KSL trades at RM1, RNAV is RM6, NTA is RM2.5

Plenitude trades at RM1.37, RNV is RM7, NTA is RM4

And this is real asset, fantastic lands in jb held at 1990 prices.

There is a lot of companies cheaper than saprng


Posted by Lukesharewalker > Mar 13, 2018 11:08 AM | Report Abuse

very irrational report. last nta 2.00 ++ even if impairment is 50%, that nta of 1.00.....there is still some value

I will say this again though. CAPEX planning works in OnG is very hot now. Which means that if drilling etc start again. SAPRNG should be able to show a profit.

In terms of gambling of speculative stocks, SAPRNG is looking very very attractive.

https://klse.i3investor.com/blogs/PilosopoCapital/145619.jsp

85% of your bet that SAPRNG will make a profit is funded by the banks now.

Yeah, i used to have some at 0.495 sold it when it shot up at 0.6 (felt stupid then).

The only reason i can see to buy this is the ability to basically buy gold at 50% discount, as a proxy against recession(Thus gold prices increase).


lizi Jon, i don't think it is NTA play either. I think you invest in this counter for a wrong reason. It is proxy play to gold prices.
12/03/2018 22:04

8.4bil in those NAPs is goodwill on recon, ie, that is worth zero.

Whatever part of the business is worth paying, you are already paying for it via the amount of debt.

Any purchase now is a gamble, one that is mainly funded by the banks.


Posted by curious2 > Mar 13, 2018 03:27 AM | Report Abuse

T4Q NAPS | P/NAPS: 2.0408 | 0.23
https://klse.i3investor.com/servlets/stk/5218.jsp

Why is it a good bet. Can you show me your reasoning and valuation work?



Posted by theguyz > Mar 12, 2018 11:57 PM | Report Abuse

If you put emotion and fear aside, you guys know deep down inside that SAP is a good bet

Thanks! This explains alot. Ill update this post another day.


Felicity For IRR,

https://feasibility.pro/shareholder-loan-and-equity-irr/

read example 3.

Also, with example 3, this is why the management and directors of WCE did this

http://www.intellecpoint.com/2017/07/wces-new-equity-raising.html

very smart.

IRR for equity holders much much higher.
12/03/2018 23:26

LPI may even be cheap. but alot of what you're paying for now is Teh Hong Piow.

If he dies, will public bank and LPI stop becoming PBBANK and LPI and instead turn into a bog standard bank and insurance company. I think so.

They have not yet posted a combined ratio more than 100% (undrwriting loss). This quarter barely.

Pretty much every insurance company other than LPI and Tunepro post underwriting losses. The question is what is its % over the float, thus giving you the cost of borrowings.

Tunepro problem have always been low investment income, too damn much money in treasury notes. They need to hire a good fund manager.

Other than that, the structure of the business if pretty damn fantastic.

As to why LPI can hit such record CR, i honestly have no idea and ive been trying really hard to understand. LPI also have most of their floats in Public Bank, so investment income is also fantastic.

Thats why i say, Teh Hong Piow is a god. Every business he is in, his business has the biggest advantage, the biggest moat and the best run.



Posted by shpg22 > Mar 7, 2018 03:24 PM | Report Abuse

Look at the Combined Ratio (CR) instead of EPS. TUNEPRO CR has exceed 100%, this compare to LPI of only 59%. A combined ratio of more than 100% means that an insurance company had more losses plus expenses than earned premiums and lost money on its operations. Latest quarter also register its first underwritting losses. Its rotten from core.

See what i mean by the salesman in you. :)

You say: THESE ARE NO BRAINER SURE FIRE WINNERS!!

But what you mean is : THESE ARE NO BRAINER SURE FIRE WINNERS!! (given a long enough time, which may exceed 5 to 10 years)

What you don't say is as important as what you say. Same as stockraider. Only say the good things, nothing about the bad things. Very one dimensional. Very salesman like.

the CAGR of your stocks after 5 years can be pretty good. But not many people can tahan the drop or zero movement for a long time. I can since im patient. But others, i doubt it.

Despite knowing most wont be patient enough to hold your picks and thus lose money, you still try so hard to convince them to buy, giving them the impression that the paper gains will come immediately and they should sailang and put everything in.

Why spend so much time on the forums commenting? Because, at your core, you are probably 49% a trader. Time matters alot to you. You want price to move NOW!


Posted by calvintaneng > Mar 12, 2018 11:02 PM | Report Abuse

THESE ARE NO BRAINER SURE FIRE WINNERS!!

Calvin,

I actually have some daiman and plenitude. Each about 3%.

When a man ha a hammer, everything looks like a nail.

You cannot use NTA to value everything. Definitely not banks. Although it does consist of part of the valuation of banks.

Jon Choi is young, but a very avid reader of history.

There is a line by Nassim Nicholas Taleb i like on advice.

"When the giver's hair is black, heed the reasoning but ignore the conclusion.

When his hair is grey, consider both reasoning and conclusion.

When his hair is white, skip the reasoning but mind the conclusion."


My hair still black, so maybe you shouldn't mind my conclusion so much.

But when banks failed, its was always due to over leverage, off balance sheet liabilities, failure to manage cash flow or derivatives.

I dont think RCECAP is meets any of those failure points. I wrote something on the valuation of banks. Feel free to read it and tell me where i went wrong.




Posted by calvintaneng > Mar 12, 2018 10:06 PM | Report Abuse

Jon Choivo is too young to know what happened to 49 Banks and Financial Institutions before 1997/8 Crisis

Banks, too need Margin of safety

More than 40 Banks like Sime Bank, UMBC Bank, Eu finance, MCf, MBf, Setia Timor, Bank Utama, Credit Corp & others gone bankrupt & were swallowed

Bear Stern, Country, Lehman Brothers, Barings Bank went kaput in 2007/8

During the Great Depression years of 1929 - 1939

More than 1,000 Banks in the US Closed Shop

So Ben Graham's Margin of safety applies to all

Calvintaneng.

Here is where you are making an error.

I can't give half a damn about what you say about my picks. Whether you want to praise or condemn.

If my research is unraveled by the likes of you commenting on my picks. I have clearly made a mistake. You're actions were just incidental.

You cannot affect the intrinsic value of the company. Only the price (Maybe, i doubt even 5% of your post affect the price. Most are just luck.)

If the price go down, i can buy more.

If it goes up above fair value. I'll sell.

Very simple.

Calvin, how to buy at 27 sen? That was 2010. Contract also not yet announce or tender then. Unless you're stuck for a long time, or the founder, or part of a goreng crew just frying up any thinly trader stock nobody look at.

Please.

Rmbr guys. This is not an earnings play.

This is an NTA play and hedge against recession (which should result in increase in gold prices)

Stockraider,

What is the normalized earnings of Hengyuan for the last 10 years?

Minus any gain/loss on inventory and forex.

The majority of earnings by TAE this year is fair value gains, that that away, and the P/E goes more than 10.

As always people, remember Calvin, knows how to sniff stocks with nice assets behind. But he will sell you the stock as if you should sell you mother to buy it. He is a former used car salesman after all.

Listen to the facts, ignore the opinion. TAE is at best a 2-3% position. Not sell your mother and buy position.

You have to be a fool to value banking stocks based on NTA and Net Margin only.

By that same NTA metric, i can think of so many companies cheaper than TA enterprise. Plenitude, L&G, Mahsing, KSL, Orient etc etc.

PLease don't go around playing the Walter Schloss of malaysia but sell your stock like you're KYY.

I dont remember walter schloss everyday tell people to buy this buy that. In fact, he prefers not to tell people what he buy, cause if they knew, they would not invest in him.

If only they didnt do that retarded acquisition at the peak of oil prices.

Capex planning works are going up, with oil prices hitting a new normal of 6X. But 15 billion in debt. Wow.

Without the debt, i can see myself paying 5 billion or so maybe. But with the debt. Wow.

Is there a value for SAPNRG that is not very close to zero? Im personally not even sure if i would want this company if it was given to me for RM 1 in exchange for being personally liable for the borrowings.

Not even close. IPO is RM1.85 or RM500mil Market Cap. Current normalized price (reversing bonuses) is 2.92 or RM864 market.


Tryingtogetrich karex is the biggest condom producer in the WORLD!!!!! even topglove wants to produce condom..... up and down sure got lah........ for producer of rubber products economic of scale is their competitive advantage. slowly accumulating...... i guess the price now is about the same as ipo price
12/03/2018 11:47

This is my only concern really. If they can hit the revenue needed for those IRR's.

If the IRR is PAT. We are looking at at least 1.09 bil for 8% IRR. and 1.35bil if they can get Plus's 10.5.

Not easy at all.


Fabien Extraordinaire Competition for traffic may come from MRT.
11/03/2018 19:40

Well, thanks everyone for your constructive criticism, let me respond and let’s try and find what is right.

On DCF. Let me be clear about one thing. If you need to do a DCF to justify your investment, you are fucking up. It needs to scream at you saying its bargain.

WCEHB screamed at me (ish), but I just couldn’t really see why I felt it was cheap. So I did a DCF since I think it might show me better. Now that I have a sense of the DCF, the next time I see a highway investment, I can just do it in my head.

Make no mistake, DCF is like a Hubble Telescope, adjust by just a millimetre and you’re looking at a completely different galaxy. The worst investments in the world is supported by very detailed DCF’s saying why it would work.

Why not WACC? Because i think CAPM and thus the Cost of Equity is nonsense. It is simply a theoretical construct based on assumptions and therefore by definition, does not adhere to reality.

I use the risk free rate, which I consider to be FD rates in Malaysia for a few reasons. This is likely going to infuriate a lot of finance or IB people.

1) You cannot compensate higher risk with higher interest rates.

Interest rates/yield is mainly used by banks and bond investing. And the one thing I’ve learnt, is that you cannot compensate higher risk with higher interest rates.

First and foremost, you must be certain that you get your capital back. No ifs or buts. What’s the point of a higher interest rate if the company is not good for it and is going to lose you your capital?

So I do my best to find things that are quite certain.

Compensating higher risk only works in certain scenarios and up to a point. You need, a very large amount of loans that are immaterial to you individually, that you are fairly certain is good for your capital. And then because of the sheer size (there is bound to impairment), you can build and use an actuarial table to estimate the additional cost on an interest basis, and charge quadruple that. That’s personal loans for you. Haha.

2) RM1 in the future is the same amount of money regardless if it’s from Company A or Company B.

As my first focus is company who can give the money I expect with a high certainty, it is redundant for me to use a higher interest rate to discount that.

3) There is something called margin of safety.

It’s redundant to both have a margin of safety and adjust interest rates. Its far simpler to just have a higher margin of safety than to go and calculate a DCF based on various discount rates.

4) Ease of comparison.

All my investments are generally quite certain, so if I do a DCF (which I have not other than this one) it needs to be easily comparable. I will just adjust on the margin of safety depending on the quality of the business.


brisk Imo you're under discounting in this dcf analysis. Why are you not using WACC or atleast klci average return but a 1 percent premium above risk free rate, I would have used an higher rate even for reits.



I didn't read their annual report but imho you should be more conservative especially if your words might influence others that are not that as well versed in finance compared to you.
11/03/2018 19:33

hpcp Discount rate too low
11/03/2018 22:46

The only thing cheaper than trucks for transportation of goods is trains.

Malaysia is too small for air transportation to be used locally.

Yeah, i have a feeling, that's why i added that RM300m as per flicity calculation at Jan 2017.

RAMS report stated likely to be 4 months behind schedule. That is nothing really. Id be worried if it was like 1 year or so. Hopefully it does not come to that, IJM knows how to build their highways.



Posted by Flintstones > Mar 11, 2018 04:06 PM | Report Abuse

Construction is behind schedule and likely cost over run.

kcchongnz,

Could you please link me you analysis on plenitude? I think that is one of your post i might not have read before.

I dont really care where HY price is going to be next year.

But, i need to get a normalized earnings for it for the last 10 years to determine its true money making ability.

Pleanitude was a decent buy at RM3.6. Not an all in, more like 2-3% with you being ready to top up as it drops. Since its deep value play, instead of catalyst play.

Posted by kcchongnz > Mar 9, 2018 11:57 PM | Report Abuse

Posted by abang_misai > Mar 9, 2018 11:52 PM | Report Abuse
Ini pukimak rekomen plenitude waktu puncak Rm3.60. Kfima pun sama pukimak dari segi prestasi harga saham. Memang pukimak segala

I share plenitude and Kfima in i3investor many years ago. I have never use the word "recommend", or "rekomen". If you pukimak lost money in Plenitude3 and Kfima, it is your pukimak's fault, not mind.

@probability.

Not denying that.

We all have a multitude of ancestry. But they are dominant characteristics that define each of us. I would classify you 3 as more trader than investor.

No right or wrong, good or bad. Both can also be very profitable. We have incredible traders like Ray Dalio, Jim Simmons, Ed Thorp etc.

But i make no secret of my automatic "eyeroll" for most traders. Because being a trader is almost an instinctive twitch for most people as it panders to our base human nature. And this means on an absolute basis, they are more stupid traders than stupid investors.

But as always, when you meet a great trader, you discover that they are not much different from a great investor. Its just the matter of information they take in and their actions. The decision making ability for both are still top class.

All 3 that you listed are traders, not investors. They are at best, traders with investor characteristics.


stockmanmy kc

its your students, the value investors wannabe the PE gang....with very elaborate tables and charts......the more sophisticated, the more learned, the more convinced they become believing in Hengyuan $ 40 stock.......some still do...


Who are the most bullish in the full ride from up to down.? Yes, your fellow value investors.....OTB, probability, stock raider, who else I missed?

In banking, its not the technology that matters.

But the mindset and the people behind it.

Why PBBANK can every quarter up 1-3% for the last 20 plus years? Because Teh Hong Piow is a a god of banking and most importantly, he is a major shareholder. He has skin in game.

Some goes with hong leong. Quay got skin in game.

When you have skin in game, you dont just simply give out loan. Unlike some CEO who just want his bonus and high profit figure, cause in the end if they dont pay, not your problem, cause you leave d.

RCE is very tightly held by the owners, which is comforting for me at least. On a qualitative basis.

Using my conservative calculation. NPV or FV is 2.61.

This assumes that the highway is not as good as litraks, plus or duke.

It also assumes zero growth in traffic. 4.5% discount rate.

Its one of the better bargains KLSE. One of the best actually if you don't just look at quantitative value but the business as well.

I may write a blog post on this some time. But we'll see. Not like it needs any catalyst. 2019 will start to shoot. Ill build my position in the meantime.

If we think this highway got an IRR of PLUS for example. And add in 2-3% growth per annum (in line with economy).

The valuation for it goes absolutely insane.

Of course malaysia could just die and go bankrupt, like Venezuela, in which case, we all gg anyway.

My bet, this is one of those, it takes longer than you think to happen. But when it happens, it happens faster than you think it could. Once you really understand this business and the NPV.

You wont sell. Even if it go up to 1.6 suddenly. Because you know what its really worth, and you're scared it wont come down but keep going up without you. Unless you are a trader of course.

Are you describing public bank? ;)


spectre007 52 week low.. definitely can enter and keep. Undervalued. However if u ask me about the company, it is run by a group of old timers who have been there for 20-30 years who are not susceptible to change. That's why they are forever like that. Old fashioned business with no innovation and no change for the past 20- 30 years. New blood who join the company will leave in 1 or 2 years time coz can't cope with Chinamen mindset. Perhaps this lack of change and innovation is stalling the price as we can't see any growth nor any change...
08/03/2018 16:16

I pick up loh.

If you buy RM1 for 50 sen. So what if the price drops. Just keep buying. At the end of the day you are still buying RM1 for 50 sen or less. Instant profit.

Question is this. How sure are you that its really worth RM1 and not RM0.5? That's the only thing i'm worried about. :)

Why need support. Just let it drop all the way down and buy then lah, if you're confident in your investment thesis.




Posted by Ooi Teik Bee > Mar 8, 2018 10:46 AM | Report Abuse

I am a small fry here.
We need a big fund to counter all con fund managers.
I do not have this type of capability.
I just ask others to help.
Some effort by a few big clients will also help.

Thank you.
Ooi

I just did the IRR and NPV for WCEHB.

Wow, just wow. Now i know why felicity dare to hold for 3-4 years with no movement.

I too, would like to discover if im a donkey that can talk and write well. Or a good or maybe even great investor.

Time will tell. I promised myself i will find out. I give myself a minimum of 10 years. If i cant beat the KLSE by 10% CAGR over that time period. Maybe i'm just not that good.


CharlesT In any event, records done during bull periods don't mean much. Its how you do during recession that counts.

Yeap, during bull mkt even donkey also can make 15%...
30/01/2018 15:48

Wow, just wow.

Thank god ive never gone on margin. Time to buy i think.

Wow.

As i look at this. I am reminded by an account of Seth Klarman during the 2008 crisis. Of course, this is still nothing compared to the drop and turmoil of those days.

He said during the crisis. He would find companies he consider fantastic, at unbelievable prices (very close to Net Nets). But when he buys. It just kept dropping. Every single time he buys, it drops by 5% or so the next day.

And he was buying hundreds or millions to almost a billion each day.

Every day, the prices just kept dropping with no end in sight and he could barely sleep. He would just constantly flip through the annual reports and other pieces of his research again and again. Wondering if he is wrong or if he missed out on something major somewhere. They are days when he even slept with the report. It came to a point where the annual report was breaking apart with pages falling out.

I think its time for me to start sleeping with RCECAPs report as well. I'll be buying more tmr.

I think people need to remember.

His job is to research, not make price move up. He should only apologize if he fails in his research, which i don't think he has.

I would put it this way, i've gone through his research, and often it can be a little too optimistic and fail to identify possible causes of failure, as well as the odds.

At the end of the day, he is a trader, a mid to long term one, and a very good one. So i would suggest he starts adding decision tree expected value calculations in his research. And appropriate bet sizing.

Haha its always very funny to read things written by raider.

Wow, never knew id get a chance to buy this again.

@foreverchung

Shhhhh =)

Until late 2018 or 2019, when people can clearly see the figures, on the sites, it should not move much. I really hope i will get a chance to top up on this one, but there are so many bargains now. And time is not cheap.

Time is the only company in my portfolio, where i know if tmr crisis, and this one drop 50% i can top up all the way. The others are cheap, but the business and its position is no where near as good.

Anyway, i really cukup d. 25% holding. I also scared d. Ill only buy more if tmr someone give me 1million, or i find a job at RCECAP so i can properly take care of my investment hahaha.

The last few days, have given a lot of discounts. Personally, KSL looks very very interesting.

How about buy more?


Posted by WanUtama2015 > Mar 5, 2018 03:40 PM | Report Abuse

this is the worst downfall i ever seen for a good fundamental company. whatever strategy you do now, either cut-win, cut-loss, earn less, take profit, keep capital, etc.... it tell us this is cruel...

Hmm, i would think it has higher predictability.

If i borrow you money and have monthly repayment, every month you must pay me, and every month i can record profit.

Like i always say, if my analysis is wholly undone just by one bad quarter, i must have really fucked up. Im analyzing it as a business.

I am ok with one not so bad quarter. If there is a really bad quarter, i'll need to know why. And if it changes any of the fundamentals.

On MFRS9, yeah, this is on my mind. But this will affect banks alot more. Because banks have alot of assets with ZERO impairment, and MFRS9 will require some to be made. I doubt RCECAP have zero impairment on any of its assets, its general impairment should cover it. The quarterly will be restated anyway.

Not happy with the ESOS as well. But its not excessive. So im not too worried.

Its just small fluctuation only. Even the japan deflation and stagflation took only 25 years to recover, this is nowhere near as bad.

Worse case, this will last 10-15 years.

Drop or stay the same till elections, then BN win, short spurt, before drop back cause BN is lapsap. If pakatan win, drop like siao, then stay down then go back up.

Then interest rates around the world slowly go up, making stock prices stay down.

The as interest rate reach certain level. People dont want to do all these stupid startup thing. They all want pull out money. Sentiment affects market, stay down.

Then BOJ, BOC, FR, ECB all want unwind balance sheet. Simi market crash.

BOJ BOC FR and ECB buy back but no change, siao liao. Panic, nobody dare put in money.

And the people think world economy going to end.

Stay that way for 2-4 years. Everyone takut, cause all the stimulus method like no stimulate. AI like no help for economy also.

The suddenly market go up a bit, people feel brave, one buy all buy, fly back up.

10-15 years loh. Ok can wait. Just keep buying if i think cheap.

You can live till 90.

That is 40 more years.


Posted by Outliar > Mar 5, 2018 02:13 PM | Report Abuse

@JonChoivo That's because you're young, what about other people who are in their 50's?

Hahahaha. But i think david is probably smart enough to sell before the result came out. I still held some that bought at 13.3 after selling at 17.2

I might be buy more soon.

Posted by Ricky Yeo > Mar 5, 2018 02:48 PM | Report Abuse

@demusangking there goes your fantastic article. Well-written. But predictability wise, not so much.