commonsense

commonsense | Joined since 2018-08-30

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2019-02-28 17:10 | Report Abuse

Hi siowyf8888,

I actually do have some companies under my watchlist and of which i am currently monitoring. However, i would like to reserve from making the recommendation until i also have some of my inquiries on the said companies answered. But to give an indication, most of the companies under the watchlist are companies that are mostly under the radar of investors and trades at very undemanding PE and PB multiples.

A company that has already ample coverage would be Ewein which i first take notice back in Nov last year prior to 3Q18 result. They still have yet to announce their 4Q18 result but it should be out today. It's a property company in Penang with direct exposure to the Penang Transformation Plan Project. Their City of Dream projects is a collaboration with Zenith construction company which is the main contractor for the Penang Transportation Plan project. Valuation is cheap at less than 5x PE and 0.8x PB.

However, the only issue that need to be clarified is the company's cash flows. Hopefully the 4Q18 result can shed some light on this. That being said, given the undemanding valuation i had already started to buy into the company when the share price fell to below the 55 sens level. I did made recommendation in it's forum back in Nov but i think i might have jump the gun a bit.

Regards.

Stock

2019-02-28 16:51 | Report Abuse

Hi OhYes,

Sorry, i don't actually have any blogs. i find it easier to just leaves comments on the i3 forum.

For the TP i am actually hoping for the market to price MBMR closer to its peers of around 12 to 15x PE. That being said a PE valuation of 10x would already be a big improvement for MBMR. At the current share price the company is only being valued at 5.4x fwd PE (base on a target profit of RM200mil for FY19).

This company has been under the radar of most investors for a long time due to the bad performance of its alloy wheel business of which the management had consistently make impairments on every 3Q and 4 Q of each financial years since FY14. However, management had decided to almost fully impaired the business in FY17 which means there will be low impairment for the alloy wheel business going forward. Any decision to disposed of the business (as to what was told by the chairman) would be a big positive catalyst for MBMR (both in terms of profit and also in terms of working capital needs).

The company had also impaired most of the auto component business under Hirotako back in FY17 as well. Which also means less possibilities of further impairment in the future.

Regards.

Stock

2019-02-28 09:53 | Report Abuse

The company’s revenue has actually remained quite flat since it reaches the peak of RM25.3mil back in FY15. In FY18 the revenue recorded was only RM23mil. What is worst is that profit has actually come down from the peak in FY14 of RM8.6mil to only RM6.3mil in FY18. At the current share price, the company is currently being valued at 30.7x PE which is considerably high for a company that failed to grow both the revenue or earnings for the past 3 years.

The only reason I see to why the company suddenly gets more of the limelight is due to TS Wong (founder of MyEG) exposure in the company. He has a total exposure of around 25%. However, it is still unclear how this will suddenly change the business outlook of Eforce which makes investing into the company now would merely be a speculative trade.

If you are looking to diversify your portfolio outside of Eforce (due to its relatively high valuation) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4 PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

Given the very good result in 4Q18, the company is expected to achieve a profit of RM200mil for the full year of 2019. At the current share price, the company is being valued at a very low PE of only 5.1x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Stock

2019-02-28 08:57 | Report Abuse

Hi AFMGT,

The 4Q18 PATAMI result of RM60mil was a lot higher than what I had earlier expected (I only projected a profit to shareholder of around RM40mil). This brings the FY18 profit to RM166mil. At the current price, MBMR is only being valued at a very undemanding valuation of 6.1x PE.

Another positive aspect from the 4Q18 result was the strengthening of MBMR’s balance sheet with debt falling to only RM145mil vs RM280mil a year ago. The company is currently in a net cash position for the 2nd consecutive quarters.

Free cash flow has also improved significantly which would provide the company with the possibility to reward its shareholders in the future by giving out higher dividend.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

Given the very good result in 4Q18, I am projecting that the company will be able to achieve a profit of RM200mil for the full year of 2019 (this translate to an average profit of RM50mil / quarter). At the current share price, the company is being valued at a very low PE of only 5.1x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Regards.

Stock

2019-02-24 17:04 | Report Abuse

Please take note that MBMR’s 4Q18 result would be out next week. Some investors might be a bit worried given the disappointing earnings results of some other companies last week. However, investors can rest assured that the upcoming result for MBMR would most probably be a good quarter based on the preliminary data that are available to the public.

MBMR profit is highly dependent on the performance of Perodua (via its 22.6% interest in the company). Perodua managed to sell a total of 59,040 cars in the 4Q18 which is an improvement of 15.5% and 10.8% vs 3Q18 and 4Q17 sales respectively. Based on this very encouraging sales numbers, I am expecting the company to deliver a total profit of RM40 mil for 4Q18 which will bring the 2018 full year profit to around RM145mil.

At the current share price, the company would only be valued at 7.0x PE which is low considering the average auto industry is trading at around 15x PE. UMW, who also has an exposure to Perodua, for example, is currently trading at 14 – 15x fwd PE. I just don’t see why MBMR needs to be given a very steep discounts in its valuation when compared to UMW, Bermaz or any other automotive related companies.

FY19 profit growth will be mainly driven by the still high demand of new Myvi, sales of new SUV Aruz and the introduction of the newly revamp Alza in 2H19. Perodua managed to sell 20,100 cars in January 2019 which is a 13.6% improvement vs January 2018 sales.

Stock

2019-02-22 11:38 | Report Abuse

This is a well-run company that has delivered in terms of revenue growth. Revenue grew from only RM815mil in FY09 to RM1.4bil in the 12m ending Dec 18 which represent an average growth rate of almost 6.3% per year. However, the profit to shareholders has relatively remain constant with profit declining a bit from RM129mil recorded in FY09 to only RM117mil in the 12 m ending Dec 18. This is contrary to its other big competitors like Top Glove, Hartalega and Kossan, who has an average profit growth of 9%, 16%, and 13% respectively for the same period. This might be the reason why the market is giving Supermax valuation a discount when compared to the other main glove manufacturers.

That being said, using the 12 months trailing profit of RM117mil, Supermax is still currently being valued at a lofty valuation of 18.8x PE which is considerably high given the company’s failure to deliver consistent profit growth to its shareholder. Any slowdown of profit growth will highly likely affect its share price to the downside even further.

An issue at hand is the now very intensified competition in the gloves industry with demand growth looking to slow down but at the same time, producers are ramping up production capacity at a very high speed. This could potentially result in pressure to the average selling price of Supermax’s gloves (other players as well will be affected) which in turn would negatively affect the company’s profit margin. Here are the top 4 gloves players capacity expansion plans for 2019 (which could extend until 2020):

1) Hartalega: Additional 12.1bil capacity from projects of Plant 5, 6, and 7. Capacity to rise from 32.5bil to 44.6bil (37% increase).

2) Top Glove: Additional 19.6bil capacity from facilities expansion of F32, F33, F40, F8A (in Thailand), F42 (Vietnam) and the new plant in Turkey. Capacity to increase from 55.7bil to 75.3bil (35% increase).

3) Kossan: Additional 5.5bil capacity from new Plant 18 & 19. Capacity to increase from 26.5bil to 32bil (21% increase)

4) Supermax: Additional 3.5bil capacity from capacity enhancing plans strategy which consist amongst others conversion of warehouse to production line (Taiping), replacement of old line to more technological enhance production lines (Sungai Buloh) and building additional factories (Meru). Capacity to increase from 23.7bil to 27.2bil (14.8% increase)

This brings a total of 40.7bil new capacity from the top 4 gloves producers of which 20bil will come in 2019 with the rest in 2020. Hence why some analysts are worried of a potential oversupply in the gloves market in the near future. Big companies like Supermax would potentially be able to fill in their new capacity with demands but it will be at the expense of profit margin.

If you are looking to diversify your portfolio outside of Supermax (due to its relatively high valuation) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 7.0x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results (which should be out by next week) is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 6.0x PE.

Please go through the analyst reports and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-21 13:12 | Report Abuse

Reading the commentaries in this forum, I think some people still think that the company profit is highly dependent on gold price/ outlook. It’s actually no longer the case.

The company main revenue comes from their F&B business, SugarBun and Pezzo. However, a big chunk of the profit actually comes from the limestone business. Gold division only contributes around RM700k of revenue in the 1Q19 (from its operation in Bukit Ibam, Pahang). In 2Q19, total gold mine is only around RM600k (based on the monthly mining report to Bursa).

The rest of the mining revenue, amounting to more than RM3mil in 1Q19 was actually from the sales of limestone which is also the main contributor to the profit of the group. Limestone in general is used to manufacture building materials like cement, mortar and concrete. So, given that the company’s profit is highly correlated to the sales of limestone which depends on the demand for building material, we can actually deduce that Borneo Oil is actually highly correlates with the construction or property industries rather than the gold mining industry.

In 1Q19, the company sales of limestone drop substantially to only 101,00 MT compared to 4Q18 sales of 435,000 MT, a drop of more than 75%. Sales of limestone is expected to be low at least until the return of upcycle for the construction industry (which might not be in the near term). With this in mind, investors need to be prepared for the company to continuously post low profit in FY19.

If you are looking to diversify your portfolio outside of Borneo Oil (due to its weak earnings outlook) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 7.0x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results (which should be out by next week) is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 6.0x PE.

Please go through the analyst reports and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-21 10:22 | Report Abuse

The company’s outlook at first seems to be turning around when it managed to deliver its first ever profit in 1Q18 of RM400k. The trend of the profit initially looks to be on an uptrend with 4Q18 profit growing RM1.6mil. This help the company to deliver its first full year profit of RM3.6mil in FY18. Some investors were hoping for this trend to persist going into FY19.

However, the growth in profit doesn’t seem to be sustainable with 1Q19 and 2Q19 reporting a lower profit of RM1.3mil and RM300k only. Even if we assume that the company’s business can pick up in the 2H19 and the company managed to deliver a total profit of RM4.8mil (meaning 3Q & 4Q results deliver an average profit of RM1.5mil), at the current share price the company would still be valued at a very lofty valuation of 24.8x PE. This is very high for a company that has never been able to deliver consistent profit growth to the shareholders. What is more worrying is that the profit trend is actually looks to be going down especially with the challenging semiconductor industry outlook in the near future.

If you are looking to diversify your portfolio outside of Keyasic (due to its weak earnings outlook and its high valuation) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 7.0x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 6.0x PE.

Please go through the analyst reports and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-20 14:39 | Report Abuse

TDM is not the only plantation company that posted disappointing results in the most recent quarters. If you go through other financial reports, most (if not all) plantation companies are affected by the low CPO price in Jul-Sept period.

In terms of valuation, all plantation stocks are currently trading at a high PE multiple (for those that still managed to record profit) or in TDM case, negative PE. This is reflective of the downturn cycle of the plantation industry. I don't think that the industry will reverse their down cycle anytime soon given the general demand of the commodity is expected to go down in the future. China for example, is negotiating with US to take in more agriculture products from US which would potentially include soybean (or soybean oil). In general, Chinese consumption of oil would not actually go up that much. So the increase of soybean oil import from US to China would actually be at the expense of other oil commodities from other countries (in particular palm oil from Indonesia and Malaysia). Another issue is on the European demand of palm oil which is expected to go down exponentially given the proposed ban of palm oil use in food and transportation industries in the future. They have already agreed to phase out the use of palm oil in transport fuel by 2030. Some countries like France and Norway have already started to move away from palm oil.

With this in mind you need to have a slightly long-term investment horizon when buying into oil plantation companies like TDM as the return to upcycle might not be in the near future. 4Q18 result will most probably still be in the negative territory.

If you are looking to diversify your portfolio outside of TDM (due to its weak earnings outlook) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 7.0x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 6.0x PE.

Please go through the analyst reports and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-19 14:00 | Report Abuse

This is a well-run company that has delivered in terms of both the revenue and profit growth. Revenue grew from only RM572mil in FY10 to RM2.8bil in the 12m ending Dec 18 which represent an average growth rate of almost 20% per year. The profit to shareholders grew from RM143mil to RM482mil in the same period. This translate to an average profit growth of almost 15% per annum. I don’t think anyone can deny the management capabilities in delivering growth.

But the issue with Hartalega is actually on it very rich valuation. Based on the 12 m trailing profit of RM482mil, at the current price the company is being valued at around 38x PE. At this high valuation, most of the growth prospects has already been baked into the share price. Any slowdown of profit growth will highly likely affect its share price to the downside.

An issue at hand is the now very intensified competition in the nitrile gloves segment with demand growth looking to slow down but at the same time, producers are ramping up production capacity at a very high speed. This could potentially result in pressure to the average selling price of nitrile gloves which would affect companies such as Hartalega’s profit margin. Here are the top 4 gloves players capacity expansion plans for 2019 (which could extend until 2020):

1) Hartalega: Additional 12.1bil capacity from projects of Plant 5, 6, and 7. Capacity to rise from 32.5bil to 44.6bil (37% increase).

2) Top Glove: Additional 19.6bil capacity from facilities expansion of F32, F33, F40, F8A (in Thailand), F42 (Vietnam) and the new plant in Turkey. Capacity to increase from 55.7bil to 75.3bil (35% increase).

3) Kossan: Additional 5.5bil capacity from new Plant 18 & 19. Capacity to increase from 26.5bil to 32bil (21% increase)

4) Supermax: Additional 3.5bil capacity from capacity enhancing plans strategy which consist amongst others conversion of warehouse to production line (Taiping), replacement of old line to more technological enhance production lines (Sungai Buloh) and building additional factories (Meru). Capacity to increase from 23.7bil to 27.2bil (14.8% increase)

This brings a total of 40.7bil new capacity from the top 4 gloves producers of which 20bil will come in 2019 with the rest in 2020. Hence why some analysts are worried of a potential oversupply in the gloves market in the near future. Big companies like Hartalega would potentially be able to fill in their new capacity with demands but it will be at the expense of profit margin.

The average profit forecast in FY20 for the 5 different analysts is around RM600mil which means Hartalega is already being valued a lofty valuation of 30.5x fwd PE.

If you are looking to diversify your portfolio outside of Hartalega (due to its high valuation) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 7.0x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 6.0x PE.

Please go through the analyst reports and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-19 10:47 | Report Abuse

This is a company that has been recording losses for the past 13 consecutive quarters. 9m18 result was a loss of RM24mil. 4Q18 will most likely be another loss quarter. Investors that think the company can suddenly turnaround and post profit might be having some wishful thinking there. Given that the operating environment has actually become a lot tougher in 2019 and given that the company still is being managed by the same people, I highly doubt they can suddenly post better results in FY19. Investors need to be prepared for another full year loss in FY19.

A more pressing issue is the liquidity of the company. The company has a current liability of RM140mil (of which RM104mil is in short term debt) as of Sept 18. However, it only has RM97.5mil of current asset (of which only RM16.7mil are in the form of cash reserves) which signals an issue of lack of capital for the company to service its immediate debt obligation. It will need to raised cash soon. The sales of the Miri land to CMS Cement Industries for RM26.5 mil would help but will not be enough to pay off the current debt obligation. More land sales need to be done or at worst the company will need to raised the capital via equity (potentially a right issue exercise).

If you are looking to diversify your portfolio outside of Sealink (due to the weak earnings outlook and capital liquidity issues) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 7.0x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 6.0x PE.

Please go through the analyst reports and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-18 16:54 | Report Abuse

This is a company that has failed to deliver any meaningful profit to its shareholder for the past 10 years. The company had only managed to post a small profit back in FY 11 and FY13. The rest of the years, the company would normally deliver a loss to the shareholders. Those that think the company can suddenly deliver substantial profit in FY19 might be putting too much hope on the management abilities.

The management decision to acquire a stockbroking business in HK has also put in question the focus of the company. To move from property and furniture industries into the stockbroking business in HK will not be an easy thing to do. Those investors that believes the company can quickly attract customers and deliver profit need to understand that the current stockbroking environment in Hong Kong is already saturated. There are already 563 license stock brokers in Hong Kong with the top 100 brokers controlling more than 95% of the market. Quest Stockbroker Ltd (the entity that Tiger is interested in) will only be one of the 463 brokers that are trying to chase the remaining 5% of the market. Not sure if there will be a lot of profit to be make given the intense competition to chase for customers.

If you are looking to diversify your portfolio outside of Tiger (due to the weak earnings outlook and doubtful business strategy) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-18 12:53 | Report Abuse

This is a potential PN17 company in the making. It is just a matter of time before they will be put under the PN17 status given the company’s continuous losses recorded since FY17. 2Q19 marks the 10 consecutive losses to the group. Investors need to expect further losses in the near and mid-term.

The recent news on Scomi Rail (wholly own subsidiary) defaulting on their RM202mil loan to Maybank will just accelerate further Scomi’s imminent fall into the PN17 status. Investors need to take note that defaulting on a loan is one of the events that forces listed companies to be put under PN17.

What is worst is that one of the collaterals being given for the loan is a 206 mil shares of Scomi Energy (Scomies) representing 8.8% interest in Scomies. If the ownership of the 8.8% interest is transferred to Maybank, this would mean that Scomi exposure in the company would fall from 65.6% to only 56.8%. Scomi would still be able to consolidate the balance sheet of Scomies but the equity value would fall.

As of Sept 18, Scomies has an equity of RM 533mil of which 65.6% is owned by Scomi. This amounts to an equity of around RM350mil to Scomi’s balance sheet (given that Scomi equity to shareholders is only RM316mil, it would mean that the company other businesses besides Scomies actually carries a negative equity value in Scomi’s balance sheet). A reduction of 8.8% interest in Scomies would see Scomi total equity to shareholder drop by RM47mil to only RM269mil which represent only 40% of total shareholder capital. A fall below 25% would automatically put the company under PN17 status.

Please take note that the balance sheet of Scomi Group itself can already be consider as overvalue. As an example, the total market cap of Scomies is only RM 130mil which means Scomi 65.6% in Scomies is only worth RM85mil in the open market. There is a high potential for the group to be force to impair/ writedown some of their assets which would mean lower “equity to shareholders” which itself would bring the company closer to the 25% shareholder capital limit.

The biggest risk of investing in a PN17 company is the delisting of the company from Bursa. Perisai Petroleum is the most recent example of this.

If you are looking to diversify your portfolio outside of Scomi (due to the risk of falling into PN17 status) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-18 10:45 | Report Abuse

This is a very speculative play stock given that the company has actually a very weak fundamental track record at the moment. However, the company has a potentially lucrative arrangement with Sukaniaga Sdn Bhd (of which Orion owns 10% interest).

On October 2018, Sukaniaga has a service level agreement to develop the E Angkasa Az Zahara loan application system for MyAngkasa Holdings, a wholly own subsidiary of Angkatan Koperasi Kebangsaan Malaysia (not sure if it was based on open tender of direct award). Sukaniaga will earns a fee for its service based on the volume of loans and loans amount that it processed and approve under the system. The system will be developed (and actually operate) by Ganda Integrasi (which is a wholly own subsidiary of Orion). Ganda will earn 85% of what Sukaniaga received as fees for the system.

Currently Orion is proposing to acquire another 10% interest of Sukaniaga Sdn Bhd for RM10mil (valuing the company at RM100mil) from THO Travel Sdn Bhd. Upon completion the company will hold 20% interest in Sukaniaga. Effectively upon completion of the additional 10% interest of Sukaniaga, Ganda will have a total of 85% + (20% x 15%) = 88% rights to the fees paid for the loan system.

If you ask me, the deal with Angkasa is a bit dodgy given that Sukaniaga is actually receiving 15% of the service fees for just winning the contract. Effectively, it would have been a lot cheaper for Angakasa to directly award the contract to Orion. Sukaniaga has a share capital of only RM100k. Shareholders of Sukaniaga consist of mainly Ahmad Khir Bin Dato Haji Khairuddin (22.5%), Titian Kotamas (57.5%), Ganda Integrasi (10%) and THO Travel (10%). From here you can see that the shareholders of THO Travel (Sheikh Ahmad Nafiq Bin Sheikh A Rahman and Nor Fariza) will already make a very high profit of almost RM10mil for their initial investment of only RM10k in Sukaniaga.

Anyway, Orion has proposed for a private placement exercise to raised approximately RM17mil of which the usage of the proceeds are:
1) Acquisition of 10% of Sukaniaga from THO Travel. RM10mil
2) Development of the Angkasa system. RM3.2mil
3) Renovation of office. RM1.5mil
4) Staff costs relating to Angkasa system. RM1mil
5) Marketing of Angkasa system. RM1.5mil
6) Expense for Private placement. RM800k.

This is a bit of a red flag. Given that the cost to develop the system is only RM3.2mil. I just feel that there might be a potential review of the contract awarded by Angkasa to Sukaniaga by the government (as what had happened with Prestariang with their Skin contract). Investors need to take note.

If you are looking to diversify your portfolio outside of Orion (due to potential review of contract by the government) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-17 16:14 | Report Abuse

TM business operations has become more challenging given the very high competition in the market coupled with a stricter regulatory environment from the new government. The government has put on pressure on most broadband providers in particular TM to lower the price of their service offering but at the same time increase the service quality. This will only reduce TM’s future revenue and increase its operational cost which in the end will lower the company’s profit margin. Some of the issues currently faced by the company are:

1) Mandatory Standard on Access Pricing (MSAP) which resulted in the price offering of TM’s products to fall by an average of 40%. Revenue in general is expected to fall with profit margin to follow suit. The full impact of MSAP will be seen in 4Q18.

2) The emergence of new competitors in TM’s profitable broadband space will also put downward pressure on the company’s future profit margin. TNB for example, has already started its National Fiberisation and Connectivity Plan pilot project in Jasin Melaka back in January. Under this project, several internet providers (Astro, Celcom, Digi, Maxis and City Broadband) will offer broadband packages to the public with pricing that are a lot lower compared to what TM is offering. The lowest is City Broadband (subsidiary of TNB) which offer a 50Mbps broadband service at only RM79/month vs TM’s 30Mbps Unifi (with 60GB cap) of RM79/month. Potential loss of customers to lower price competitors.

3) Potential pressure to lower the Streamyx prices given that the service currently has an average RM/Mbps that is a lot higher than the Unifi service. Given that the Streamyx clients are mostly located outside of the urban community (which has lower average income), the government might want TM to do this as soon as possible. That being said, TM is putting a lot of its efforts to convert these Streamyx clients to Unifi. However, it is still not yet possible for most Streamyx’s clients due to lack of broadband infrastructures near their locations.

Average profit projections for FY19 from 8 different analysts is around RM634mil. At the current share price, this would value the company at around 17.2x fwd PE which is still high given the potential negative profit growth rate (or at best rather flattish profit growth) for the foreseeable future.

If you are looking to diversify your portfolio outside of TM (due to its weak earnings outlook and relatively high valuation) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-17 11:43 | Report Abuse

A consistently loss-making company for the past 10 years. The only time the company managed to irk out a small profit was in FY18 and that was only because of a gain from financial asset investments of RM2mil. Excluding that, the company would have also end FY18 with a net loss to shareholders.

The company business in hardware and software solutions does not look great with 12 months trailing revenue of only RM1.5mil. Management has indicated that the outlook for their business will be very challenging in the near term.

Since end of 2016 it seems that the company is shifting its capital allocation to the hotel business via their 20% investment in CLI Investment Ltd which is focusing on a hotel development in Taiwan. CLI is in the process of refurbishing and converting a 14-storey apartment building in central Taipei into a hotel. In total DGB has invested a total of RM10.2mil in CLI. That being said the hotel will only be complete in the 2H of 2019. Investors need to be prepared for further net quarterly losses by DGB in the foreseeable future.

If you are looking to diversify your portfolio outside of DGB (due to its weak earnings outlook) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-17 08:19 | Report Abuse

I would see the conversion of ICPS as a neutral event at the moment.

Existing shareholders are actually getting diluted in terms of shareholding percentage but given the conversion price is at 12 sens per share (either via adding 6 sens per ICPS or by surrendering 2 ICPS for every 1 ordinary share received. The latter being the most probable case), there will not be any downward price adjustment to existing shareholders. That being said there is actually no cash payment being made for the conversions (most if not all are based on the surrendering of 2 ICPS per 1 ordinary share). The ICPS actually don’t carry any dividend payment.

Why would the ICPS holders convert now? The most probable reason is due to an arbitrage trading opportunity that appeared even at the first day of trading of the ICPS on 3rd Jan 19. The ICPS traded at between 6 sens to 8 sens per share while the mother shares traded at between 29 sen to 36 sens on the same day. Theoretically, original ICPS holders will be in the money when the mother is trading above 12 sens. They will not make money on trading the ICPS (Tatgiap PA) unless it is above 6 sens. For the first trading day, the original ICPS holders would most probably want to convert the ICPS to mother and then sell the mother later. If price were to remain constant at the closing price of 36 sens, they would have pocketed 12 sens per ICPS via conversion rather than selling the ICPS directly which only can make profit of 2 sen max. However, to convert ICPS it will normally take 1 – 3 weeks depending on your broker and the company secretary efficiency. The first block of new shares from ICPS conversion were issued on 14thJan when price traded between 14 to 18 sens. Most traders would have taken the opportunity to sell their shares for immediate profit. This trade is relevant as long as the share price is above 12 sens (which ended on 16 Jan).

Beyond that date any original ICPS holders would be losing money if they decide to convert and sell the mother shares later (given that it would be below their original investment of 12 sens). However, there is still some arbitrage trading opportunities for those that are willing to take the 1-3 weeks conversion duration risk (during this time, they could not do any trading). Since 16 Jan, the mother shares has been trading at below the 12 sens with the lowest being 9 sens. On average, the trading range is between 9.5 sens and 10 sens. The ICPS on the other hand has been trading at between 4.5 sen and 5 sens. A trader can make a gross profit of 5.6% if he buys the ICPS at 4.5sens, convert it to mother shares (2 ICPS for 1 mother shares at cost of 9 sens) and sells the mother directly upon conversion at 9.5 sens. If the trader managed to sell it at 10 sens, he would have maker a profit of 10.2%. But again, there is a risk during the conversion period of 1-3 weeks when the trader could not do anything. If the mother price fell at below 9 sens, he would end up in a loss-making trade. More than 200 mil new shares were issued from conversion of the ICPS since 3rd January.

But again, this is all arbitrage/ speculative play. In terms of fundamental, Tatt Giap is still not a very appealing investment option. The company is still considered as a loss-making company with liquidity issues. A big portion of the recent fund-raising exercise, which managed to raise around RM41mil, was supposed to be used for a property development project which has a GDV of RM139mil with potential gross profit of RM35mil. That has since been put on hold with the land now being leased to MGudang for RM4.2mil per year for a lease period of 2 years. The funds are now being proposed to be diverted to fund a subcontracting works which was awarded by Dynaciate group (the major shareholder). Not sure if the subcontracts will end up with delivering profit to the company’s bottom line. Investors need to be prepared for the company to still record losses for the foreseeable future (at least the 4Q18 and 1Q19 results until the subcontract work starts. Not sure when).

If you are looking to diversify your portfolio outside of Tatt Giap (due to its weak earnings outlook and liquidity issues), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Good Luck

Stock

2019-02-13 12:55 | Report Abuse

The 9m18 result for IWCity was a loss of RM8.2mil. 4Q18 result which is expected to be out this month will most probably record, at best, a very small profit. Given the depressing market condition for the property industry, investors need to expect potentially similar disappointing results in FY19.
What is more worrying in on the liquidity issues face by the company. Even though the company has a cash reserves of RM45mil, a big portion of that cash (RM41.5mil to be exact) are pledge to the banks. Which means the free cash that the company can used for operations are only RM3.5mil.

The sales of lands to Greenland Tebrau back in FY17 for RM2.4bil seems to be facing issues of payment from the buyer. Till now the delays of payments for the 2nd, 3rd, 4th and 5th installments have been pushed to 15 Jan 19 (already passed but company has yet to make any update announcement). The 2nd installment was supposed to be made on Oct 17. Total payment received as of end 2018 was only RM46mil (which was the initial payment made on July 17). This raises doubts on the whole deal.

The company would potentially need to raised capital soon given the depleting cash reserves with right issue being the most probable option (unless they managed to get the payments from Greenland Tebrau).

If you are looking to diversify your portfolio outside of IWCity (due to its weak earnings outlook and liquidity issues), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.7x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.7x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-13 11:59 | Report Abuse

Someone asked me about E&O. Just sharing for the benefit of others. Feel free to correct any mistakes found.

Regards.

Hi qqq3,

I actually made a comment on E&O back in January. But it was mostly on its valuation. Back then it was trading at around RM1.07 or a market cap of more than RM1.4bil which i thought was a bit on the high side given it's earnings outlook for FY20 (projected profit of around RM70mil). At that price it would have translated to a fwd PE of 20.7x which is a lot higher than the average property industry PE.

Just like most other property companies, E&O is currently trading at a discount to its book value. That being said, if you still like to have exposure to the property industry, i think you can find better value companies at the moment. As an example, there is a property developer in Klang Valley that is also trading at below 0.5x PB just like E&O. However, the company balance sheet is a lot stronger, with cash that represent 25% of the company's market cap and with zero debt. Some of the lands in the company's book has not been revalued for more than 20 years with market value estimate to be more than 10x what it recorded in the books. There are even some property companies that currently trading at below 5x PE and below 0.5x PB albeit at a market cap that is a lot lower compared to E&O. Most of the value property companies are in the mid and small cap.

I was a bit surprise with the company announcement of the right issue exercise as i thought any future funding can be done via the sales of assets/ reclaim lands. Anyway, if you decide to buy into E&O today, i would advice you to subscribe to the right issue to prevent any future dilution and also be able to benefit from the issuance of the free warrants. Given the minimum target amount to be raised from the exercises is RM250mil and the and assuming the private placement can raised 10% of the current market cap (translating to around RM130mil), the right issue will need to raise around RM120mil. This means you will need to be prepared for an additional cash investment of at least RM0.09 per share (based on the 4 ordinary shares to 1 rights, the price of the rights would be RM0.37 per rights). Basically if you buy the stock at RM0.85 today, you will need to prepare another 9 sens for your future right issue subscription. Which means your total investment into E&O is actually RM0.94. Again this is based on the minimum case scenario. The maximum case is for the company to raised up to RM550 mil, again assuming the private placement raises RM130mil, this would mean the right issue needs to raise around RM420mil. This translate to an additional RM0.32 per share (or right issue at a price of RM1.28 based on 4 ordinary shares to 1 right issue ratio). This would mean your total investment of E&O is actually RM 1.17 per share.

However to entice investors to subscribe to the right issue, most of the time the company need to price the right issue at a discount to the price of the ordinary share ( if not people might not want to subscribe). Assuming the price of the shares ends up at around RM0.90 before the price fixing date, and assuming a discount of around 10%, i would assume the most optimum case is for the company to fixed the right issue price at around RM0.80 (the company would end up raising around RM400mil of cash from both the PP and RI exercises). This would mean you need to prepare an additional RM0.20 per share of your original investment of RM0.85 bring your total investment in E&O to RM1.05.

In conclusion, you need to make sure to prepare at least 20 sens extra per share for you to subscribe to the right issue.

Sorry for the long post. Hope you understand it.

Good luck.

Stock

2019-02-13 11:51 | Report Abuse

Hi qqq3,

I actually made a comment on E&O back in January. But it was mostly on its valuation. Back then it was trading at around RM1.07 or a market cap of more than RM1.4bil which i thought was a bit on the high side given it's earnings outlook for FY20 (projected profit of around RM70mil). At that price it would have translated to a fwd PE of 20.7x which is a lot higher than the average property industry PE.

Just like most other property companies, E&O is currently trading at a discount to its book value. That being said, if you still like to have exposure to the property industry, i think you can find better value companies at the moment. As an example, there is a property developer in Klang Valley that is also trading at below 0.5x PB just like E&O. However, the company balance sheet is a lot stronger, with cash that represent 25% of the company's market cap and with zero debt. Some of the lands in the company's book has not been revalued for more than 20 years with market value estimate to be more than 10x what it recorded in the books. There are even some property companies that currently trading at below 5x PE and below 0.5x PB albeit at a market cap that is a lot lower compared to E&O. Most of the value property companies are in the mid and small cap.

I was a bit surprise with the company announcement of the right issue exercise as i thought any future funding can be done via the sales of assets/ reclaim lands. Anyway, if you decide to buy into E&O today, i would advice you to subscribe to the right issue to prevent any future dilution and also be able to benefit from the issuance of the free warrants. Given the minimum target amount to be raised from the exercises is RM250mil and the and assuming the private placement can raised 10% of the current market cap (translating to around RM130mil), the right issue will need to raise around RM120mil. This means you will need to be prepared for an additional cash investment of at least RM0.09 per share (based on the 4 ordinary shares to 1 rights, the price of the rights would be RM0.37 per rights). Basically if you buy the stock at RM0.85 today, you will need to prepare another 9 sens for your future right issue subscription. Which means your total investment into E&O is actually RM0.94. Again this is based on the minimum case scenario. The maximum case is for the company to raised up to RM550 mil, again assuming the private placement raises RM130mil, this would mean the right issue needs to raise around RM420mil. This translate to an additional RM0.32 per share (or right issue at a price of RM1.28 based on 4 ordinary shares to 1 right issue ratio). This would mean your total investment of E&O is actually RM 1.17 per share.

However to entice investors to subscribe to the right issue, most of the time the company need to price the right issue at a discount to the price of the ordinary share ( if not people might not want to subscribe). Assuming the price of the shares ends up at around RM0.90 before the price fixing date, and assuming a discount of around 10%, i would assume the most optimum case is for the company to fixed the right issue price at around RM0.80 (the company would end up raising around RM400mil of cash from both the PP and RI exercises). This would mean you need to prepare an additional RM0.20 per share of your original investment of RM0.85 bring your total investment in E&O to RM1.05.

In conclusion, you need to make sure to prepare at least 20 sens extra per share for you to subscribe to the right issue.

Sorry for the long post. Hope you understand it.

Good luck.

Stock

2019-02-12 14:39 | Report Abuse

This is a company that has never been able to deliver substantial enough profit to its shareholder for the past 10 years. In FY17 the company posted a net loss of RM3.4mil to its shareholder. In the 9m18 the losses were at RM2mil which is a bit better compared to last FY17. Expect 4Q to still deliver a net loss to investors.

Those who think that Euro Holdings can suddenly deliver a substantial enough profit for its shareholder in FY 19 might be having some wishful thinking. I would define a substantial profit to be around RM4mil to give the company a PE of 12x at least. Given the challenging market outlook for both the furniture (due to higher operating cost environment) and property industries, I would think that the best result that the company can achieve is a very small profit of less than RM1mil in FY19. The most likely outcome would still be net profit loss to the shareholders.

If you are looking to diversify your portfolio outside of Euro Holdings (due to its weak earnings outlook), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.7x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.7x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-12 12:24 | Report Abuse

Hi Icon,

Gongxifacai to you too. Hopefully after the 4Q18 result, market will start to take notice of MBMR.

Too cheap for a company that has exposure to Perodua. Just look at UMW, the other company with exposure to Perodua. They are trading at more than double to that of MBMR.

Anyway, hope you make a lot of money this year.

Good luck.

Stock

2019-02-12 10:56 | Report Abuse

Hi Lim,

I would not worry too much in terms of MBMR financial performance going forward. 4Q18 is expected to deliver good results driven by Perodua car sales numbers (refer to my earlier post).

In January, Perodua managed to only deliver 1,025 Aruz mainly due to delays in registration process. Bookings as of Jan for Aruz was 8,000 units. The issue has been solve. As of today, a total of 4,000 Aruz has already been delivered. I would expect better car sales numbers in Feb.

As mentioned earlier, FY19 growth would mainly be driven by growth in Perodua sales of which Aruz will contribute to a better profit margin mix to Perodua and indirectly MBMR. My target profit to shareholder for FY19 is RM170mil which would meant at the current price the company is only being valued at a mere 5.7x PE.

If the company managed to disposed off the Alloy wheel business, expect a further boost in profit by at least RM15-20mil per year post disposal. More importantly the more free cash that the company would have post disposal (from less working capital needs) which could be used to reward shareholders by better dividend payment. There should not be any more impairments for the business given that the remaining asset value (RM35mil as of Dec 17) for the alloy wheel is mainly related to the land value (which normally you don't impair). All the major impairments were done back in FY17.

Regards,

Stock

2019-02-11 12:58 | Report Abuse

The company has never been able to deliver a full year profit for the past 10 years. 2017 saw the company’s revenue jump substantially which was mainly due to the launch of their new ecommerce platform.

That being said, the high revenue from the ecommerce business did not translated to a more consistent profit to the group. Profit to shareholders is still lumpy with 9m18 registering a profit of around RM600k only. However, if you exclude all the one-off items (impairments, write off, gains on disposal etc), the 9m18 result would have been a negative of RM200k. Investors need to be prepared for the company to still post core net losses in the FY18 and potentially in FY19 as well.

Still not sure how the company will be able to compete with the likes of Lazada, 11th Street, Shoopee and Mudah which all are expecting to invest more aggressively in their platform development in 2019. Lazada alone (which is backed by Ali Baba) is expected to spend more than RM1bil in capex for 2019.

If you are looking to diversify your portfolio outside of AppAsia (due to its weak earnings outlook), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-11 11:28 | Report Abuse

Hi Ameera,

For a stock to increase in price it will need some positive catalysts to do so. This normally comes from either fundamental related catalysts (earning growth, value emergence etc) or speculative related catalysts (corporate exercises, privatisation, potential contract awards, emergence of new major shareholders etc). Cuscapi has neither any speculative or fundamental catalysts in the near future to help the share price move upwards.

In terms of financial performance, the company has been recording consistent annual losses since FY13. For 9m18, total losses to shareholders has already amounted to RM12.3mil. Expect FY18 to end with a total loss of more than RM15mil.

Management decision to venture into the China market has yet to bear any fruits. The division posted a total of RM8mil PBT losses in the 9m18 a slight improvement vs 9m17 PBT result of negative RM8.5mil. I think some investors might be putting too much hope on the management’s abilities to suddenly deliver substantial profit in FY19. This might proof to be a bit of a wishful thinking by the said investors. Expect the company to continue posting losses in FY19 dragged by mainly the China business.

If you are looking to diversify your portfolio outside of Cuscapi (due to its weak earnings outlook), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-11 09:20 | Report Abuse

Previously, I think some investors were getting a bit bullish on the company especially when it managed to post a full year profit of RM3.5mil to its shareholders in FY17. Prior to that, the company has consistently posted losses to its shareholders since FY12.

However, it seems that the company had failed to maintain the positive momentum from FY17 going into FY18. The company had failed to deliver the expected profit to shareholder in the 9m18 and was only able to record a loss of RM1.1mil to the shareholders. 4Q18 would most probably post losses as well given that historically, 4Q normally deliver the worst quarter for the company. I don’t think that FY19 would be any different from previous the years’ performance.

If you are looking to diversify your portfolio outside of Focus Dynamics (due to its weak earnings outlook), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-10 21:55 | Report Abuse

I don’t think investors have any doubts on IHH management team capabilities to operate the vast hospital networks under the company’s brand. The team which is led by Dr Tan has a proven track record of delivering growth for both the revenue and profit to shareholders. In FY13 the revenue and core profit were only at RM6.8bil and RM650mil respectively. For FY18 the company is expected to deliver a revenue of around RM11.5bil and a core profit of around RM850mil. This translate to an average growth rate of 11.1% for revenue and 5.5% for core profit to shareholders. For FY19, analysts are projecting IHH to deliver a profit of around RM990mil driven by growth from mainly the Indian, Turkish and China markets.

However, the issue with IHH has always been its very high valuation. At the current share price and using the projected profit of RM990mil for FY19, the company is already being valued at 50x forward PE. Any future profit growth would have already been baked into the share price with limited room for any profit disappointments. A doubling of profit to RM2bil for example ( not in the next 5 years in my opinion) would still value the company at around 25x PE and this is assuming share price remain constant.

If you are looking to diversify your portfolio outside of IHH (due to its very high valuation), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-10 10:15 | Report Abuse

Hi calvin,

I actually agree with you that the best time to enter into an investment is when people are most pessimistic on the asset/ shares. This is especially true for cyclical type of companies like those that are in the business of commodities (like steel, oil and gas players etc) or business that is highly correlated with the economic cycle of a country (property and banking companies for example). At the bottom of the cycle, you can actually find companies that are trading at way below their intrinsic value which theoretically would prove ample margin of safety for those that invest in the company at that point of time.

However, I am just not sure that Talam Transform falls under this category.

Some people would think that with a lot of lands under its books, the company can always try to sell them in order to raise cash. But given the current market condition, it might be a challenge for the company to do so rapidly and at a favorable valuation. The recent Serendah lands disposal exercise that was announce last month for example. Based on the details of the deal, Talam’s total cash payments would still be dependent on the take-up rate and the progress billings of the projects on those lands. If the projects on the disposed lands fail to attract buyers, the company will then be paid via completed properties later which would only add more unsold inventories to the company’s balance sheet. Basically, raising cash fast by selling lands in order to pay off its obligation might not be feasible. Based on the 3Q19 report, there are around RM120mil of assets (mostly lands) held for sale.

Based on the company’s 3Q19 result, there is a total of RM33mil of short-term debts (mostly terms and bridging loans that have interest rates ranging from 9-12%) that needs to be paid in the next 12 months. However, I believe the short-term debt amount should have been higher given that the Al-Bai Bithaman Ajil Islamic debt securities (Baids) is expected to mature in June 2019 of which Talam needs to pay a total of RM52mil to the securities holders (profit rate of Baids is 9%). So, I would actually assume that the near-term debt to be paid is around RM80mil instead of the reported RM33mil. With only a cash reserves of RM6.5mil, the company will need to raise capital fast or risk of being in default later.

The reported debt of the company as of Oct 18 is around RM90mil but investors need also to take into account the RM212mil amount due to IJM Group (under “other payable”) which carries an interest rate of 6.5%-8.0%. This would bring the adjusted debt amount to RM300mil which translate to a net gearing of more than 80% of equity.

In conclusion, there are huge potentials for Talam to unlock values for its shareholders (given their massive land bank) but this can only be done if the company is able to solve all of its near-term liquidity issues. Unless they managed to raised cash fast enough (via assets sales or equity fund raising) to pay off the debts or renegotiate with the lenders, Talam would most probably be at risk of defaulting on its loan payment obligation (in particular the Baids amount due in June). This will result in the company falling into the PN17 status which is never a good thing.

If you are looking to diversify your portfolio outside of Talam (due to its weak earnings outlook and liquidity issues), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-09 22:09 | Report Abuse

The June to Sept 18 quarterly result marks the 12 consecutive quarter losses for the company. Out of the last 20 quarter results, the company only managed to deliver a small profit in 2 quarters (4Q15 and 1Q14). Those thinking that the company can suddenly turnaround and start to post profit in 2019 might be putting too much hope on the management’s abilities. Expect further losses in FY19.

Looking at the balance sheet, we can see that the company is facing some liquidity issues in the near term. With current liabilities of RM30.6mil (of which RM13mil are in debt) and with a current asset of only RM4.7mil (of which cash is a mere RM180k), the company will need to raised more capital soon in order to pay off their immediate obligations. Given the current obligation amount is twice of its current market cap, it would most likely need to raise the capital via a right issue exercise.

If you are looking to diversify your portfolio outside of Ire-Tex (due to its weak earnings outlook and liquidity issues), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-09 09:57 | Report Abuse

Hi Guys,

Some update on Perodua (indirectly MBMR). Perodua started out the year with a very encouraging sales of 20,100 cars in January 2019 which is an improvement of 13.6% vs January 2018 sales of 17,700. Aruz sales number for its first month was at 1,025 units which could have been a lot higher if not for the delay in the registration process. This issue has since been resolve. Recent bookings numbers for the new SUV is at 8,000 units which very encouraging. Sales of the SUV should pick up pace starting in February.

4Q18 result is expected to be out by the end of this month. Hopefully with the total Perodua sales of 59,040 cars during the quarter (an improvement of 10.8% vs 4Q17 sales of 53,307 units), MBMR could post a 4Q18 profit to shareholders of around RM40mil to bring the total FY18 profit to RM145mil. At the current share price, the company would only be valued at 6.9x PE.

Currently, MBMR is still consider as a “loss making” company (even though core operations are actually profitable) under some investment platforms like Bloomberg, Thompson Reuters, bursamarketplace and even i3investors due to the large impairment exercises made in 4Q17. This is because the platforms depend on reported earnings which would include one off items and non-operational items like gain/loss on disposal, impairment, fair value gains etc when compiling data performance of a company.

This has limited the appeal of MBMR to some of the investors as they would think that the company is a loss-making company. With the expected 4Q18 result, MBMR would officially be taken out of the “loss making” or “negative PE” categories and hopefully would invite more investors to look at MBMR.

Regards

Stock

2019-02-08 13:59 | Report Abuse

Putting aside the issues that they are facing with the MACC with regards to SSM’s Digital Core Registry contract, this is a company that have been continuously delivering losses to its shareholders since FY16. Core net loss to shareholders (excluding all one-off losses like impairments etc) from FY16 to FY18 are: -RM11.9mil, -RM6.7mil and -RM13.8mil respectively. Thinking that they can suddenly deliver substantial enough profit to its shareholder in FY19 or in FY20 might be a bit of a wishful thinking on the part of some investors.

The company posted a 1H19 core net losses (after excluding all the one-off items) of around -RM10mil which is more than double to the net core losses of RM3.6mil in 1H18. Some investors were expecting FY20 to post better results given the recent launch of the MBRS system for SSM which was to run under the company until March 2023 (management did not give any indication of the type of profit this contract will bring. The contract is under Formis Network Services Sdn Bhd which is a 51% subsidiary of the group). However, this was put in doubt given the recent issues with the MACC. Since most of the company’s revenue are derived from government contracts, any negative findings by the MACC would most probably affect the company future outlook in securing more IT related contracts which itself will affect the company’s financials.

If you are looking to diversify your portfolio outside of Omesti (due to its earnings uncertainties), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-08 11:13 | Report Abuse

The negative surprise of Axiata having to pay the capital gain tax of RM2.2bil from its acquisition of Ncell back in FY16 just add another layer of bad news to the already disappointing business outlook. This would potentially drag the company’s financial result to another loss in FY19 which will affect the sentiment of the market towards its share price. However, please take note that the core net profit would not be affected as the tax is a one-off event.

Based on the 7 analysts covering the company, the average core profit for shareholders in FY19 is projected to be around RM1.25bil (however the reported bottom line would most probably be a negative of almost RM1bil if Axiata is forced to pay the tax on Ncell in FY19). At the current share price, this would already value the company at a valuation of 27.4x fwd PE.

This is considerably high especially for a company that has failed to deliver the expected growth that investors were hoping for. The highest profit to shareholder was recorded back in FY15 (this is before they acquire Ncell) of RM2.6bil. Since then, the profit has fallen substantially with FY18 core net profit to be around only RM1.1bil, a fall of almost 60% from its peak profit. Even with FY19 expected profit of RM1.25bil, it would still be only half to what it managed to achieve back in FY15.

If you are looking to diversify your portfolio outside of Axiata (due to its weak earnings outlook and relatively high valuation), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 7.0x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 6.0x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-07 13:26 | Report Abuse

The company’s result for the period of Aug to Oct 18 just show how dire the state of its financials. The company only managed to book in a revenue of RM800k for the period which resulted in a loss of almost RM1mil. Given the cash balance of only RM25k, I doubt the company has any ability to take on any new projects at the moment. Even if it managed to take on some projects, I seriously doubt that they can deliver any meaningful profit from it.

The company is planning to raise a total of RM1.5mil via a private placement of which all will be used for working capital purpose. I am just not sure that is enough to bring back the company on its feet and start delivering some profit to its shareholders.

Looking at the balance sheet, the biggest amount of assets are actually under the “Investment in JV”, “amount owed by contract customers” and “trade and other receivables” (combined total of RM51.2 mil or 87% of the asset value). All of these assets were previously highlighted by LFE’s external auditors. They have doubts on the value of the said assets. Any potential write-down/ write-off of these assets value could have a potential risk of putting LFE under the PN17 status.

If you are looking to diversify your portfolio outside of LFE Corp (due to its weak earnings outlook and very weak balance sheet), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 7.2x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 6x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-07 10:42 | Report Abuse

2Q19 result marks the 4th consecutive disappointing quarter for its shareholders. The company had only managed to record a dismal profit of RM1.5mil in 1H19 which is a fall of more than 75% vs the RM6.1mil profit achieve in 1H18. The causes of the fall in profit are due to

1) the falling revenue due to slower sales from Malaysia which dropped by more than 30% during the period

2) the fall of gross profit margin from 30.6% in 1H18 to now of only 20.8%

Given that the 2 reasons mentioned above are most likely to remain in the near term, investors will need to be prepared for the company to continuously post profit level similar to 1H19 result for the rest of FY19 and most probably in FY20 as well.

Assuming the company could deliver a profit of RM5mil for FY19 (remaining 2 quarters will need to deliver at least RM1.8mil profit per quarter), at the current price, Imaspro would have already been valued at 34x PE which is high given the doubts in the company ability to deliver consistent profit growth in the future.

If you are looking to diversify your portfolio outside of Imaspro (due to its weak earnings outlook and relatively high valuation), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 7.2x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-06 19:28 | Report Abuse

Theta has never been able to deliver any meaningful profit for its shareholders since at least FY10 with the profit of RM2.2mil reached back in FY15 being the highest (please take note, at the current price, the company is actually already trading at a high of 16.4x PE based on the highest profit reached in the past 8 years).

Revenue and profit contributions are highly dependent on both Tabung Haji’s related companies and government agencies. For the 9m18 for example, more than half of the revenue are actually from Tabung Haji related companies (which one must assume was based on more favourable terms). Even with that, the company had only managed to deliver a core net loss of RM3.3mil to its shareholders. FY18 would most likely end in the red for the company. Any decision from the government to reduce IT spending (for it agencies) will highly effect Theta’s prospects.

Given the change of management for Tabung Haji and for most of the government agencies, Theta’s ability to win contract might be in doubt given the new government policies of open tender (rather than direct contract awards). Even if the company managed to secure new contracts, it would not be at favourable terms as to what it might have received with the previous government. With this in mind, FY19 would most probably see another negative profit result for the company.

If you are looking to diversify your portfolio outside of Theta (due to its weak earnings outlook), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-06 08:10 | Report Abuse

Revenue increase significantly since 1Q17 when the company decided to venture into the trading of palm oil products which has since deliver higher revenue compared to the company’s original business of selling animal health products. This has helped increase the company profit to shareholder to RM3.5mil in FY17 from a loss of RM100k in FY16.

Then in mid FY17, management had proposed to diversify the company into the business of Chinese medicine via the acquisition of 70% of Ecolite Biotech for RM12.1mil. This acquisition was supposed to help increase the profit of the group by around RM1.8mil annually. The acquisition was completed in May 2018. However, based on the 3Q18 result, it does not seem that the acquisition had delivered on the expected profit expected by the shareholders. The newly acquired business posted a loss of RM500k in 3Q18.

Please take note, that the core losses in 3Q18 is actually around -RM5mil (after stripping out the gain from negative goodwill of RM3.6mil) and not the reported -RM1.4mil. All of the company’ s divisions fail to report any profit for the quarter.

Given the compression of profit margins seen in 3Q18 for all of the company’s main division (animal health products, palm oil trading and Chinese medicine), investors have to be prepared to see further losses in 4Q18 and potentially in the most part of FY19 as well.

If you are looking to diversify your portfolio outside of Sunzen (due to its weak earnings outlook), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-05 17:42 | Report Abuse

KPJ has a proven track record in delivering both revenue and profit growth to its shareholders which is mainly derive from the increase of numbers from both the hospital (from only 19 in 2009 to now 25 hospitals as of early 2019) and available beds (from 2,503 to now 3,060).

Between FY09 to FY17 revenue grew from RM1,456mil to RM3,224mil (which is an average growth rate of 10.5%) while profit to shareholders grew from RM111mil to RM162mil (a slower average growth rate of 4.9%). 9m18 result fared a lot better with KPJ delivering a profit of around RM126mil during the period vs 9m17 profit of only RM101mil.

The issue with KPJ is not on the company’s business outlook but mainly on its very rich valuation. The 6 analysts covering the stock has an average profit to shareholder of RM187mil for FY18 and RM203mil in FY19. At the current price, this would mean that KPJ is already trading at a high valuation of 25.3x trailing PE and 23.3x fwd PE. At this valuation, most of the optimisms/ growth of the company would have already been baked into the share price.

If you are looking to diversify your portfolio outside of KPJ (relatively high valuation), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-05 09:02 | Report Abuse

Between FY10 to FY16, Mercury Industries has always been able to deliver a profit of between RM5mil to RM6mil annually backed by the current construction business (under Paramount Bounty) and the now disposed paint manufacturing business (under Silverlight Prospects). In general, both businesses would have contributed an almost similar amount of profit to the Group year on year.

In FY17, the company decided to focus more on its construction business and sold off Silverlight Prospects for a gain of disposal amounting to RM9mil. The decision to focus on construction was mainly due to the high prospects from big government projects. This backfire when the company fails to deliver any meaningful profit growth since the disposal and seems to be stuck in an industry that is now in a declining period (given the government decision to review, delay or cancel most of the big project under the previous administration).

For 9m18 the company had only managed to deliver a profit of RM1.8mil, which is less than half of 9m17 profit of RM3.8mil (excluding profit from discontinue business and gain on disposal). Assuming the company will end FY18 with RM2.5mil profit, at the current share price the company would be valued at 15.2x PE which is a bit high given that the average PE for construction companies are now below 10x.

If you are looking to diversify your portfolio outside of Mercury Industries (due to its weak earnings outlook and relatively high valuation), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-05 02:37 | Report Abuse

1Q19 result of negative RM2.5mil marks the 4th consecutive quarter of losses for SHH. Given the challenging market outlook of the furniture industry (oversupply of panel boards and lower demand from export market), couple with the persistently higher raw material and labour costs, investors will need to be prepared for SHH to continue posting quarterly losses in the near future.

If you are looking to diversify your portfolio outside of SHH Resources (due to its weak earnings outlook), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-05 01:39 | Report Abuse

2Q19 result was a really big disappointment for shareholders of Tasco with profit falling to only RM2.7mil from RM9.1mil achieve a year ago. The dismal 2Q19 performance was mainly due to

1) the underperformace of ocean freight forwarding division which recorded a loss of RM200k in PBT vs 2Q18 profit of RM3.6mil. Reason being is the significant drop in revenue and volume especially from solar panel customers.

2) the below par result of the contract logistic division which saw a fall in PBT by more than 60% to only RM3.6mil from the RM9.2mil in 2Q18. The fall was caused by lower occupancy rate of warehouse in the southern region, higher initial ops expenses for new supply chain business to Shell (JV with Yee Lee Corp) and reduce revenue from Regional Distribution Center in KLIA.

3) the higher financing cost of RM5.9mil vs only RM2.7mil back in 2Q18. The higher financing cost is related to the acquisition of land and warehouse in Pulau Indah.

Apart from the higher initial operation cost from new supply chain business, all of the other remaining causes for the lower profit in 2Q19 are expected to remain in the foreseeable future. With this in mind investors need to be prepare for the company to post a quarterly profit of only between RM3mil to RM4mil for the rest of FY19 (and potentially going into FY20).

Based on the assumptions above, Tasco would most probably end the FY19 with a profit to shareholder of around RM16mil which means at the current share price, the company is trading at a valuation of 15.6x PE. This valuation is not that high compared to other logistics player but investors need to be prepared for the company to post potentially small profit growth (if that is even possible) given the very challenging logistic market at the moment. With an oversupply of logistic services, everyone is expected to cut their service offering price to clients in order to chase a smaller piece of the market pie. This will most probably affect their profit margins.

The only bright spot for Tasco at the moment is their cold chain transportation business but that is still relatively small when compared to the whole of its business. Given that the company has already control a big portion of the cold chain logistic market (as an example, it already has 80% of the ice cream transportation business in Malaysia) any growth in revenue from this segment is expected to be low (unless if they decide to do another round of M&A which I doubt).

If you are looking to diversify your portfolio outside of Tasco (due to its relatively high valuation and weak earnings outlook), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-04 17:22 | Report Abuse

Excluding the one-off gains on disposals and the fair value loss on financial assets, 1Q19 result would have actually been a lot lower than the reported RM2.8mil profit (core profit would have been around RM500k). Investors are worried that the margins compression seen in 1Q19 will stay for the foreseeable future given the challenging market for piling services at the moment. Other piling companies like Econpile and Ikhmas Jaya also recorded lower profit margins in their recent quarterly result.

With a depleting orderbook of only RM300mil (potentially can last until end of FY20) the company will be desperate in getting new contracts to replenish its orderbooks. The negative outlook of the construction industry (due to government decision to review, delay or cancel big projects) and property industries (developers are scaling back on new launches) might make it challenging for Pintaras Jaya to asked for higher margins when submitting their tenders given that there will be a lot more contractors eyeing for a smaller pie of any future projects.

Near future earnings will mainly derive from the Singapore market (via their newly acquired Pintary International which has 70% of the orderbook value). However, it is still not sure what will the margins be for the Singaporean market. Full quarter contribution can only be seen in the 2Q19.

If the company managed to achieve a Pat of RM10mil for FY19 (assuming the Singapore business managed to deliver a higher profit margin), at the current share price, Pintaras Jaya would still be valued at 38x PE which is very high for a company with limited orderbooks, declining profit margins and operating in the construction industry which is currently trading at an average of below 10x PE.

If you are looking to diversify your portfolio outside of Pintaras Jaya (due to its relatively high valuation and weak earnings outlook), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-04 09:08 | Report Abuse

Being an FPSO specialist company, it is normal that Yinson has a high concentration risk given that both its revenue and profit comes from only a handful of sources (which is limited by the number of FPSO it has). As of Feb 19, the company has a total of 4 FPSO/ FSO that is currently generating revenue and profit to the group: FPSO Adoon, FPSO Lam Son, FPSO John Agyekum Kufuor (JAK) and FSO Bien Bong 01. However please take note that FPSO Adoon contract is set to expire in Apr 2019 and Lam Son’s by June 2019. The contract for another FPSO, Knock Allan, had just expired last month.

Given the 3 expected contract expiration in 2019, investors need to be prepared to see a sudden fall in profit for the FY20 (ending Jan 2020) to only around RM200mil which at the current share price values the company at a high PE of 22x.
That being said, the company should see a boost in earning for FY21 given the expected completion of FPSO Helang schedule by the end of 2019 to be deploy to JX Nippon Sarawak field (Yinson “bought” this contract from TH Heavy Engineering). Another potential is an FPSO to supply to First Exploration & Petroleum Development Company Ltd (FEP) for its fields in Nigeria but the contract details has yet to be reveal so it might not be too soon. Maybe for FY22 and beyond.

The issue with FPSO business is not just getting the contracts. Given the duration of the contracts which normally runs at above 10 years period, investors need also to study the financial viability of the oil fields where the FPSOs are being deployed as well as the counterparty risk. We have heard of a lot of FPSO contracts being terminated early which is a big risk to the FPSO owners as most of the FPSO are design for a specific oil field. The asset cannot be easily deployed elsewhere without having spent substantial amount of capex.

If you are looking to diversify your portfolio outside of Yinson (due to its relatively high valuation and concentration risks), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-04 07:22 | Report Abuse

Sporadic revenue and profit coming from 3 divisions: timber, palm plantation and gold mining (which delivers zero revenue for a while already but record annual losses of around RM800k). Investors are better off buying other more appealing companies given the current market condition where there are abundance of companies trading at PE valuation of less than 10x and PB valuation of less than 1x.

If you are looking to diversify your portfolio outside of Mentigan Corporation (due to its earnings uncertainties), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-03 20:41 | Report Abuse

The company has never been able to deliver any meaningful profit to its shareholder for the past 10 financial years with the highest profit achieved back in FY09 at a profit of RM2mil. For 9m18 the company only managed to record a loss of RM1.6mil to its shareholders. 4Q18 would most probably be another loss quarter for the group.

Even if the company managed to deliver a profit of RM2mil (highest in 10 years) for FY19, at the current price, it would already be valued at around 13x PE. At this valuation, investors would normally expect the company to consistently deliver a similar profit level through out the years which is very unlikely for this company. Based on its 10 years performance, achieving a RM1mil profit is already a very tall order for them (at this profit level company valuation jumps up to 26x PE which is normally what the high growth stocks are trading).

If you are looking to diversify your portfolio outside of Hwa Tai (due to its earnings uncertainties), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-03 18:18 | Report Abuse

The company has been consistently making losses since at least FY14 with only FY16 being profitable. However, the profit in FY16 was mainly due to the disposal of its loss-making business in China (of which it recorded a gain on disposal and also reversal of previous years impairment). Excluding the that, FY16 would have also been a loss-making year.

Excluding the RM20.6mil impairment losses on an associate, the company would have delivered a core net loss of RM14.5mil to its shareholders in the 9m18. To think that the company can suddenly turnaround in FY19 might be a bit of a wishful thinking on the part of some investors. Expect further losses in FY19.

If you are looking to diversify your portfolio outside of Integrated Logistics (due to its earnings uncertainties), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-03 13:40 | Report Abuse

The company has a market cap of RM527mil but only managed to deliver a profit of RM360k in the 9m18 to its shareholders. FY17 profit of RM6.7mil was mainly due to a RM16mil fair value gain on investment properties. If you were to exclude the gain, the company would have actually posted negative result in 2017.

Sometime it is still ok to invest in a loss making (or small profit) company if the company actually has assets that are worth a lot more than the market cap. However, this is not the case for HCK. The company has only RM0.44 worth of NTA per asset which at the current share price values the company at 2.8x PB. This is very high for a property development company at the moment given that most of its peers (which still delivers profit) are only trading at somewhere below 0.8x PB.

If you are looking to diversify your portfolio outside of HCK Capital (due to its earnings uncertainties and relatively high market valuation), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-02-03 10:21 | Report Abuse

Both the company’s business in manufacturing (via subsidiary Furniweb) and property development are facing operational challenges which had affected the profit to shareholders. The 9m18 result delivered a total loss of RM3.3mil to the shareholders with 4Q18 also expected to still record a loss. Manufacturing business saw a drop of profit by almost 70% due to the intense competition in the industry. The sales in property has dropped by almost half due to lower sales from the Picasso Residence project. Management is planning to venture into the affordable housing segment which I think is a bit late given the already intense competition in the segment. Even those that are well known in the segment (like Hua Yang) is finding it difficult to deliver profit to their shareholders. In addition, with the new regulation imposed by the Pakatan government, where any residences to be considered affordable, it will need to be have at least 900 sq ft of size and be price below RM300k. This would only mean lower profit margins to the developers.

If you are looking to diversify your portfolio outside of PRG Holdings (due to its earnings uncertainties and bleak business outlook), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-01-31 12:51 | Report Abuse

It is a safe bet to assume that those that are interested in this company don’t actually believes in the company’s current assets and businesses. They are more interested in the regulation plan to be presented by Tan Sri Vincent Tan later (the deadline was extended to June 2019). He had already mentioned of injecting his private business into the company.

Investors need to be aware that Vincent Tan total exposure to Berjaya Media is 43.06% (38.9% direct interest and 4.14% indirect (from Bcorp 18% interest of Bjmedia. Vincent Tan has a 23% interest in BCorp)). So, if he wants to inject a private business of which he would probably own almost 100% interest, he would want to inject it at the highest price valuation (which is not good for BJmedia existing shareholder). This will be paid via new shares of BJmedia.

To get the best deal for himself, he would want the new shares to be issued at the lowest price possible which is why I don’t think he would want to do it at anything above 20 sens. Given that the NTA of the company is currently only 5 sens per share, he would most probably want it to be done at price closer to the NTA. By doing this he would practically dilute all the original shareholders of BJMedia which means that most of the profit from the new business would still flow to the original owner (Vincent Tan himself).

If you are looking to diversify your portfolio outside of Berjaya Media (due to its earnings uncertainties), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-01-31 11:08 | Report Abuse

Just like other plastic packaging companies, CYL is facing challenges in both in growing its revenue and delivering substantial profit to shareholders. Given the intense competition due to higher capacity supply from the its other competitors (SCGM for example is doubling its capacity via its new plant in Kulai), CYL will need to be more price competitive in trying to attract exiting and new customers which might explain the fall in revenue for the 9m18 to only RM39.2mil from RM45.2 mil recorded in 9m17. This represent a fall of around 13% yoy.

The increasing resin price and higher labour cost has resulted in its cost structure going up which is why the company had posted a loss of RM2.5mil in 9m18 vs a profit of RM900k a year ago. Given that the current oil price is still high at above USD60/bl which itself would mean higher resin cost and the lower demand from the customers (most businesses are moving away from the use of plastics for packaging), we should assume that the under performance will continue in FY19.

If you are looking to diversify your portfolio outside of CYL (due to its earnings uncertainties), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

Stock

2019-01-31 10:46 | Report Abuse

United Malacca (UMCCA) is not the only plantation company that posted disappointing results in the most recent quarters. If you go through other financial reports, most (if not all) plantation companies are affected by the low CPO price in Jul-Sept period.

In terms of valuation, all plantation stocks are currently trading at a high PE multiple (for those that still managed to record profit) or in UMCCA case, negative PE. This is reflective of the downturn cycle of the plantation industry. Don't think that the industry will reverse their down cycle anytime soon given the general demand of the commodity is expected to go down in the future. China for example, is negotiating with US to take in more agriculture products from US which would potentially include soybean (or soybean oil). In general, Chinese consumption of oil would not actually go up that much so the increase of soybean oil import from US to China would actually be at the expense of other oil commodities from other countries (in particular palm oil from Indonesia and Malaysia). Another issue is on the European demand of palm oil which is expected to go down exponentially given the proposed ban of palm oil use in food and transportation industries in the future. They have already agreed to phase out the use of palm oil in transport fuel by 2030. Some countries like France and Norway have already started to move away from palm oil.

With this in mind you need to have a slightly long-term investment horizon when buying into oil plantation companies like UMCCA as the return to upcycle might not be in the near future.
If you are looking to diversify your portfolio outside of United Malacca (due to its earnings uncertainties) I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.