Surprised no reaction to the press release announced on Bursa during lunch break earlier...

I think that's pretty decent news. Brent price at current levels is also still very profitable for the Co. Anything more is a bonus.

Totally knee jerk. Outlay is a small fraction of GENM's total cash pile.

When management provides clarity for the deal, the whole world will jump in to buy again. These guys have been in the business for so long, they see an opportunity. Investors only see the negatives.

1) You can have RM100 of debts. If you CAN'T service it, you're in trouble.

2) You can have RM1b of debts. If you CAN service it, then there's no issue. If your coverage ratios are strong, banks would probably ask you if you want more money.

It's not about how much debt one has. It's the ability to service debt that matters most.

It's a capital-intensive industry. Having huge amounts of debt on the BS is normal. Project-specific cashflows are typically ring-fenced to payoff corresponding debt i.e. the debt pretty much pays itself.

@Sardin, I know Borsig very well. I'm fully aware of German engineering and German culture. But earnings growth drives share price, not assets, not expertise. It's how companies unlock the value from their assets, expertise, know how, tech, etc

It is only in the past couple of years, and after kitchen sinking for FY18, that KNM's management has figured out the best way to utilise its assets ie Borsig. The change of business strategy has finally resulted in KNM reporting meaningful earnings for 1Q19, after 15 consecutive quarters of lousy results. This is significant.

Even you yourself admit, when you said "...signs it is now turning around", meaning recovery in earnings. This is the main reason why KNM's share price has recovered, and possibly combined with Borsig's potential IPO story has pushed the share price up further.

What will sustain the upward share price momentum is improving Q-o-Q earnings and further job wins. What is key, what is most significant are:

1) the recurring income from the Thailand and then later on, Peterborough concessions.

2) transformation into a RE player, a sunrise sector

3) utilising Borsig within the growing RE sector, with much reduced exposure to O&G

From the 1Q19 report:
"The Group’s strategy to diversify its sources of income from project-based contracts to recurring-income businesses in renewable energy industry is still on going."

Must be mindful that Borsig is merely the engineering/tech company. If KNM continues with project-based contracts then Borsig's value will be limited to the projects. Its the change of business model to recurring-income that is the true driver of the turnaround.

I will leave with this question to you Sardin, if KNM announce a loss in the upcoming results, will the share price go up or down? Pls don't say they have Borsig, don't worry, share price will go up because they have Borsig.

LOL you try too hard, Sardin. Assets alone do not move share price.

One can have the best assets in the world, but what truly drives share price is earnings growth. KNM's earnings are expected to improve going forward, that is why the share price is moving. Combined with Borsig's potential IPO, there is an unlocking of value.

Like I've said before, it's also due to management's strategy to move away from lumpy project based revenue streams to recurring streams.

Strategy, earnings growth and corporate proposals (a good story). These move share price.

Nothing fishy la. People are collecting, simple as that.

Why would there be a rejection if the Kazakh assets are now producing i.e. there's cashflows. Just have to convince regulators that they need time to ramp up more production. Also convince creditors that they'll be paid.

Will take some time.

Will goreng again.

Yu and Mee, when you invest, do you look backwards or forward? Earnings are forward-looking.

The announcement by GENM is probably the best news for OWG.

The son is super expensive. Unless mum goes up significantly more, son won't move much.

Besides, many others to play with.

@SuperPanda, agreed its a dump.

Collection before results. Recall how it spiked after results last August. If Co reports a profit, share price could potentially sky rocket again.

I don't have the details; not sure how Reach is loss-making. Its cost/bbl must be really high.

This counter is still super high risk but there is also the possibility of uplifting PN17 following the recent positive outcome with the Kazakh asset.

I bet the relevant parties are working hard behind the scenes to get this Co in order now that there will be some cashflows coming in.

I'm in full agreement with @scrown

@Depeche, gotta always carry out proper due diligence. Always check against the primary source. Those you mentioned are good for reference only.

See quarterly results.

I think KNM share price will rise in tandem with profits.

But need to correct some clowns who like to make baseless claims:

1) NA as per 1Q19 results is RM0.65. NTA is RM0.10. Know the difference.

2) Borsig is a good asset. But one needs to monetise the asset i.e. make profits. The main reason the market is somewhat positive on KNM is because it showed profits in 1Q19 and expected to show profits in coming quarters.

If asset was so good, why the hell did KNM have lousy results for 9 consecutive quarters since 2017? If asset so good, share price decline from RM8 to RM0.07 since 2008? Why?

If people only buy based on assets, they'll effing lose lots of money. It is only when asset is monetised and earnings flows to bottom line, then only share price moves.

The possible reasons KNM is moving:
1) Earnings visibility. Earnings are expected to improve going forward.
2) Corporate exercise - maybe some M&A, listing, etc
3) Contract win - maybe something big

Not because of assets.

@ Sardin: Again, you're missing the point.

1) I never said BORSIG was not capable. In fact, I acknowledge that its huge and I'm well aware of its history

2) If KNM's management did not shift its biz strategy from O&G and project based, even BORSIG wouldn't be able to save the Co. Doesn't mean BORSIG is not big or not capable, just means that management eventually made the right business call.

3) You said KNM bought BORSIG in 2006. This is factually wrong. Clearly states in the announcement below agreement to purchase 100% of BORSIG on 29 Feb 2008.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/738477

KNM GROUP BERHAD ("KNM" AND "COMPANY")

PROPOSED ACQUISITION BY KNM PROCESS SYSTEMS SDN BHD ("KNMPS"), A WHOLLY-OWNED SUBSIDIARY OF KNM, OF 100% EQUITY INTEREST IN BORSIG BETEILIGUNGSVERWALTUNGSGESELSCHAFT MBH (“BORSIG”) FOR A CASH CONSIDERATION OF EURODOLLAR ("EURO") 350,000,000 ("PROPOSED ACQUISITION")

Contents On behalf of the Board of Directors of KNM ("Board"), Aseambankers Malaysia Berhad (“Aseambankers”) wishes to announce that KNMPS had on 29 February 2008 entered into a sale and purchase agreement ("SPA") with the vendors as listed in Table 1 attached (“Vendors”) to acquire 100% equity interest in Borsig, comprising 12 fully paid-up ordinary shares ("Sale Shares") for a total cash consideration of Euro350,000,000 ("Cash Consideration"). The Cash Consideration is equivalent to approximately RM1,669,500,000 based on an exchange rate of RM4.77:Euro1.00.

4) You said "BORSIG was the main contributor to the KNM performance. That is why that time KNM was more than RM8"

This is also factually inaccurate. How can BORSIG contribute to KNM if it was only acquired in 2008?

Also KNM's share price was around RM8 before BORSIG acquisition. Go have a look at the historical charts.

I understand you believe in KNM and want to promote this stock. I also believe in the turnaround story of KNM. But you've got to get your facts right.

Also BORSIG may be a big name in Europe, but it's not like KNM just acquired it yesterday.

KNM acquired BORSIG in 2007/08 at a huge premium and with debt. That royally messed up its balance sheet. If BORSIG is that great, why did KNM's share price fall from RM8 in early 2008 to RM0.07 in end 2018?

Yes, BORSIG is a big name. I acknowledge that fact. But its KNM management's long and arduous shift away from O&G and project-based jobs to WTE and recurring income type. It is the change in biz strategy that is now bearing fruit.

So no. It's not just because of BORSIG because that is not an accurate assessment.

@sardin: I'm long KNM - may not be as early as your 7c but good enough entry for me.

But you miss my point. All I'm saying is that the run up from 19c to 30c can't be due to a small RM36m award. Probably something bigger in store.

RM36m is small. KNM's revenue is north of RM1.0b.

I doubt the run up from 19c to 30c is because of this small time RM36m award.

Continue in English, please.

Kill two birds...make money and improve your English skills.

Haha won RM273m contract and share price doesn't move. Contract larger than market cap.

Actually its fundamentally very cheap.

4.56 cents EPS. Back of the envelope annualisation (I know, I know shouldn't annualise) but for the sake of discussion, that's 18.24 cents.

Conservative 5x PER = TP 0.91

Bear in mind the business is ERP, should trade at a much higher multiple.

Not shares but ICPS.

Stop looking at the past. Look forward.

You now have the top 2 cement-producing companies in the country with significant market share under one roof. With that size surely there'll be synergies and economies of scale and the clout to influence price. Don't forget this also includes Holcim Singapore.

ECRL +BM + other spillover developments will only ramp up demand.

Those TP by IBs are backward looking. Look forward. Earnings are always forward looking.

What happened to the rr88 guy with his prophetic TA analysis?

Seems like he deleted all his comments here. LOL

RM0.245 can take for those who wanna play.

024/0.245 was the previous high. Theoretically should become support at current levels.

Theoretically. LOL

It's never about how much or little debt. It's about the ability to service debt.

Sapura can have 10x more debt. It won't matter as long as it can service it.

You can have 20 properties. Doesn't matter as long as you can service the mortgages. If you can't then default lor.

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Posted by Michael Kwok > Apr 25, 2019 11:22 AM | Report Abuse

Dun forget sapura energy have more debt then Bumi Armada.now it's settle.

As we witnessed yesterday, "huge blocks" can be eaten by the big boys easily.

Q of 25m at 0.255 is merely RM6.4m.

Hence I said, more good news required. Else fundamentally, the company hasn't changed for a re-rating.

Doesn't mean if the market in general is good, or O&G is good, all counters should go up. The good ones would go up, the lousy ones remain depressed.

Armada needs to address all issues for share price to move up. Investors are fed up of the years of missed targets and inaccurate guidance by management.

It was clearly stated in the announcement that the refinancing would incur the Co additional RM40m p.a. That is huge, and would surely put further strain on Armada's already lousy cashflows. This was merely a short term measure to buy some time. The same issues with Armada remain (cashflows, Kraken, idle assets).

I know many here believe it will go up. Perhaps in time, when the management really get their act together, it will go up.

But the point of trading/investing is not to believe, but to make money.

I could be wrong, but unless some other good news is announced soon, I doubt it'll touch 0.28 again.

Anyone who relies on only one indicator is doomed.

TA-trader knows what he's talking about.

Fundamentals addresses the WHY we buy/sell. TA addresses the WHEN we buy/sell.

Some of you don't even know why Inari is falling. Apple announce this after the US closing, earlier this morning (5am Msian time).

http://www.theedgemarkets.com/article/apples-warning-bad-omen-wall-street-bulls

Gotta have patience with this stock. There are profit guarantees.

Only a matter of when the buyers wanna come in. Now or later. Current levels are good to accumulate.

Unless upcoming results is expected to be bad.

I think many are buying and converting and selling mum for arbitrage.

Yesterday was profit taking day. Today and probably Monday are buying/top up days. You should be nibbling and not selling today.

Today's a Friday. Also Thanksgiving weekend. Markets globally will see thin trading or are closed. Why would Bursa be any different?

Supermax's trend is pretty repetitive. The last time profit taking was from 3.72 to 3.48. So now its the same after a strong run up to 4.10.

Anything below RM3.80 is a buy.

KPJ is one of the key beneficiaries of Budget 2019.

Ko beli saham pun judi brader. Beli saham tak tentu arah, judi tu. Haram brader.

Baik you duduk rumah TFK.

Knowing what PE means and knowing how to apply PE are 2 different things altogether. PEs do not apply to all companies and all sectors.

When comparing companies, compare apples with apples, not apples with oranges. LVS has a market cap of USD 44b. GENM has a market cap of USD5b. Revenue is USD13b vs USD2.5b.

Are these 2 companies comparable? They may operate similar businesses but they're not comparable.

Its common knowledge that the govt was going to hit the gaming sector in the Budget 2019. So why cry now when there was so much time to sell above RM4.50.

Now is the time to buy. May see further weakness but it will not hit RM3.18 again. Purely knee jerk reaction to a higher-than-expected gaming tax imposed by the govt.

Stay calm and be the savvy investor. Buy when there's blood in the streets.

I'm looking at 85-87c (August high). If its true that the EDL disposal is expected to be confirmed before budget, then can expect MRCB to easily break the 85-87c levels. Why? Because the real overhang for MRCB is the EDL-related debt on the BS.

Posted by DreamConqueror > Oct 1, 2018 06:49 PM | Report Abuse

And you hv got me wrong. Big time too.

I am not the Conqueror in a Dream. But the Conqueror of Dreams.

---------------------------

Damn, still don't get me. I guess sarcasm doesn't work for the dim-witted.

Posted by DreamConqueror > Oct 1, 2018 06:30 PM | Report Abuse

Mr. BizzyBone, we live & play in the REAL world. Not in some fantasy, rhetorical world.

--------------------

Haha you're right. That's why Im called Bizzybone and not DreamBizzybone.

@DreamCon, selective reading I see.

I said "If" and "consistent". Can someone be that consistent?

I also said I got in early and I'm long.

Gotta learn how to read.

To each their own. No right or wrong trading/investing process. Only those that work for each individual.

If someone can make 3% consistently every day, then over time he'll make a lot. Consistent being the operative word.

My approach depends on the stock itself. In this case, Reach was always going to be a long for me as I got in early.

I have both mum and son and I approach them differently.

The son is, for now, tracking the mum in terms of % gain. There will come a point where the son will take off and will trade at a bigger premium, considering expiry is in 2022, 4 years away.

@B4b4 and EngineeringProfit:

Logged on a month later and our Reach is reaching for the stars. The announcement on last Friday was another huge positive, combined with the soaring oil prices.

Even if oil price falls to $65-$70, Reach should be fine.

Does anyone know what is Reach's breakeven COP?

How is this sale different from an IPO? The objective and net effect is pretty much the same.

This sale, IMO, is better because:

1. Faster turnaround time compared to IPO i.e. address debt issues faster

2. Collaboration with a big name with different market reach i.e. broadens Sapnrg's reach as well

3. Can build the biz with combined entity and IPO later at a better valuation. Market sentiment and appetite not good now i.e. IPO may not be at the best valuations. Best to wait and see if trade war issues subside.

See @ WooJohn, is the current market down purely to trade? Do you know? I don't. What if a couple of other EM countries goes into default? Would the market rebound next week? Again, I don't know. No one knows for sure.

Now this is when I agree with @rr88 though: stick to the trading plan. Safeguard capital to fight another day.

I would be inclined to consider rr88's comments if this was a purely technical market such as say Hong Kong, but KLSE isn't. At least not yet.

TA, as with all trading strategies, is not a sure thing. Else rr88 wouldn't be in this forum trying to convince us he's right by spewing out technical jargon and the like.

If Trump announces right now that all trade tariffs are off, would Supermax rise or fall?

We're not here to see who has a bigger stick. You win some, you lose some.

The announcement clearly states:

"The P2‐ST is currently shut‐in to allow the drilling rig to demobilise from its location before production commences once again in early September 2018."

"We look forward to the start of production from the P2‐ST well by the end of this week as we are in a time of favourable crude oil price levels.”

The above was even mentioned in the notes (note 19) to 4Q18 results.

PROSPECTS OF THE GROUP (CONT’D)
Anasuria Cluster: Drilling of P2-ST

Drilling of a side-track from the GUA-P2 oil producing well on the Guillemot-A field (“P2-ST”) had commenced on 4 June 2018 and is expected to be completed by the early part of September 2018."

So please read do some homework before making inaccurate comments.

Actually if you sold at .31 and buy back at .31 intraday, you made a loss (brokerage). Should be selling at the highs and then buy back when it falls to make intraday gain.

Just my unsolicited 2 cents.

@JeffreyNg

LOL first you say "very weird today.. i dun think is due to long holiday.." and now you buy back @ .31?

Bro if you're panicking don't spread your panic please.

Its a combination of the factors listed below. But the primary factor for Reach is oil price.

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Posted by bizzybone > Aug 30, 2018 04:17 PM |

Long weekend + Month end + North Korea noise again + Emerging markets currency issues + General negative futures globally =

Sell first/Take some money off the table.

Enjoy Merdeka weekend. See you all next week.