calvintaneng

Note:

Last time Calvin bought Cenbond at 50 cents with NTA over Rm1.00

Calvin also bought Muda at 35 cents with NTA over Rm1.00

Both have gone up 300% to 600%

WANG ZHENG Is Better than Cenbond and Muda anytime

2016-01-08 01:57

calvintaneng

Why better?

Wang Zheng is 75 cents with Cash of 55 cents per share!

2016-01-08 01:58

CFTrader

Calvin, please do not give a wrong concept to the newbie.
Net cash is defined as the cash remaining after deducting ST and LT borrowing.

In WangZheng this case,
FD 43m
Cash n Equal 57m
ST Borrowing 75m
LT Borrowing 16m
Do the math , and you will get 9m net cash only.

2016-01-08 04:20

CFTrader

A company can hoard tons of cash, but also yield hoards of liability / borrowing.

One of the best example is YTLPOWR.
The boss claims YTLPOWR is cash-rich.
Yes it's cash rich, but not net-cash-rich.

2016-01-08 04:21

calvintaneng

Good morning CFTrader,

It depends on how you assess Wang Zheng in its totality.

The borrowings are secured by 2 Classes of Assets:

1) The building of 4 modern factories in Sungai Buloh. As such those borrowings are secured by Net Tangible Assets. And if you dig deeper you will notice that they are all at old book value. Did you notice that Wang Zheng also has 2 blocks of 3 Storey Shophouses in Rawang? The book value is around Rm160K per unit.

2) By Inventories & Receivables. Totalling Rm110 Millions.

So assuming that The Net Assets Have Taken Care of all borrowings Wang Zheng DO HAVE a surplus Cash position of Rm100 Millions.

The Sum total of Assets minus the Sum Total of all liabilities equal Net Net Value.

As for YTL Power there is a vast difference. The Sum total of YTL Power Net Net minus Total liabilities is a completely different story.

Insiders & Top 30 Substantial Share Holders Have Discovered The Deep Deep Value of Wang Zheng. They have quietly accumulated up to 88% of the total paid up capital of Wang Zheng. Only a mere 12% shares are still in free float.

This is a testament of the faith of Insiders & substantial share holders.

One more thing. Wang Zheng is a Far Far More Solid Company than XOX, Hibiscus & Xinquan. Why don't you go there and warn all the newbies there?

2016-01-08 05:02

Icon8888

U can't sell the factories to pare down debts, that will disrupt your business

At the end of the day, u need to use cash to service your debts

2016-01-08 05:44

Icon8888

Having said so, the RM72 mil trust receipts is backed by RM50 mil plus receivables, so they don't really need to use the cash to service them

as such, the net cash is indeed quite real

2016-01-08 05:50

Desa20201956

fairly valued.

Will not make market go crazy like Comintel......hahaha

2016-01-08 06:13

calvintaneng

Well done Sifu Icon8888. Rm72 millions trust receipts and Rm50 millions receivables you highlighted has neutralised the borrowings.

This is the way all i3 forumers should do. All pros and cons of an investible counter should be weighed by brain storming.

Cheers!

2016-01-08 07:43

kk123

Receivables can be fictitious and or becomes doubtful.in the past we can see this company like transmile , megan media, patimas faking it till the hole become too big..
There are not many true net cash company
Those true net cash co in most cases are able to pay good dividends consistantly
But their share price wont be cheap also..
So can forget about earning quick bucks from wang zheng, wang fei hong or whatever and go watch the action which is in china

2016-01-08 07:56

fayeTan

Dear calvin,

1) Selling at 75 cents With NTA of Rm1.06, THere is a Margin of Safety
Comment: There are many stocks trading below NTA, hence I disagree that it should be viewed as margin of safety

2) Ever increasing profit. P/E less than 10
Comment: Many companies are trading below 10x PE. What about the earnings growth prospect of the Company? If the Company can grow its earnings more than 10% in FY16, then maybe we should really look at the stock

2016-01-08 07:57

samgross

Wang Zheng will goreng like Jtiasa? Calvintaneng pick recently really geng

2016-01-08 08:02

kakashit

I like Wangzng, similar to KPSCB, but I haven placed my order, need a supporter like Calvintan

2016-01-08 08:03

CFTrader

To me, I dun like to put receivable as the way to pare down trust reciept. NNWC only consider 50% of receivable value.

Neverless, expect some big price movement from this posting.
The nature of Wang Zheng is super low liquidity counter.
After this post, it might trigger the interest from the "invisible hand" .

2016-01-08 08:09

CFTrader

Quote CalvinTaneng,
One more thing. Wang Zheng is a Far Far More Solid Company than XOX, Hibiscus & Xinquan. Why don't you go there and warn all the newbies there?

********************************************

Calvin, I just come here and comment on the calculation. It just that 1+1 = 2 , but my mind tell me it's 10 (base 2).

I have no grudge against you or your stock.

*************************************

And I'm tired and have no obligation to warn people not to buy those kind of stock. You wanna play the game, you had to risk your underwear to play it.

Your Regards,
CFTrader.

2016-01-08 08:13

Desa20201956

I will park my money in Jtiasa and Taan.

2016-01-08 08:40

ckwan11d

All shares can wait. She is no exception.

2016-01-08 08:53

fayeTan

Wang Zheng 3QFY15 earnings grew by only 3% yoy. Hence, even though the PE is below 10x, I believe it is justified

2016-01-08 09:12

calvintaneng

Good morning everybody,

As now I am in Iskandar I had left my latest copy of STOCK PERFORMANCE GUIDE by Dr Neoh Soon Kean in Singapore.

I just bought another copy of STOCK PERFORMANCE GUIDE (Sept 2015 Edition) from Popular.

These are the latest collated figures by Dr Neoh for

WANG ZHENG (pp 412)

Market Cap is Rm96 millions
Shares 160 millions

Balance Sheet {Rm mil) 2012 2013 2014

Sales 259.52 245.40 253.88

Profit before tax 12.10 14.14 12.71

Earnings 7.00 9.16 6.89

KEY STATISTICS & RATIOS

NTA/share(Rm) 0.95 1.00 1.02

Liquid Asset/share 0.51 0.53 0.55

Gross margin 13.33 15.08 12.80

Free cash flow to cap 2.78% -3.03% 9.39%

As you can SEE the earnings and growth are very stable and consistent


NTA Kept increasing every year

Cash position also increased from year to year : 0.51, 0.53, 0.55

Best of all Free Cash Flow (FCF) Improved to 9.39%. And Company increased dividend to 2.5 cents

By all yard sticks this is a solid defensive stock

2016-01-08 11:17

Desa20201956

defensive as in similar to FDs

2016-01-08 11:20

calvintaneng

Another positive is. Company exports 90% of its products overseas. And raw material of cotton and polymer in depressed prices enhance profits.

So Wang Zheng has both Defensive and Growth qualities.

2016-01-08 11:23

calvintaneng

One more thing about Wang Zheng's receivables

Since Wang Zheng is selling health care products like Baby Nappies & Adult diapers credit is extended to pharmacies, hospitals & established supermarkets. As such there is little bad debts

2016-01-08 14:17

SuperMan 99

Personally do not agree huge discount NTA = Margin of safety

There are very large numbers of stocks transacted with more than 35% discount to NTA in bursa.

Margin of safety are results of combined factors from various areas. Discount NTA is really small part of it.

2016-01-09 10:06

calvintaneng

Good morning,

In THE INTELLIGENT INVESTOR by Ben Graham the concept for "Margin of safety" was first highlighted.

Ben will only invest in a Company with at least 30% discount to NTA.

Why so?

Like building a bridge for lorries to pass through. If you build a bridge to withstand the weight of a 5 ton lorry you should not just build to 5 ton specification.

What if an 8 ton lorry ignorantly pass through. Then the bridge will collapse!

So try to build a bridge that can withstand even a lorry up to 10 tons even if the specification is only for 5 tons lorry. The extra 5 tons is a precaution just in case a person foolishly drives a n 8 ton lorry over it.

So this is an example of "Margin of safety" concept.

Others are having life boats and life jackets on ferry, parachutes in airplane, ABS Brake for fast cars and fire extinguisher in factories or petrol stations.

So the better the "Margin of Safety" or NTA the better the state of the Company. At the very worst of times Assets can be sold off to pay borrowings & fend off bankruptcy.

2016-01-09 12:40