margin finance. Do you think Kulim price will go up more than 4.6% in one year?

5. As I said before, fear is often the obstacle to success. Take some calculated risk if you want to be a super investor.

2014-03-03 11:17

khuniesingh

I am not familiar with Mudajaya, but if I am a mainstream financial analyst, I will think like this:

Mudajaya is a construction company, a cyclical industry.

I will take a look at their current order books, project pipelines and unbilled sales.

Then I make a guess when they will complete the projects underway, how fast they can bill their customer so they can recognise the revenue and how much they can replenish their orderbooks.

Then I look at Gamuda, IJM, WCT, Sunway and see what their profit margins are like, then I apply the average margin % on Mudajaya and estimate the income for next 1-2 years.

Then I throw in a lower P/E for Mudajaya, I will write in my report "Mudajaya lacks the financial clout like IJM, Gamuda to undertake major projects, hence deserve lower P/E"..so Mudajaya today is worth RM X

The potential recurring income from India? Aiyer....don't talk about it until I see the money.

----------
------
---

Come 2015, the IPP revenue started flowing in for last 1-3 quarters.

I switch my valuation method to SOP - Sum Of All Parts.

The construction business, if no major deals won, I apply the same valuation as earlier - RM X

But hey! Now that India is giving Mudajaya a fixed income finally!

Lets value the IPP business using discounted cash flow model - you get value Y.

So your new fair value = RM X + RM Y

Haiyer....why mainstreet analyst so predictable and short sighted one.

2014-03-03 12:52

Yong Chian Haw

Dear Mr. Koon,

Thanks for your reply. Yes indeed the FCPO is up-trending, however I have this worry that FCPO up because of lower FFB harvest recently due to the fact that both Malaysia and Indonesia are currently suffering on dry season. I asked my Indonesian friends, they said even Indonesia also close to 1 month no rain already. Same thing happen in Malaysia, without rain, shan't we be cautious about the FFB production?

It could be a good time to long FCPO, but I am really worrying about plantation sector next quarter result. For plantation company, revenue = FFB x FCPO, in case FCPO increase, FFB drop, Revenue will not increase right?

Just my 2 senses, correct me if I am wrong.

However, one remisier told me that Kulim is one of the very few GLC which has pretty good management. This year poor result could be due to too much spending on CAPEX, buying NBPOL, PTwin and etc. Hopefully the CAPEX will make the business become more profitable in future.

Thanks & regards,
Chian Haw

2014-03-03 14:43

pputeh

Thank you Mr Koon for yr advice and guidance. I am new on this blog. I noticed you mentioned you get yr margin financing at 4.6%. Hopefully you will be kind enough to let know the institution. Presently TA sec charges 7.5% for margin fain. Where I do my trading. Thank you for yr sharing

2014-03-03 15:59

Koon Yew Yin

pputeh, You can get margin finance at base lending rate minus 2% and without turnover fees from CIMB, RHB, Kenanga, Maybank and Public Bank. I have margin finance from all these financial institutions.

2014-03-03 16:06

johnny cash

Wong said the first unit would be commissioned by the third quarter of this year, and the other three units to be commissioned in stages soon after.- Star biz

The first unit of 360 mw will be operational by end of March and the second unit will be operational by end of the 2nd quarter. By the end of the year all the 4 units will be in full operation.-- taken from MUDAJAYA--WILD CARD

2 different statements,, so which is correct?? thanks

2014-03-03 17:52

pputeh

Thank you Mr Koon for sharing. It's hard to find people who share their experience so freely. Happy trading & God bless

2014-03-03 21:23

titus

Thanks Mr. Koon for your explanation. Trying to digest. But still can't see how to value a company yet

2014-03-04 22:21

chunghiung

Mr. Koon I usually buy books through Malaysia website : http://www.got1shop.com/index.php. I am Sarawakian. I cant find this book through this website.

2014-03-06 15:59

Koon Yew Yin

chunghiung, if you write to me koonyewyin@gmail.com and give me your postal address, I may be able to send you a copy.

2014-03-06 16:14

kenken85

Mr koon. Is the book suitable for basic entry? I wud really wan to have something to read on to equipped myself =)

2014-03-06 16:32

leelc70

Mr koon, based on your calculation of 4x power plant which can generate 1,440 mega watt per month in total i presume. 1 mega watt can cater for 1,000 house monthly consumption which only in total 1.44m house.
yearly estimated coal utilisation 6.48m ton x usd50=USD 324mil. Mean per month coal cost usd27mil. With 1.44m house must at least consume USD18.75 which equal to RM61.50 (based on 1usd=RM3.28)to breakeven which not included other overhead cost.
Lets said net profit make per house is RM4/mth. yearly is about RM69.12m. 25 years consession only generate RM1.72b which not warrant for the construction cost of usd 1.87bil.
Shall Mr KOON further illustrate the earn like of the project.
Thank you

2014-03-11 23:23

johnny cash

Post removed.Why?

2014-03-13 23:55

johnny cash

http://klse.i3investor.com/blogs/valueinvestorresearchklse/48343.jsp

2014-03-14 14:01

johnny cash

Changes in Director's Interest (S135)



Wednesday, 2 Apr 2014

6:16PM WTHORSE Liao Yuan Shun (1,500,000 units Transferred)
6:16PM OCK Ooi Chin Khoon (339,500 units Disposed)
6:15PM WTHORSE Teo Kim Tay (1,071,200 units Transferred)
6:10PM WTHORSE Teo Kim Lap (1,511,200 units Transferred)
6:09PM BOILERM Wong Wee Voo (96,000 units Disposed)
6:03PM KIANJOO DATO' SEE TEOW GUAN (150,000 units Transacted)
5:51PM CHINWEL Lim Chien Ch'eng (6,250 units Acquired)
5:40PM MMODE Ahmad Shukri Bin Abdullah (20,000 units Acquired)
5:35PM PERISAI Dato' Dr. Mohamed Ariffin Bin Hj. Aton (10,000 units Disposed)
5:35PM IHH Tan Sri Dato' Dr. Abu Bakar Bin Suleiman (24,000 units Acquired)
5:34PM IHH Dr Tan See Leng (10,055,000 units Acquired)
5:30PM DATAPRP Muhammad Fauzi Bin Abd Ghani (100,000 units Acquired)
5:29PM OSKVI Dato' Nik Mohamed Din Bin Datuk Nik Yusoff (20,000 units Disposed)
5:25PM MUDAJYA Yong Yee Coi (100,000 units Disposed)
5:24PM POHUAT TAY KIM HUAT (50,000 units Acquired)
5:14PM KNM Gan Siew Liat (12,000,000 units Transacted)
5:14PM KNM Ir Lee Swee Eng (12,000,000 units Transacted)
5:14PM PRTASCO Dato¿ Mohd Hanif bin Sher Mohamed (19,000 units Disposed)
5:13PM YINSON LIM HAN WENG (12,200,000 units Transferred)
5:09PM VOIR Ham Hon Kit (400,000 units Transacted)
5:09PM VOIR Wong Seow Mooi (33,466,533 units Transacted)
5:09PM VOIR Dr. Mohd. Amir Sharifuddin B. Hashim (4,959,529 units Transacted)
5:09PM VOIR Seow Khim Soon (33,466,533 units Transacted)
5:08PM VOIR Lee Yuet Sum (66,666 units Transacted)

DIRECTOR KEEP ON SELLING ON MUDAJAYA,,, SINCE IT IS NOT MOVING NOW BETTER SELL N INVEST IN OTHER MOVING EQUITIES.. LOOKS LIKE NO CONFIDENT ON MUDAJAYA

2014-04-02 18:51

Koon Yew Yin

Johnny cash took all the trouble to type out the full list of shares sold by Directors of 24 public listed companies. Among the 24 companies, Yong Yee Coi, Mudajaya Director sold 100,000 shares and his remaining holdings is 694,333 shares. Most of his holdings could be from his ESOS scheme which he paid Rm 1.90 per share.

Director, Ng Chee Kin sold 110.000 shares and his total holding is about 1,020,000 shares.

Former CEO, Ng Ying Loong sold in 4 separate days recently a total of 180,000 shares and he has a total of about 133,680,000 shares.

Although the total amount the company directors sold was small, nevertheless it gives the impression that they have no faith of the company.

I know they all have been working for Mudajaya for many decades and are tired of waiting for the share price to climb above Rm 3.00.

Please look at the above price chart.The price has been consolidating within this band for the last 3 or 4 years.

All serious investors will agree with me that Mudajaya is a very good buy at this price level. The downside risk in minimum.

I hope Johnny cash will not continue to make a mountain out of a mole hill.

2014-04-03 00:30

SpeedyBoy

Mr. Koon, you are right. The plus point is that the MD of Mudajaya is not in the list of sellers as provided by johnny cash.

2014-04-03 22:33

dingding

price is dropping. Directors keep selling holding share. can share the reasons?

2014-04-24 13:56

johnny cash

at last the truth came out,,no wonder ex director was selling lately...ex director want to buy car ha...

2014-04-24 20:16

johnny cash

http://klse.i3investor.com/blogs/rhb/50808.jsp

at last the TRUTH is out no wonder ex director was selling..want to buy CAR ha......

mind games ha

2014-04-24 20:22

johnmajor

Mr. Koon, why Mudajaya breaks away from IJM? I am just curious about old history.

2014-04-28 16:22

Koon Yew Yin

I first founded Mudajaya with a few partners in 1967. We joined IGB and Jrutama to list IJM in about 1990 (3 companies) We sold the shell of Mudajaya to the people who eventually listed the company.

2014-04-28 18:57

johnmajor

Mr. Koon, I always think IJM has done a great job to grow to become a construction giant with projects all over the world. Mudajaya has done a great job too to grow to become a multi billions company.

My own opinion is, construction company is facing great challenges nowadays. Many of them are killing each other by throwing price to secure project and then not paying their subcontractors or suppliers because their margin is too low and cannot cover the cost.

Anyway, thanks for sharing the story with me.

2014-04-29 10:34

johnny cash

Post removed.Why?

2014-05-27 18:37