If you're gambling on refinery cracks, i'm going to be straight here.

HENGYUAN is a far better pick. Why? Its a far shittier company.

When gambling or punting in stocks, while banking on temporary commodity price increases.

You want to pick the shittiest companies. Their earnings rise the most because of how shitty they are previously.

For recent comparisons, look at Jtiasa and TDM. Rubbish companies, but rise far faster than the best palm oil plantation co's.

https://choivocapital.com/2018/11/28/the-art-of-gambling-in-speculative-stocks/

I wrote something on this and why this is the case. You may find it useful.

Lehman Brothers, Bear Sterns had wonderful investment banking teams.

I don't think having a good IB team is essential, thought it can often be more quite profitable.

HL and PBBANK don't have that good a IB team either.


====
Philip (Can I advise you?) Any company that has poor investment banking team has a management issue. Being the smallest of the major lenders where the best companies
always go with Maybank, public, Hong Leong and CIMB, you get the more unstable companies to lend to. Higher profits no doubt, but much higher risk. If there is one coachroach, u can be sure there is more.

The real danger for banks is negative interest rates, not low interest rates.

.. why lah research still didnt finish, cannot top up T_T

This one and 5G what relationship ah

I sold a long time ago at RM1.65.

Once i did my Owners Earnings analysis for it, it became obvious for me. I also never really liked the governance of that company.

But i don't think i could have predicted the Airbus thing, im fairly certain they are not Buffet level clean from the rolls royce thing and information from the inside, but this well, interesting.

Investing in Airasia now, is like venture capitalism for me. You're investing in the people and the future business models working out.

Not smart enough for that.

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Posted by Outliar > Feb 12, 2020 7:03 PM | Report Abuse

Choivo, what are you doing with your airasia?

If you think its worth more, you should be hoping the price drops to be honest.

I personally prefer if it drops a bit more. Only bought a very small position due to its cheapness while i study more.


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Posted by RainT > Feb 13, 2020 12:13 PM | Report Abuse

really up now?

end of 1 day show?

I don't und. This company all the while so lapsap, why people don't want sell to C&C weird man.

You know, these kind of company is actually worth more dead than alive.

It might be worth it to really understand the liquidation process and see if the equity still got any meat left anot.

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apolloang tell pastor calvin to buy lo.....hehe
12/02/2020 10:57 PM

Really want to whack more too.

But i haven't study finish. T_T

Well, i hope you're right.

Why don't you write a consolidated post for all your thoughts on PCHEM. Think of it as charity work.

I'm generally ok with pchem at this price, and recently bought some, but my thesis is a little different from yours, and i definitely don't understand the pengerang project as well as you do.

We might all learn something that day.

lol topped up yesterday. For once, my timing is on point.

Well Sslee,

This is something i hope im wrong about! As i've already bought up the last of my position yesterday (just a little bit more).

Stockraider,

Hmm, it interesting that you feel that petronm stations are usually empty. I don't feel that way to be honest from my experience at their stations, though it may be just because i hold their shares. haha.

having said that, their petrol equipment is definitely a step below those of Petronas and Shell.

Whether this is a good or bad kind of cost saving, i have no idea.

Untong,

Remember, the refinery is to be honest not worth a damn, most of petronm finished goods are imported to begin with.

If Pengerang comes online, well, petronm can now save money by buying direct from Pengerang, not a bad thing.

I'm stupid that way :).

If you're not disciplined in the small things, its hard to be disciplined in the important things. Every time you do something for trading purposes, you are training that part of your brain.

Which depending on your purpose, is a good or bad thing.

Also i think its priced in?

But yeah, the straight answer is, im stupid and illogical that way.

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Outliar If you’re so sure they will make a loss in the last quarter why don’t just sell and buy back agin?
10/02/2020 11:45 PM

Read properly raider.

They spend quite abit over the last 2-3 years d.

Haha, i have feeling this is not the case. Especially since the price of fuel dropped by 20%. It would no longer be true & fair.

Maybe things have changed since i stopped being an auditor 2 years ago. Or the audit partner for this job is ok with that.

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Dear Choivo,
Stock take is at 31th Dec 2019. And the price at 31th Dec 2019 is the inventory unit price to calculate the inventory value at financial end 31th Dec 2019.

EURO4m and Euro 5 will be done by this year. Most of the capex spent. Including typical capex works, next year capex probably 200m round there bah.

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stockraider It is time to move on from refinery stocks loh...!!

Petron had not embark into Euro 4 & 5 upgrades...that will cost at least Rm 1.5b loh....!!

Very costly mah...!!

sslee,

At the end of the year audit, one of the test that auditors do for inventories, is to see if it is held at book at Lower of NRV or cost.

Typically, its best practice to use the latest price.

So in this case, if they are to use the prices as at today to value the dec inventory, there will be an inventory loss.

Dutchlady also died recently.

I can't rmbr the last time i drink dutch lady fresh milk. These days i much prefer yarra milk.

No, last q will be a loss.

The inventory needs to be valued at Net Realisable Value in the audited accounts. Given the drop in value for oil over the last month.

Assuming they hedge their usual, accounting for hedges you will be looking at a 70M inventory loss or so.

If for some reason the hedge is not valued using NRV and inventory is, it would be in excess of RM100m inventory loss.

Thanks. I think we had this discussion way back then in 2017. Its been awhile. Do you mind sending me copies of your posts.

The only recommendation 3ii will accept is Nestle.

Haha, that is probably 80% of the reason for the drop. But im concerned on a few more things.

Haha because i enjoy it i guess?

Hmm you can make it simpler if its an easy to understand business, and the price is right ?

For me, i notice that when i do these kind of really detailed analysis, i discover things that i would have otherwise missed, and alot of them are quite material.

Also when you've done that level of research and you really understand the business and who you're dealing with (management), it makes it alot easier to buy more shares and sleep when prices drop significantly.

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Posted by RainT > Feb 6, 2020 8:04 PM | Report Abuse

@choivo

With work commitment
Where u have time to do such details analysis???

Wow

For me I will make it simpler by read available articles and annual reports
And filter out what can trust what is rubbish

Haha

Thinking about it.

If you think QL can grow earnings per share by around 22% per year for the next 15 years. And lets say you value a company (with similar capital structures) that can grow 10% per year for the next 15 years at say 10 PE.

QL would be worth 50 PE.

But if the EPS growth were to increase at a higher rate, or your confidence level is higher (ie say 20 years instead of 15). The value of QL will be way way higher and an investment at the current price would make perfect sense.

Having said that, to be able to say you understand something so well, that you can say with 100% certainty its going to grow at 22% for the next 15 years at minimum.

Its almost like saying, you're sure someone is going to be worth at minimum RM100m in 15 years from starting point of RM0. Not impossible, but my god, so bloody hard.

And to top it off, that person does not need to just execute his plan at an extremely high level, he needs to stay alive. Compounded possibility of death is 1.5% from age 25-40.

Just because people use a margin account, does not mean margin is used.

Also LCTITAN owned the shares to begin with, before the IPO. I don't see why the parent company will have forced selling problems.

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Posted by dompeilee > Feb 6, 2020 4:02 PM | Report Abuse

Why Lotte Chemical's shares all pledged? Under forced selling now???

anyway, bought more pchem ytd.

Before i take on the bet, it is in your interest to know that 9m owners earnings for PETRONM is RM602m.

Unless by some miracle, ie, govt have not paid out the subsidies, i'm very unlikely to lose.




Also phillip,

What are you giving in return?

I've read all your comments on QL (odd right) and i don't see the value of your article (for me).

Because whatever you say about them, i agree with you. Wonderful bosses, super competent, i love family mart etc.

I just don't agree on the price (and even if i did after your article, the value of it is just not equivalent to what im giving up for this bet).

But i wont mind receiving some QL shares for free though.

Like this lah, if below 200m you donate to my fund 10000 shares in QL, with the proviso that im not allowed to sell it for the next 10 years.

And this is for me to keep that comment on there for one year.

For every additional year, add 105% number of shares (compounding), so 2 years will be (10000+10050) etc.

You also need to disclose to me your full name and ic number (via email), for our mutual protection, i'll send over a simple agreement after.




Having said that, i'd rather not take on the bet. You're a great dude Phillip, just need to chill a bit more.

You got RM50m already, children all study overseas, happy family. You got it made.

Why spend time proving yourself/arguing with people online, and being angry at strangers online.

Also do note when i disagree with you, i'm not trying to prove you wrong, i'm trying to prove myself wrong.

Because you're a smart guy and if i miss anything, you have a high probability of pointing it out.

I'm here to make money.

And i can only do this via selling investments that people have shown to me to be mediocre. And to buy investments which people have shown to be amazing.



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Posted by Philip (Can I advise you?) > Feb 6, 2020 11:15 AM | Report Abuse

Choivo trying to be another troll? Why don't you stick to your stock analysis, instead of eating time in coldish comments. Oh wait, none of your investment thesis ever seen to come true.

Ok now about your 200 million owners earnings for petronm. If it doesn't come true like you said it will in 2019( one quarter left to go), I want you to write in your articles a preface, " I am usually wrong in my analysis, and take my article with a grain of salt as I have no long term earnings results to back my writing".

Deal?

And yes CharlesT,

No i have not finished my research, but i've always been aware of the company and liked it, and had a rough idea of the price i would like.

So i was ok with buying a very small 1%+ position first.

Not chicken, disciplined!

Haha, i am forcing myself to always finish all my research before buying more.

For example, OPENSYS, my original thesis and what i found out from subsequent studying of the owners earnings, gave a somewhat different conclusion.

To finish my muhibbah research, i need to read all annual reports including original prospectus ( and compare against actual subsequent reality), to see if management is competent, do owners earnings analysis on the earnings since IPO. Do a forex differential analysis on the cambodia earnings etc.

However, i currently very busy with the restructuring of a company and agreement that has been in the news a lot for this and last year (i have not gone back from work earlier than 11pm on average for the whole year), a new business i started this year, 90 mins in the gym daily (new habit from last year), new girlfriend last year (so more paktor) and wasting time reading stupid wuxia novels (must cut this down this year).

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CharlesT after dropping 0.20 from yr first purchase price u chichen now ah?
04/02/2020 3:39 PM

Record and archive this folks.

This is the only time you will ever see Phillip admit fault (ok i'm exaggerating a little).

He's actually admitting himself to be a black pot!

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Posted by Philip (Can I advise you?) > Feb 3, 2020 8:00 PM | Report Abuse

This kind of lansi remarks, and he sees fit for a kettle to call the pot black.

Bought some. At this price, might as well.

Phillip,

Do you mean 2019 ?

https://klse.i3investor.com/blogs/PilosopoCapital/2020-01-27-story-h1482933261-_CHOIVO_CAPITAL_Really_Understanding_Owners_Earnings.jsp

On owners earnings basis as described above, i'm relatively confident.

However, whatever you want me to write, well, you're going to need to be specific. Hard to do a cost benefit analysis otherwise.

Not for the person selling the shares at the IPO!

Haha

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apalumau worst IPO of a decade!
04/02/2020 11:38 AM

Wuhan is in early jan right?

The drop from last year from oil and gas drop gua.

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MrCraig I'm also trying to figure out why it's dropped so much. Probably due to expectations it's Cambodia airport operations will be affected by corona virus. However, if you look carefully, the stock started sliding way before this outbreak.
03/02/2020 6:47 PM

I want to, but finish research first.

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CharlesT Ah jon dare to buy more to average down yr early batch of rm1.78 or not?
03/02/2020 12:34 PM

You would not even get 10% PA from IPO, i can pretty much guarantee you that.

not really, western their planes alot are 20 years old, but still flying, United airlines etc.


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Posted by Joon Chan > Feb 4, 2020 1:30 PM | Report Abuse

Aiyo.

If you bought into airasia at IPO, or even 5-6 years ago.

Then that's your return, go la go la find the total divs + special divs.

I see many people whack the leasing strategy when it's the de-facto business model for LCCs, and many other western airlines.

You want to sit forever in old planes like Garuda ah? We're uppper income country la, can enjoy modern planes.

The difficult thing is, not many platforms or websites can give u a share's total shareholder's return easily. So annoying.

To a large extent i prefer Allianz, however at this price, well.

Interesting, What odds are you willing to give?

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Joon Chan Oh Choivo,

no way this counter is even around in 6 years.

looks like going the way of Shell refinery.
31/01/2020 7:17 PM

Moving forward, don't do things that people can mistake for ethics problem.

There is a reason berkshire does not buy Microsoft stock. It was because warren does not want there to be any ethical issues due to his friendship with Bill gates.

How is it not pocketing the money, if these are ventures not related to the company?

Just because the "pocketing" and the "spending" was in a single transaction, does not mean the pocketing did not exist.

I would have preferred if they were whiter than white, but they are clearly not.

If those 2 want to solve this problem perfectly, they just need to announce that they now realize that there are some ethical problems, they apologize, and therefore, caterham will fully repay the USD50m received to airasia.

Settle.

Relax Phillip,

If you're right, why does it matter that others decide to lose money by not buying?

Having said that, even though buffet and munger have tens of billions, or close to hundred billion, and are borderline worshiped by millions of people like me, i've never heard them in any shape way or form, say "I hope you learnt something today".

Well, im quite happy that my credit line is thus far mostly unused. This is starting to look attractive.

Well, here's to hoping it drops to 4.

As the size is too big for me, that only around that price would i be willing to buy more.

Phillip,

Id like to see you do this intrinsic valuation for QL.

try and see.


====
So to simplify my intrinsic valuation of the business, I expect them to do:
2020-2024.

Revenue estimation:

Water meter: 40 million earnings a year
LRT3: 385 million earnings over 5 years (7% of 5.5 billion), 70 million a year
MRT2: 150 million earnings over 3 years (15% of 1 billion), 50 million a year.
Engineering:? If I told you they submitted a bid for NFCP package 1 with Ericsson would you be impressed? I can't confirm this, but if march comes round and this comes true I would be the first person to be happy, unlikely as it may sound. In any case, any company that goes from treatment plant contractor to sole water meter manufacturer in Malaysia to hospital contractor to wtp concession to rail contractor has to have a strong technical team. They will have a fighting chance unlike many contractors out there.
Discounting= 20%

Yearly earnings 128 million for the next 4 years, or 5 year outlook of 500 million in earnings from which I only need to pay 273 million today ( with 200 million in cash).

Well, at this price, not much can go wrong anyway.

I guess this will be the second stock i have in common with phillip. Hahahaha

Not buying anymore PCHEM ah.

I'll tell you about it in 6 more years.

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Philip (Can I advise you?) Nothing odd here. Your long term returns reflect your investing acumen. Rather than being an ass, just compare your 10 year investment returns with your investing principle, the docks that you bought, the stocks you thought were good but didn't buy, and the stocks that others bought but you thought were not good. No use giving a million analysis if your investing returns are not there.

I think I will stop replying your messages, as I find you making no sense whatsoever, and the results shows.