Short term yes.

Long term, its not. These are not piece of papers. These are companies that make money.

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Posted by Victor Yong > Jan 31, 2020 10:51 AM | Report Abuse

Stock is a zero sum game, u sell cheap then I buy cheap :)

Sarcasm, here's the thing.

This is a cyclical co, spreads will go back up and then go back down ad nauseum.

So the question now is, where are we in terms of the cycle?

I have no idea if this is the bottom, but im buying a bit more every 20% down.

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wernluan Choivo, 03/01/2020 still see you collecting, when you sell ar? :)
Look like price will go below 2.0 for sure in near term, funny is still got so many queue to buy.
30/01/2020 4:26 PM

Phillip,

Not trying to be an ass. I'm being sincere with this comment here.

But that article actually made me want to buy more. Really odd right.

For bursa right now, i quite like PETRONM as you already know.

Currently studying muhibbah.

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Icon8888 What is better ?

Pray tell
30/01/2020 4:41 PM

Turkey before thanksgiving.


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Joon Chan dunoo what you all keep saying dont do, i've maintained my position and netted 40k plus today in contra gain.
30/01/2020 11:13 PM

Got.

Having said that, I would be the first to admit they are probably better deals out there even in the bursa.

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Posted by Icon8888 > Jan 30, 2020 3:45 PM | Report Abuse

Why like this stock so much ? No moat

https://medium.com/proof-of-value/plastic-prices-have-crashed-how-could-investors-cash-in-9e176527617b

This was pretty good

https://medium.com/proof-of-value/plastic-prices-have-crashed-how-could-investors-cash-in-9e176527617b

Loss making co. Plastics spread all time low in dec and will go even lower due to people don't want us plastic bag and straw. Likely to remain so forever!

Sell sell sell on this dead cat bounce!

Scared me a bit. Turns out it was Associate Income.

I expected a small loss, and had thought i completely screwed up my analysis.

Joon,

I'd listen to phillip when it comes to short term trading.


Icon8888,

For other petrochem co's yes. However, those with natural gas as a primary feed stock is a little different. There is a "geographically blessed" component.

IE you need to be in the right place, to do it at the right price/cost. If you're not in the right place, you won't make a profit, as your cost will just be too high.

PCHEM is good, not so much because management is competent etc, but because its a good business due to them being geographically blessed, and their management is not retarded (not smart, but at least not retarded).

I would only worry if they start thinking about going into palm oil, refinery fabrication something stupid like that, which is completely not in their circle of competence.

Haha got other things to buy then.

Bought muhibbah at 1.77


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Posted by CharlesT > Jan 29, 2020 11:12 AM | Report Abuse

looks like ah jon no chance to buy below RM10

Lai lai corona virus going to cause cambodia go bankrupt.

Target TP less than RM1!

Wow.

This is looking delicious.

I don't disagree that much on the business to be honest.

However, when LCTITAN is half the valuation of PCHEM, you do need to think a bit more.

Having said that, my PCHEM position size is actually a little bigger than my LCTITAN one, despite both being relatively small.



PS.
Lets swap financial positions then. =]

I like how someone with RM50m in the stocks, with little leverage is talking as if he's living on knife's edge. One month FD interest on that is enough to put you very comfortably in the T20 household income category. You'd probably need a bit more for travelling.

Every sen of capital loss i incur, takes me further from my "number", which will enable me to never need to work for money again.

Not swapping our ages though.

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Posted by Philip (Can I advise you?) > Jan 28, 2020 1:00 PM | Report Abuse

This is exactly the point. If you were investing in the amounts of money like choivo does, any capital loss he makes is easily recoverable by putting in extra overtime in his job.

For me investing large capital is an added pressure in that the investment itself has to be barred on the a safety of capital point of view, and since I am no longer tied to using profits to live on a daily basis, I am able to take a longer view on things and what to buy.

RainT,

Perhaps you can illuminate me on the incredible engineering and execution ability of GKENT as a contractor?

I have no skin in game on this, but i also want to make money. Can educate me?

Phillip ah,

I only know how to value companies i understand, this one i don't.

But i'll give it a crack anyway.

When i talk to industry insider, for example one of the QS involved for LRT, he tells me, GKENT relied on "cable" for the job. The skill is not above Gamuda.

PDP vs Turnkey
PDP basically Cost Plus Contract. Turnkey, is make it happen within the agreed price. Given a choice, which one will a contractor choose, and which one will be more lucrative? Of course PDP lah, free money mah.

Now turnkey, unless you are telling, me they give them margins in excess of the PDP (in exchange for the risk being taken), ie make it more expensive, i don't see how the 6% can happen.

Water meter business, this one i have no idea. It makes profit of RM20m a year. How certain i am of GKENT water meter business to double/triple in profit, or maintain, i have no idea.

Now im going to be conservative, since i don't know much.

Water Meter: RM25m per year for now until eternity.
LRT2/3: RM60m split over 4 years, (6% of RM1bil).
Engineering: RM0 because i no idea how good it is.
Discounting: 10%.

Using these conservative estimates, its worth about RM300m. Add the cash of RM200m. Its now worth RM500m. Which is right about the current market cap.

Is it worth it?

Yes, only if your analysis of the water meter business is completely on the mark.

And their engineering business is as good as you say.

Now if you would be so kind, could you show proof of this wonderful ability for GKENT in engineering and construction that will allow them to keep winning contracts with nice margin? Better yet, show us who are the competitors, and how is gkent better than them.

In terms of a speculative punt, lets say 1-2 month time frame tops,

EV is still positive i think.

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Ricky Yeo How can the 52 weeks low be considered as the maximum risk? 52 weeks is how long it takes for Earth to circle the Sun, does that tell you anything about how much a stock can or cannot fall?
28/01/2020 12:16 PM

If die die want 10PE stock with 10% div, go buy BAUTO loh

90% payout stock, no industry problem unlike BAT.

Bursa very big leh CharlesT, global stocks even more big. Haha

My estimate for BAT, accounting for potential 10% legal ciggs, is RM4bil.

I want an additional 25-30% discount on top of that.

Current EV is about RM3.4bil. I want pay about RM3bil - 3.1bil EV tops.

So about RM8.6 to RM9 loh.

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Posted by CharlesT > Jan 28, 2020 12:42 PM | Report Abuse

Posted by Choivo Capital > Jan 28, 2020 12:14 PM | Report Abuse

At below RM9, it will be cheap enough for me haha.

ah jon not scare of 10 or 5 percent legal ciggs ah

Not nestle.

its not so much foreigner stocks imho, but change in fundamentals.
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Posted by CharlesT > Jan 28, 2020 12:37 PM | Report Abuse

yeap all high PE foreign holding stocks drops badly

At below RM9, it will be cheap enough for me haha.

I digress.

Its somewhat attractive, but i'm not sure if its far better.

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Philip (Can I advise you?) It is a far better investment than buying into lctitan at these prices.
24/01/2020 4:21 PM

Btw Phillip, you keep talking about this Singapore and hk tender.

I don't see any multibillion rail tender contract tbh. Just a 24m water meter contract. Is that the tender you mean ?

Everytime Phillip talks about gkent, he sounds like he both knows and don't know what he's talking about.

I honestly have no idea idea about this co, if they will make more than 6% or less.

Those who know, you buy lah.

Joon Chan,

What is your understanding of the company?

Until today, i still don't know why i bought a small position in PCHEM.

Its not horrible, but there is so many better ones.

If illegal ciggs are 30% the price of legal ones, with close to zero enforcement, why not? In many cases, even brand also same.

Nobody expected legal ciggs to be just 25% of the market now.

Illegal is 65%, Vape 10%.

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CharlesT is yr assumption of 10% legal ciggs practical?
22/01/2020 3:59 PM

Ok, lets say extrapolated gross profit for the year is RM700m. Now, lets say, revenue drop 40% over next few years.

New Gross Profit is RM420m.

Less nomalized OPEX, RM200m (from the cost cut).

tax 24%, so about RM167.2m profit. 100% div payout.

Discounted at 4.125% (highest fd in msia, MBSB), is about RM4.05bil.

Current Enterprise value, about RM3.9bil.

So got some discount.

If you think unlikely drop 40% over next few years, then its very cheap, otherwise, its ok only.

Same risk analyst who did it when RM30 hahaha.

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CharlesT RISK ANALYSIS
Earnings are forecast to decline by an average of -1.8% per year for the next 3 years

much better than ah Jon's 37.5% cut lah
21/01/2020 12:06 PM

Well, its just an estimate on the bottom for me. Currently, legal ciggs is 25% of the malaysian market.

At another 37.5% down, it will be about 10% or so of the market, i don't see how things can get worse than that.

Currently Australia and Singapore have the most expensive cigarettes in the world, however, due to extremely strong enforcement, illegal ciggs is about 10% of the market.

Well, taking the opposite position, if you have extremely weak and corrupt enforcement, legal ciggs may end up with 10% of the market share lol.

Having said that, if legal ciggs really become 10% of the market share, the profit is likely much lower than that due to worse economy of scale etc.

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CharlesT Whats the basis for yr 37.5% cut to rm200m??
20/01/2020 5:41 PM

Current 320m.
Less 37.5%:120m
Estimated: 200m

I think if it drops another 20%, it would be worth buying.

Now, assuming that long term wise, BAT can only make 200m a year, which is about 38% down from current earnings.

As they pay out all earnings as dividends, valuation becomes quite "straightforward".

This would translate to around a value of RM4.4bil, if discounted at 4.5%. Given current enterprise value of around RM4bil.

You have about 10% margin of safety.

Now, if the Malaysian govt, actually crackdown hard on illegal cigarettes, or even just ban transshipment of cigarettes and only have one port of entry of import of cigarettes, more than half of the problem for illegal cigarettes will be solved, causing earnings to go back up.

The question now is, will the govt do that?

Or is corruption too entrenched, and political will lacking (smokers are a significant part of the voting base)

Well, its looking quite interesting.

If malaysia ban's transshipment of cigarettes, can sailang now

I wonder what is the right price for BAT.

I've been looking at this for more than a year. The price is almost there.

One or two more q of increased losses from RTE its only at 30% capacity and losing 7m, Haha. 60% may lose more than 10m.

The direction and management of the company is right, however, it depends very strongly on how good are they at optimizing the RTE.

70 sen would be an interesting price.

Im not sure how many people are swallowing their own bs here.

However, do note that at the end of the day you are buying earnings, not asset. You're not a liquidator.

JTIASA palm oil land is cheap for a reason. The management is horrible and running them efficiently.

This is starting to smell interesting.

No idea, beyond it should make 200m or so owners earnings (normalized downwards) this year.

Nicely done.

If not for OTB (and to an extent KCCHONG), who is KYY?

Some guy who made some money in hong kong crisis, and would've lost it in Bursa.

Oh yeah, and also, IJM, Gamuda and Mudajaya founder as he will always remind you.

Oil price went up Oct to Dec, but price of finished goods may not necessarily increase in tandem, or higher.

When it comes to predicting quarters its hard to say, unless you know the exact spread movements.

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Posted by sheldon > Jan 3, 2020 9:06 PM | Report Abuse

The guessing game for the 4th qtr 2019 earnings ...

A Loss
B 0 - 50m
C 51 - 100m
D - > 100m

I hate to count the chickens before they hatch or be too optimistic but think this time, we could exceed 100m - D

I'll be damn disappointed if it falls below my expectations. Hoping for the best.

Yeap, they are selling the spectrums. And doing this when 4G is not even fully implemented.

IN any event, 5G requires Fibre backhauls, and even in korea, where wireless speeds are so fast, most people still have fibre fixed lines.

This is one im fine with now.

Bought some while i study abit more.

Icon, 30% even when including your foreign holdings or just malaysia?


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have not bought back jaks, even though I put it in my 2020 portfolio

my real life portfolio slightly different from my competition portfolio

one is real money (protection of capital is important), one is to win (more risk is acceptable)

for example, my real life portfolio almost 30% in Alliance Bank, but in my competition portfolio I put 15% only. This is because I think it is not that sexy and cannot deliver the killer punch

Bought a bit more today.

Increased my position size by another 6%. Now its above 20% of portfolio.

happy new year everyone.

I thought RAPID Pengerang is supposed to start by Q4? Seems quiet, any news?

The thing im wondering is why HLBANK vs PBBANK. Quantitative, PBBANK takes it in my book, qualitatively, They are close, but pbbank is a little better in my book.