If no split no bonus goreng kaki would be gorenged ! So don't simply goreng.

Hei, if no announcement next week would be panic sell !
However , that would not have any impact on the fundamental of HEVEA.

Quality : KESM is not a company with good quality. ROIC is poor at 8% regardless of before or after taking over the Test Division. That means either the management over-invested in the past or they are in a competitive and capital intensive which is normally not a good place to allocate our capital.

Valuation : Valuation wise KESM is cheap. Enterprise Value is as low as 4-5. Investors only willing to give KESM a market cap of 120 million even though the net cash is already close to 60 million and assets are at 180 million.

Cash flow : KESM will definitely survive. 60 million of cash + positive Free Cash Flow.

Investing in KESM is investing in a lackluster company at a cheap price. The risk is that the turn around will never materialize and we suffer opportunity cost. Looking at the low risk associated, I am with NOBY. I will collect some today.

Hold until annual report out, to see my name in the top 30.

The recent quarter result is not good.
I am wondering why the support is still so strong. Somebody seems to look beyond current quarter result.

salted fish may have insider info, but nobody has control over forex [RM　vs　USD]。　Maybe he already abandon his position in HEVEA given the current strengthening of RM vs USD.

http://www.ncahf.org/articles/s-z/sunrider.html
产品我没意见。这人就肯定靠不住。

Icon8888, the loss in the previous quarter has made TGUAN very hard to evaluate. Even though TGUAN is in expansion mode, it is in net debt position of almost 100 million assuming that I ignore the plant and equipment.

I strongly believe Johortin is a better choice.

The 1Bestarinet is mother of all crony. Not only draining our peoples' money, also endanger our next generation. Pray that the Yeoh family go to HELL.

During PP period, the share price will be suppressed so that the buyer gets a good deal. As a result, no point buying VS now. I am still holding VS and plan to add slowly but during the current period I will not buy any, unless VS dropped sharply to RM 3.5 which I think is unlikely.

I think tougher than strike toto for 26 assumptions to actualize. Some more toto this evening already have answer !

From now to june could be dull .

Lee Kuan Yew is a dictator, democracy of Singapore is not that great but at least at the end of the day, Lee Kuan Yew delivered results. Sometimes, that alone is more than enough.

Bonus issue just rumors lah. Looks like some syndicate wants to tumpang VS to make quick,easy money!

No need to come out with so many advertising article for vs. Very hardsell. We just buy and hold and enjoy the ride. VS already has a dividend that will share profit with us.

I own stock of LTKM. A bit shock to learn that LTKM is holding so many property counters as investment. The boss is good in business but seems poor in stock market. Better just distribute the excess cash as dividend to us.

Result not so spectacular lah. Need to compare with previous quarter. Anyway, share price should resume up trend soon.

Assuming no growth, Prolexus worth to collect around RM 1.6 - RM 1.8.
In my opinion growth will not happen in next 4 months.
I will collect if price below RM 1.5. Current value is fairly valued with little upside.

Teoseng management, please focus on the business and cash flow. Ignore the share price. Do not even buyback share. Thank you.

VSI is subsidaries of VS Malaysia. Certain amount of loss will be recognized. Impact is not serious because previous q also loss.

Hatnag, I don't think the date of result release has any correlation to good or bad result. I am still holding a lot.
To me, if the result is 10-15 sen , uptrend will resume immediately.
If the result is more than 15 sen, we will see a big jump. Please take note that big institution have little position in VS. If they are attracted, up trend will be fast and furious.
Only a dismal result of 5 sen will slow VS down.
I decide to sit through the result because my hunch is telling me that the cost of missed opportunity is even higher. There are also rumours that VS hk already turn from loss to profit.

EPS 30 sen is very challenging. I believe 10 - 15 sen is very good. More than 15sen, this stock will be in berserk mode!

Do not look better than hevea or latitud.

I believe raising interest rate will only push US currency further up, which is good for export stock. I do not believe world wide stock market will collapse. The same thing was said when FED stop QE. Now look at what had happened ?

Paperplane, I am not disputing that OEM has lower margin. The point I am trying to bring out is that OEM company in Malaysia will have more growth opportunity than the likes of Padini due to market size.

A lot of people look down on OEM company, saying that OEM company no brand, low margin, no competitive advantages. Only company with brand advantage like Nike, Gillette, Apple is good company. They learnt what was taught in textbook and assumed that was the sole truth.

What they do not realize, was that the textbook used management and business principles mostly from US. While it is true that in US a OEM company is at a disadvantage if compared to the brand owner, the same is not true in Malaysia. Malaysia is a small economy. A company serving only Malaysia will have a limit in its growth. A Malaysia company that is domestic focused such as Old Town, Poweroot, Padini will have limited market to tap.

Over the past 2 years, OEM company in my portfolio has the best performance. Prolexus, Latitud and Magni. Yesterday Magni delivered yet another good quarterly result.

The beauty of OEM company is that they are a proxy to great company serving the whole world. NIKE is not cheap but you can invest in Prolexus or Magni. Keurig is expensive but you can invest in VS.

Cost is always a pressure to OEM company. In the past, most OEM company will prefer China because of low cost. The low cost of China is a distorted situation. The labour in China is higher in quality than Malaysian and rightfully now China is already higher cost than Malaysia. Low value add OEM cannot survive in China so more will move to South East Asia. Some says legal another reason some company decide to shy away from China. On the other hand, China is ambitious and they are aiming industry which are more sophisticated, and have a bigger impact. Garment manufacturing, coffee machine assembly does not look too interesting to a ambitious nation.

VS happens to be at the right place and at the right time. If Keurig was looking for OEM 5 years ago probably VS Malaysia will have no chance. Now it is the time for us to ride the OEM trend. If I am correct this is just the beginning.

Big company like Keurig will not allow all their products to be produced by a single manufacturer or in the same country. Margin will not be a problem and longer term they will eventually identify alternate supplier so that they can get from at least 2 suppliers or more. This is management of BCP [Business Continuation Plan], to protect against natural disasters, labour unrest or supply chain disruption. It is important for VS to secure more OEM or ODM.

If KEURIG is getting 100% from VS, then this is dangerous because the only way to go is down. If however KEURIG is only getting 10% from VS, then the downside risk will be very small. MAGNI and PROLEXUS are two good examples. NIKE will continue to take from them because they only supply a small fraction of NIKE even though NIKE is more than 50% of their sales.

Icon8888, thanks for digging up Ge Shen. Looks attractive.

Are Ge Shen selling the 2 subsidiaries below book value ? It is ok for me to sell loss making subsidiaries below book value. However, if below book value, next quarterly report might look ugly.

Current market cap for GESHEN is 45 million. The enlarged market cap is around 65 million. Assuming the take over is completed, profit of RM 10 million would bring a market of probably 60 to 80 million. Upside is limited unless GESHEN benefits from lower material cost and synergy between the old and new business.

One thing I do not like about GESHEN is the PPE. PPE is more than Depreciation. I have a prejudice against that.

1). I believe it is OK to compare VS against MPI, even though they are different industry. After all they are all dependent on US economy more than Malaysia economy.


2). PE itself could be misleading. If VS and MPI are having similar ROIC, REVENUE, Profit Margin then comparing EV/EBITDA or EV/[Free Cash Flow] is actually not too far off.


3). Certain other qualities that are not visible in the book will be " any more capacity available" ? The more the better, because that means growth will come at a low capex.

High tech does not justify high valuation. Business is still business and after all it is free cash flow that matters.

We cannot compare apple to orange but we can compare a rambutan plantation to a banana plantation to egg manufacturer, provided they are all subjected to the same macroeconomics impact. Market would give different valuation to different. That is exactly the market inefficiency that we should capitalize on rather than shy away from.

I don't think Investah is on the wrong track, just need to be more detail.

The initial excitement for VS has diminished and VS seems to find a firm footing around RM 4.3 to RM 4.4.
BACK TO FUNDAMENTALS : Can VS deliver RM 30 million quarterly profit regularly ?

作者是 ： Nassim Nicholas Taleb.除了是作家，也是著名基金经理。
基本上他是利用 PROBABILITY 和 STATISTICS来操作。他不能称为投资家，比较像风险管理的那一类。读他的书对投资帮助不大，不过能帮你了解人类行为 以及风险管理， 以及为何有钱人是不必买保险的。

The resistance at RM 4.5 seems to be really strong.

I still like VS to focus on OEM business. With OEM business you have opportunity to go high volume to supply the whole world. Fast turn around time, good cash flow, prompt dividend.
As for solar, if it is build solar plant then it is a bit like power plant, looks good on paper but bad for cash flow, like mudajaya. Oh no, not again.....

bigheadsheng, if VS can deliver consistently eps of 15 sen per quarter, RM 7.00 should be no problem. Give it a year to get there.

Murali, I do believe KYY is looking at unloading Latitud, probably for the next 6-12 months. That is the objective of his letter to Latitud : To push up the stock price. Some of his recommendation in fact could be bad for business and for long term shareholder.
As for VS, I think he has yet to collect enough. VS is seriously undervalued.

Murali, I have no idea of Mr koon's agenda. At least he put in effort to have articles posted, containing facts and his judgements. That is already good enough and I would like to continue see him posting. As for ppl suspicious of his motive,go ahead and post warnings, just be civilized and focus on helping decision making rather than abusing this poor old man.

kcchongz, thanks for the analysis. Nice work. Happy investing !

Lohman, if I recommend a stock, do I need to update changes and transaction in a timely manner ? I don't think so. For Jtiasa in particular, there is no changes. To me it is equally poor now and then. Ao you want Mr Koon to let you know before he buy and before he sell ? You might as well give him your account no.
For mudajaya, another example of listening to the insiders and well connected may not be a good idea after all.You would never be able to validate the info.

I would like to see you keep sharing, even though i do not agree with your method of valuation for JTiasa and your recommendation for latitud coporate exercise.

I believe among VS and Vitrox, VS would still be a better choice, even at current price if we compare the fundamentals.

I agree with (1) and (2). As shareholder I want to know the the arrangement for excess cash.
(3) to (6) will not benefit the company in long term.
(6) may casue the company to grow without making profit, which is extremely dangerous.
It looks to me mr Koon put too much attention on stock price.

Rosmah, Vitrox PE too high.

visdonotbuy, NTA is almost a useless measurement. You buy a company for earning power, not asset. Look at Nestle, Calsberg, GAB, Dutch Lady.

Nevertheless, I am not recommending you to buy Latitud. I am selling bit by bit.

Dear Ooi Teik Bee,

My opinion is that the business nature of VS is different from GMCR. VS would not be able to generate revenue as fast as GMCR. Once VS is running at full factory capacity, the growth will slow down. GMCR would be limited by economy while VS would be limited by capacity.

Nevertheless, I think VS is still deeply undervalued. 120 million profit annually, 48 million dividen, 10-15% growth would be enough to push VS beyond MPI. Let's hold tight to our VS and wait for that day.

Lmenwe, Ooi teck bee,
Gmcr has profit growth of almost 300% over past 3 years and now is at a PE of 30+. If Gmcr cannot deliver spectacular growth, PE of 30 cannot sustain and Einhorn will be right. Even if stock price of GMCR
go down, VS is unlikely to follow.VS do not need spectacular growth. As long as VS can continue with 30 million per quarter of profit
we are looking at 120 million annual profit. Assuming 40% dividend distribution, we have 48 million of dividen. If we assume that a dividend yield of 5% is fair, we are looking at around 1billion market cap .

Thanks to murali for digging out old post.

If you pay attention to how Cold Eye and KYY justify their purchase of plantation stock few years ago, one yardstick they like to use is [Enterprise Value]/Plantation Size. The problem of this valuation method is that you tends to select company that has large plantation size and yet not really performing in terms of earnings, or a company that is sitting on large amount of asset but has no idea how to unlock the asset and turn it into revenue/profit. Some people call this a value trap. I　am not sure if it was because of they old age they like assets which is very tangible rather than earnings which is rather nebulous. When you bought a value trap, your potential return could be high, but the time line could be infinite.

When I first saw KYY mention rsawit [and if I recall correctly, he miscalculate the PE], I was really excited because I thought that I missed a gem. After going through the reports, I decide to stay away because I like earnings, I like growth, I dislike asset unless it is in CASH form. I would rather stick with FIMACOR and MKH then.

I am really surprised to read that KYY mention that stock is a zero sum game. This is a very clear hint of his trading mentality. He is definitely different from Cold Eye.

Please be careful with Latitud. Judging from the fact that their revenue drop during Vietnam riot and revenue was flat for past few quarter, Latitud could be already running at full capacity. If you buy Latitud with hope for spectacular growth, you might be disappointed. EPS of 60 SEN a year could be the best Latitud can deliver at current capacity. The driver for Latitud would need to come from better dividend distribution or capacity increase. Capacity increase for manufacturing do not happen overnight. The cash flow for Latitud is still attractive but I believe the upside is very limited without other catalyst.

Paperplane,

I check on VS again, they are not only doing plastic moulding.
http://www.vs-i.com/frame.htm?02/02frame.htm

Paperplane, thanks for your input.

The reason why I think Malaysia OEM could be doing well in future. I post it in Chinese in investalks.


VS market cap 8.7亿，单季能赚三千万。
MPI　market　cap 12亿，单季能赚两千多万。
如果 VS 单季能赚两三千万的变现能够重复再重复，希望有超越 MPI 的一天 。


最近我从新检讨过去两年投资得利的公司如 HEVEA， LATITUD，PROLEXUS，VS，POHUAT，几乎都是同时取得REVENUE 成长。
过去十多年，总是认为中国的工业厂品成本竞争能力比大马强，可是现在这些 OEM， 似乎都往大马，越南跑。我凭空做出一个大胆的假设：
1）。中国劳工成本增加，低附加价值的工业已经开始被淘汰，大马的LOW VALUE ADD 工业也能回春。
2）。中国人能力比大马人能力强，过去二十年中国劳工成本低于大马其实是因为起步晚而造成的扭曲现象。
3）。中国故意淘汰 LOW VALUE ADD 工业，转攻 HIGH VALUE ADD 工业。中国的对手已经不是大马，而是台湾，新加坡，韩国。
4）。 少了中国，大马的对手将是印尼，越南，泰国，土耳其，缅甸。越南迟点将超越大马。OEM　的落点可能会是这些国家。中国可能不屑继续当　OEM。

契机：
１）。　PROLEXUS，　MAGNI　如果长期和　NIKE　合作，做的是全世界的生意。POWEROOT，　OLDTOWN　只不过做局部的区域生意。是否PROLEXUS，　MAGNI　将比　POWEROOT，　OLDTOWN　更加稳定。

２）。　成衣，塑胶，电子代工企业，太阳能生产可能都有机会回春【当然家私大家都已经知道了】。


当然很遗憾的，代表大马无法成为高收入国家。