Investment grade company, talked to their management team before when M.A.S. is formed.
I like their S.O.P. in doing business .

To me, there are 2 "well"ness in Bursa, one is WELLcall, while the another one is chinWELL hahaha.

Sincerely
CFTrader

My personal opinion was currently, the banks just replacing the CDM (Cash Deposit Machine) to CRM (Cash Recycling Machine)

Let me give you an example...
Before 2015, an outlet might have 4 ATM , 2 CDM , 1 Cheque Deposit Machine and so on.

Currently banks are actively replacing CDM into CRM (eg. 4ATM, 2CRM, 1ChDM)

My personal opinion will be if the bank have excess capital to improve, they will/might will replace the ATM with CRM.

Just my humble opinion, zero cent worth.

Sincerely
CFTrader

I rate 4.8/5 for this company, balance sheet is good, business is acceptable, dividend payout is strong.
It's a very good stock to collect for Intermediate investor...


Sincerely
CFTrader

omgimnoob, you can contact Wellcall's IR ... they usually don't respond to email, as quote from the guy "I'm scared that I'm giving the wrong impression by writing, I would like to clarify through a phone call" .

ps. if you planned to call them, can you inquiry about what they going to achieve with the new JV ? I am lazy to call them , still in CNY mode . :P

SIncerely
CFTrader

I think after all the PR stunt against the government and KLIA2 fees etc, a lot of people are rating Tony you for a grade D... not because my rating is higher than i3lurker, but a lot thinking that you are a D-head.

Lol.

Sincerely,
CFTrader

EPS 1.98c vs 2.04c
Single tier dividend 1.4c vs 1.55c

There is almost 1m of forex gain (i suppose) covered the hike of the material price...
Overall good dividend :)

Sincere,
CFTrader

Indonesia loss is eating into Malaysian profit ... It is not good .. Damn.
Meanwhile, they are paying the dividend at the cost of loan ... I like dividend but I hope it is sustainable.

Sincerely
CFTrader

I lazy to recalculate, but base on last AR2018 , they still have 218.977 M loan amount to reach the ceiling level of 50% gearing ratio.

The acquisition of the "mall" is 208M, which they have maximize the loan amount already.

Sincerely
CFTrader

(1) According to what i had read in the AR2018 , they DO NOT have 300m cash .

Cash and Bank Balance = 8.9M
Deposit with License Bank = 10.9M

Generally speaking it's 20M for cash, and 28M for short term asset.


(2) REITS usually will refinance their debt with the asset as backing. As long REITS can generate income more than
(i) the existing rate - eg. if average rate is 7.0% , and the latest acquisition give 7.5%, that is addictive effect AND (ii) higher rate compared to the cost of fund - which is the loan.

They will be off good with the dividend declaration.

(3) They cannot simply cut the dividend yield, it is MANDATORY for REITS to declare a minimum of 90% NPI to enjoy the taxation benefit. REITS are differerent compared to normal share.


Sincerely
CFTrader

The price of OCK going down is good for us.
We all knew that the recurrent income of OCK will be almost equalvalent to REIT - consistent, recurrent, and predictable.

The lower OCK price is , the better the yield of OCK will be.

I'm optimistic with OCK future performance, but not optimistic with current valuation thou.

Sincerely
CFTrader

sorry, the earliest news 9share informed me that the price is 280m.
It is actually 208m with 7.8% gross rental yield.
Should be additive effect.

Sincerely
CFTrader

9share published an article of KIPREIT.

KIPREIT planned to acquire AEON MALL KINTA Shopping Mall for 280 milllion Ringgit Malaysia.
Previous owner had performed AEI (Asset Enhanced Initiative) for 32 million Ringgit Malaysia.

(Valuation CH Williams Talhar & Wong Sdn Bhd valued the 21-year old structure at a price of 220 million Ringgit Malaysia)

The rental agreement last for 10 years which start from 2015 to 2025, with the yearly rental rate of 16.31 million Ringgit Malaysia.

Sincerely
CFTrader

Ermmm .... Revenue is indeed increased by 8% as CFO informed me.
Revenue stood at 42M
GP is 12.8M (compared to previously 14M
Profit From Operation Exclude One Off Gain is 9.394M vs 10.7M

Margin compression is real ...
In summary :

True Earning : 1.36c
Forex Gain : 0.21c
Hence total EPS : 1.57c

generally, most of the REITS climbed to a level where i deemed it is a bit on the high side ....

Sincerely
CFTrader

malinfan is now salivating because of missing the boat as he/she/it sold at a lower price and now the price had gained to 86.5c.

He/She/It is still waiting for 55c KIPREIT which in my humble opinion , with a probability of 99% he wont get the stock at that price.

Sincerely
CFTrader

My point of view is, the price building is too fast for this counter.
People had expected big profit from this company even thou that the business they involved in has long gestational period.
Expansion is good as it will translate into larger profit, but in OCK terms, if they expand in such pace, they will have another cash-call or required to pay hefty finance cost due to the large capex....

As usual, I won't be touching OCK until i can see the FCF flowing in (i rather play as Telco tower REITs)

Note : Cash stood on 54M , LT borrowing at 177.85M , ST Borrowing at 283M , With interest payment of nearing 20m per annum (effective rate is 4.28%)....

Sincerely
CFTrader

necro always have straight up points of view.
i like to read his comment.

Sincerely
CFTrader

A.S.A. 3 composed of 9.0% of the total net asset value ... so ...

DPU 2.00 cent / 91% x 100% = 2.197
expect approximate that DPU 2.15c to 2.20c

But with this ASA3 occupied, that means it had reached the peak of it's performance i.e. 100% occupancy rate, in other words, no more growth is expected.

1. Cost of Production is increased .... Why ?
- Rubber price is downtrend, but it is not the major cost of production.
- Synthetic Rubber consumption is in fact, higher (5 times more) consumption than natural Rubber.
- Synthetic Rubber price is on increasing trend for the past 9 month.
- Hence, WELLCAL factored in the cost that bought on the higher side.
- Forex issue.

2. Factory 3 issue.
- It is not simple as improve production volume by 70%.
- Factory 3 is divided into 3 parts.
- Part 1 : Mandrel hose production line. - fully utilized
- Part 2 : Spiral hose production line - unsure of utilization rate, they need to secure more customer (customer in this field tends to be loyal/recurrent, hence wellcall claimed that they need extra effort to penetrate this market )
- Part 3 : For sudden demand surge / change in the trend. Currently vacant.

3. Workforce issue.
- has no shortage of foreign worker issue.
- Foreign worker compose of 50% of workforce.
- No problem with KDN.

4. Revenue Growth
- Trailing 6 month order is increased by approximate 7%-8%.
- Largest market is category is Oil,Gas,Water,Air hose production - compose of 60% of the sales.
- Oil and Gas - compose of approximate 40%-45% of the category.
- They securing some US client that involving in the O&G company where they will place recurrent order every 4 month.

Sincerely
CFTrader

At this price, without any substantial cashflow going in, the price of OCK factored in the future growth ...
It must be go lower for investor to take a part in it ....
Currently the valuation is all build in the sky .... and a lot of people believe it ....
One of similar counter is known as TMCLIFE too ...

Sincerely
CFTrader

good company doesn't sell cheaply .

But when it is priced cheaply , be sure to grab it :)

Sincerely
CFTrader

They (Great Eastern) are more likely to be pre-IPO shareholder ... I think they are cashing out .
Please correct me if I am wrong.

Sincerely,
CFTrader

Meanwhile,

1. Kota Tinggi occupancy rate dropped (94.36% -> 91.5%)
2. Senawang occupancy rate dropped (80.32% -> 79.0%)
3. Melaka occupancy rate 67.32% -> 70.00%

KT is considered as 4th largest portfolio , with Melaka as the 5th ... hopefully KT won't drop below the 90% occupancy rate...

Sincerely,
CFTrader

___________________________

They also suffered from rental reversion of average negative 2%... looks like retail segment is still harsh.

Key property will be
1. Tampoi .. occupancy rate is 97.77% -> 97.9% ... maintained
2. Masai .... Occupancy rate from 94.36% -> 95.8% ... good maintained
3. Bangi ... Occupancy rate from 82.32% -> 86.7% ... (excellent)

Reason : The total portfolio of KIPREIT is 580m , which this 3 giants, already consist of 430m worth of asset.

Hence
The shareholder either eat shit or eat good food is fully dependent on growth of Bangi and maintained occupancy rate of Tampoi and Masai.

showing growth but the price is lower than prior to announcement of the good result.
This is so interesting hahaha....

SIncerely
CFTrader

Occupancy Rate - NPI (for the last 4 quarter)
KiPMart Bangi : 82.32% , NPI of 9.466m
KiPMart Lavender Senawang, - 80.32% , NPI of 0.914m
KiPMart Melaka - 67.32% , NPI of 1.586m

They need to bump up the 3 remaining KiPMart Rental rate as far as i concern.... specially KiPMart Bangi as the valuation is the 3rd biggest and shall contribute the largest income to KIPREIT.

Overall i can see some improvement Quarter-on-quarter basis (encouraging result) .

Their effective interest rate is at 4.75% (slightly higher than 4.5% average big sized REIT)

Available credit is at 218m @ interest of 10.40m per annum

The only concern about this company is tenancy expiry profile where most of them are at FY2018, and FY2019... Rental reversion rate is guided at 3%, which I think if the tenant stays, the rental will be just flat...

But overall, they still have a lot of space to fill in @ KiPMart Bangi.

Never thought MMODE will drop until 34cent ...
This is one of my coverage/analysis 3 months back when it was trading at 42c region (If I remember correctly)
_____________________________

There were no adequate info on E&J Incorporation except of the remaining contract sum of Rm 180 million H2O construction contract.

The info that lack of to initiate coverage is :
1. The remaining orderbook
2. The tender that they had sent out / Possibility of securing new project

Usually for a construction stock, we would like to use S.O.P. valuation to calculate it's intrinsic value. Sometime Mr. Market is a fool and mispriced these construction counter (like GKENT) ....

Assume that , Rm 23.571m had being completed, Rm 1.486m as construction profit, (extrapolate it, but shouldn't do it as we shall perform progressive billing method，but neverless, since no extra info is found), the remaining profit yet to be include is approximate RM 9.855m.

Assume that
1. Mobile segment is in breakeven status (erratic performance, bad for valuation, garbage in, garbage out)

2. No more orderbook remaining in E&J Incorporation

My super conservative S.O.P. valuation （cash+ profit from contract) gives you a target of 33.23 cents only.

omgimnoob, i mean, what i noticed is rubber is downtrend on Sep17 to Dec17 , and if not mistaken, SMA20 is their main cost (?) which compose of 50%...

So i wonder why the report recently suffered from increased cost (?) Just want to clarify my doubt. :)

stteck, you are very knowledgeable about PPHB.

I would like to ask your opinion. Removing all the forex factor, what is the organic growth % of PPHB every year ? 10% ? 15 % ?

in reply to dunspace, i have several different view on your statement.

1. Revaluation gain is a paper gain, it's just like " hey, I'm not a millionare, please revalue my house into a value of 2 million so that i can claim myself a millionare" . We the value investor are more concern about real profit, when i say real, i can see the cash flow in. Yes, I'm talking about

2. I'm not quite sure that the increase of cost is due to "heavy investment in PPE" . In the cashflow statement, they just put a "non-cash item adjustment" , but according to the Segment B2, it is due to increase in manufacturing cost. I'll assume it's not due to Heavy Investment in PPE depreciation charge....

3. As per my statement 2.


Regards,
CFTrader

really a commendable result ...
If we ignore all the "other" factors such as other income, PBT stood at 29m vs 23m (YoY basis)

* there is a hike in admistrative cost from 4.2m to 7.6m , and there was a exceptional 5.2m gain vs 1.6m gain this year.
* Hence, the result appears to be flat, but the bottomline is really improving.
* Suddenly the wire mesh segment that they ventured into suffered from profit dips by 70% ...
* DIY Segment doing very well.
* This kind of FCF generation power, 1 more year and CHINWEL will be really debt free (if they choose to repay the debts)


Sincerely
CFTrader

the share result of DNEX's assosiate is really disappointing (PING UK) , but the remaining prospect is quite okay.

Sincerely
CFTrader

1. Oh boi ... today the hype, tomorrow the disappointment ...

2. stteck any reason why 7 million should be the figure but not 1.3 million ?

3. Increase in the manufacturing cost and unrealized loss of foreign currency is the one which dragged down the profit after tax ... this is soften by 1.3m revaluation gain (which is not a real gain) ... If we remove the revaluation gain and focus purely on the operational profit, it is down 40.4% YoY basis ...

Sincerely
CFTrader

@Sleang, do you know/inquiry about which type of cost escalate further up during the AGM meeting ?

I googled the price of natural rubber (which is their main cost) , it appears to be downtrend and i cannot brain the logic of "increase cost" ...

If they suffered from increasing cost due to Factory 3 efficiency then that is a temporary problem... but if their margin is eroded .... well ... let's say that their margin is one of the prized jewel that gives them superb valuation....

Sincerely
CFTrader

@VFTrader, the interest cost start to balloon at a price of 22m / annum already. (comparatively to 10m last year)

And I have concern as their recievable / payable are ballooning in such way that they can't produce a good Cashflow currently....

Continous placement to EPF is not quite a "long term" solution to solve the cashflow problem....

Looks like price is dropping is because of people selling in market.... Fundemendal is intact
I'll keep in mind to absorb KIPREIT when it is the time....

Sincerely,
CFTrader

I would like to invest in PANTECH also due to the 3 monthly-dividend announcement. However, I noticed that PANTECH has a very poor control of FCF or OCF ... ...

Instead of generating more cash, i noticed that they put a lot of the "assets" into the "inventory and receivable" that side...

Any expert of PANTECH can explain the nature of this phenomena ?

Sincerely
CFTrader

all hail JPMorgan

We still need to see the increase in capex of the O&G industry first. With the short lifespan of the hose (3 month need to replace 1 time) , Factory 3 will shine with the 70% production boost.

As a young investor, I'm lucky to have mentors that monitor my progress throughout my life. They give me some experience, exposure and advice if I ever meet some hurdle, but they never help me to solve the problem or give me one lumsum of money and "help" me to solve my problem.

One of my mentor advice is : Study hard, get a job, learn to invest BUT focus on your job and grow your career. The reason behind is, your capital is so small that the investment part will not dictate the future of your capital. RM 10k, even you get a 30% return for the year, just equal to a meagre RM 3k.

After you earned some capital, then the "early learning of investment" will help you. A RM 100k , 20% return is far more better than a RM 10k , 100% return.

I don't know that you will agree to this statement or not, but I shall heed my mentor advice.

Sincerely
CFTrader

good share with high FCF and high dividend payout due to the high FCF.
Moat is there, as Wellcall was able to react and customize the hose required by the customer.
Factory 3 also is in the pipeline.

The only thing I will do is buy when dip for more dividend / higher dividend yield (as lower cost = high yield)

Sincerely
CFTrader

Did anyone researched the recent prospect for CHINWEL ?
The debt is getting lesser and lesser, CashFlow (CF) is getting better and better.

Sincerely
CFTrader

Posted by dariatan > Dec 8, 2017 03:38 PM | Report Abuse

I still think this company will grow because of current market trend of online purchase.

__________________
And because of this , can fetch up to PE 90x ?
No sense right ?

Sincerely
CFTrader

yes, i understood they havent' declared any dividend, and any dividend declaration will bump up it's valuation.

Sincerely,
CFTrader

I believe that the company is a well run company.
However, the profit increament or growth is organic growth - hence it won't able to have those kind of explosive growth which all the Malaysian investors favor of.

I have several doubts for PPHB.
1. The new capex / factory expansion, what is the target / potential growth after the expansion.

2. Will they start to announce dividend to entice the shareholder / or re-value their company at a better valuation.

3. The heritage hotel will commence on which date (so many confusing date 2018 / 2019 ) , and what is the expected "profit" from the investment. If possible, I would also want to know the IRR for the Heritage hotel. The analyst forecast 14m revenue / year ... according to RM 400 / night and 60% room occupancy rate - that was garbage in garbage out.

4. I'll keep close monitoring this company, as a dividend growth seeker, there is no good reason for buying it now.

Sincerely,
CFTrader

Last time when GDEX was priced at incredible valuation, it's PE is nearly 50x.
Now GDEX is valued at PE 90x ... I wonder why and what is the moat or basis GDEX owned, until it could fetch this kind of valuation...

Good result for this quarter. The management targeted 20% increase of revenue, and they can do it.
YoY basis :

Revenue : 43.615m vs 32.3m (+35%)
PAT : 12.751m vs 9.125m (+40%)
NP : 9.87m vs 7.838m (+26%)
EPS : 1.98 vs 1.573 (ex-bonus)
Div : 1.55 vs 1.5333 (ex-bonus）

The reason why their NP cannot grow in line with PAT because of they pay higher tax this quarter (23% instead of the 14% )

The main cost of production of the hose produced by Wellcall is rubber. The higher the rubber cost, the larger the negative impact to Wellcall, but I believe they able to mitigate / pass down the cost to the customer (I have reason for that. Wellcall doesn't produce ordinary hose, but they produce custom hose that suit each customer's demand, and they collect 50% of the deposit from the customer EVEN before start to manufacture the order)

While oil, apparently Wellcall expanded into the O&G sector by providing industrial hose to them. The slowdown of O&G segment affects their O&G hose expansion plan.

Sincerely,
CFTrader

Doesn't matter la...
Just monitor this counter casually is enough ...
When the FCF comes in,
Valuation will change ... (example, HEVEA of 2014)
That will be the big money ...

For now,
sorry, not interested in pumping money for EG.

it is not right issue of the normal share ...
it is issuance of RCPS ... , and every 4 RCPS , gives you another 1 normal share.

RCPS doesn't ranked pari-passu with normal share.
It is ranked higher.