of course I don't know the acquisition plan, I'm not insider. I can only use reasonable logic to piece together info available. even with that limitation, I think I did a decent job.

maybe it's time for you to do some of your own research instead of always blaming others when you lose money

Puncak can accumulate slowly, but how slowly? I'm sure you don't know Triplc's average daily liquidity, how much can Puncak accumulate? Besides, Puncak hold no shares, it's owned by Rozali and his companies. which means Puncak has to accumulate from zero, and when Puncak and Rozali combined cross 33%, Puncak and Rozali has to jointly do a mandatory takeover, i.e. Rozali is also responsible for the offer

Unlike some naive commenters, Rozali is not that dumb

@rogers123 Unlike u who seems to only know how to comment off-hand and criticise others, I have done my homework. the land value I already did a reasonableness check in my previous article compared with other transactions in that area, the value is not that far. yes I agree that there may not be a ready buyer now, but that doesn't mean that there is no value. If you pay attention, you would have noticed in the past few months big developers are accumulating land already

On concession, are you seriously comparing UiTM concessions with China project? Besides, when the same team has done >RM1b projects in the same vicinity, I don't think they will have much problem, unless Puncak screw it up

@kahhoeng I'm afraid there's no concrete wrongdoings from Puncak so there is actually no case for complaint.

For corporate deals, those are not under SC jurisdiction unless they requires SC approval. There's nothing they can do. There is also no violation of any securities law. Not paying dividend, not doing share buyback etc. or shares being undervalued below net cash does not violate any law, no regulators would even give a second look

One common trait among most companies trading below net cash or significant discount to net asset value is erratic profit or even losses. Without profit, there is no real method of valuation for a minority shareholders because cash is something you can't access. Net cash looks good on paper, but when you assume even 4% FD return, you will see how little value idle cash actually creates for a company.

What Puncak needs now is to get back on its feet and start return to profitability. Then only market will give it a proper value. If you can put aside your huge unrealised losses in Puncak and actually analyse the deal thoroughly, you will see that the acquisition is actually a good thing for Puncak. in fact, it's even better than the plantation deal, in my opinion.

One contribute earnings from day 1 and don't need any additional financing. In fact, if Puncak wants, it can get rid of all the land bank instantly get back RM258m it'll more than cover the aquisiton cost. while the plantation needs to wait for a few years and require significant planting cost.

@rogers123 I'm afraid you are the one who don't know anything.

from my first article I already mentioned Puncak is the key to unlock the value in Triplc. No dividend has been proposed so far so I won't go ahead and assume special dividend. The reason why Rozali offer RM210m is that he is also betting it is a sufficient premium over current price to entice Triplc shareholders to sell.

But you can't deny that it is not the best offer, land value alone is RM258m, borrowings is not a problem unless you assume the concession is a loss making biz (which by track record is not).

I'm not saying that Triplc shareholders should vote against, just be mindful of what could happen in both scenarios. Triplc got a decent offer but I still think Puncak got a better deal to appease their bitter shareholders

@rogers123 I'm afraid you are the one who don't know anything.

from my first article I already mentioned Puncak is the key to unlock the value in Triplc. No dividend has been proposed so far so I won't go ahead and assume special dividend. The reason why Rozali offer RM210m is that he is also betting it is a sufficient premium over current price to entice Triplc shareholders to sell.

But you can't deny that it is not the best offer, land value alone is RM258m, borrowings is not a problem unless you assume the concession is a loss making biz (which by track record is not).

I'm not saying that Triplc shareholders should vote against, just be mindful of what could happen in both scenarios. Triplc got a decent offer but I still think Puncak got a better deal to appease their bitter shareholders

the deal is a major disposal, so it's 75% approval.

for PN16, the regularisation plan has to get SC approval. Unlike Bursa, SC can give companies a hard time. Ask any investment banker you will know. Those SPACs also got a hard time getting their QA cleared by Bursa

my take on the Triplc deal

http://klse.i3investor.com/blogs/purelysharing/112371.jsp

my take on the proposed disposal

http://klse.i3investor.com/blogs/purelysharing/112325.jsp

wow, i didn't notice tecguan price has shot up so high.

unfortunately turns out I'm right again when I warned in one of the articles (not written by me) back in Oct that the counter may be worth RM2-RM2.20. the beauty and the ugly side of investing in such inconsistent company is that their performance will fluctuate wildly without explanation, so we shouldn't be too gung-ho in the projections and target price. stronger usd and cpo price should still be good for them in coming quarters but their inconsistent track record is a big turn off

anyway this type of company is good for traders and congratulations for those who has cashed out above RM2.50. fast in fast out, not for long term investing


Blog: Why Tecguan (RM1.87)? Significant improvement in profit after tax and revenue (palm oil company)
Oct 10, 2016 01:40 AM | Report Abuse

the company is not very transparent. the commentary usually are as as well as no commentary. the past 2 quarters revenue has shot up, probably as a factor of both higher volume and CPO price. CPO price should not be too low for next quarter but volume is unknown since company does not really tell much.

btw, the company mainly sells crude palm kernel oil so I'm just talking on CPO price assuming kernel oil will track CPO price movement

stronger USD is good for the company. for the 6.3m profit last quarter, 1.4m is from forex gain. Oct USD may come off a bit but Aug-Oct USD overall should still remain relatively strong

IMO, the market price seems quite fully valued. based on the latest quarter, I think the fair price would be roughly RM2-2.20, not much upside left considering the risk as the company's track record was not very good. any earnings disappointment and you could be looking at a nasty selloff

price still below NA, but all estates were quite recently revalued so have been mostly priced in NA. 2000 acres plantation is considered very small plus average age at 14 is end prime and some may need replanting

I get where you are coming from. That's what I thought as well before I understood concession contracts accounting. the concept where no revenue and profits are recognised during development stage is the essence of intangible assets where development cost, like what you said, are capitalised and amortised when products/services started to be sold

but if you read IFRIC 12, then you can understand where the accountants are coming from as well. concession contract in essence, is different from usual products/services development.

normal product/services you don't recognise R&D costs because there's no sales transaction happening, so it would be wrong to recognise revenue and profit. there's no customer, you don't know how much revenue can you get from the R&D costss incurred

concession contract on the other hand is a bit like construction contract. just imagine MRT Corp (government) awards a contract to Gamuda (Prestariang) to undertake the construction. in this case, there's already a customer (MRT Corp/government). When Gamuda (Prestariang) starts work, they are not trying to invest and develop something and hopefully make a sale in the future, they are fulfilling a sales already made. They know the contract value (revenue) and minus the costs incurred, they will get their profit.

that' why Gamuda don't wait until full construction is completed only they recognise revenue and profit. the rationale behind IFRIC 12 is almost identical with IAS 11. other examples would be highway concessions or university concessions. revenue and profits are recognised even though the highway/university is still being built

but what if they fail? similarly, if Gamuda has built the MRT line but it collapsed in the 3rd year before full completion, MRT Corp can choose not to pay them or ask for damages, but that's a separate event. Gamuda still did their job in the first 2 years and they didn't reasonably think that it is probable for it to fail, that's why it won't be wrong to recognise revenue and profit in the first 2 years and recognise a rectification cost or an impairment in the 3rd year.

my opinion: triplc can still buy if the price is below RM2.20 and your investment horizon is at least 6 months and above. if not, better stay away.

I'm still travelling, will only publish another article when I'm free

http://klse.i3investor.com/blogs/bfm_podcast/111859.jsp

now RHB is also saying that there will be profits recognised in the initial period

not sure about their structure, but usually JVs the partners have to inject some equity and the rest based on borrowings. RM10m/MW is probably estimation, getting some excess funding just in case would be safer for the company.

another thing to note is usually those partners in those JVs are silent partners who may not have funding capability by themselves, i.e. cronies. so usually gearing up as high as possible is to minimise their equity injection. I'm not sure the RM550m are they referring to debts for certain JVs or all JVs or just borrowings for their part in the JVs

anyway, I wouldn't try to use EV method since so many inputs are not clear

just to clarify, I said be careful on Tune Protect because valuations are not cheap even after the recent drop which mean there's still quite a bit of growth premium priced in there. they have to at least grow up to market expectations

be careful with Tune Protect. now that MAVCOM ordered them and AirAsia companies to let customers "opt in" instead of "opt out" when they buy plane tickets, their travel insurance performance went down in the last quarter when AirAsia and AAX passenger numbers went up. which means actual demand for their travel insurance is much lesser (many customers were conned to buy the insurance together with the plane ticket last time without being aware)

plus they are growing the general insurance segment which they don't seem to perform so well. claims incurred and management expenses are one of the highest in the industry

I'm not sure about the replacement value per MW but I can safely tell you that Gunung's EV definitely is nowhere near RM380m

1. Gunung MW is not 38MW
Like I mentioned, only when it's all fully completed, then there's around 140MW in which Gunung's stake is around 38MW. now I'm afraid most of them are far from completed

2. Investment needed first
Money don't come out of nowhere. You have to invest first in the hydro plant. The investment has to come out from cash/equity or borrowings.

3. Borrowings are not consolidated
The JVs most likely will fund the plant with borrowings but because JVs are not consolidated, the borrowings will not be shown in Gunung's financial statements. so actual indebtness is much higher at the hydro plant company level. those interest cost will eat into the plant profit once they are operational

toyoink is similar to Jaks. I heard there's some issues with the Vietnam government as well as funding that's why the power plant after so many years is still a no go

the logic is there, banks need to replace their ATMs and CRM can be a better, more efficient option (but most likely more expensive). the only potential problem is banks might just hang on to their ATMs while progress in internet banking. so the banks may not want to pay the price premium for CRMs when they know the cheaper ATM can still do the job before internet banking takes over

CKNYAM, this will be the last time I respond to careless comments from you. you can't even read my comments correctly, it's this kind of attitude that lead you to take HOAs etc. as part of orderbook and unshamefully spam the whole forum

i already mentioned before they don't have direct sales risk in the article. what I'm saying is they are still indirectly exposed to developer's sales risk and the overall property industry. if your customer having difficulties to sell the houses and ask you yo delay the construction, would you still go ahead and construct?

q3 may or may not be a blip, especially if you exclude sales from other segment, construction plummeted a lot. but I didn't change my forecast, did I? I said that would be the extreme worst case, which I haven't assumed

just because I said it's not worth this price doesn't make it a PN17. I guess in your small mind, all stocks with very low price are troubled company.

grow up and start paying attention to details

the info are all extracted from the annual reports and the announcements back in 2013 when they purchased the subsidiary. you can refer there. the problem is Gunung doesn't disclose a lot about the details and progress. Since the total MW fits the 140MW described in annual report, I think it should be reasonably correct

Previously I didn't include it because it lacks details so you don't know if the developer are going ahead with it.

It's not just demand but financing, just look at loan application and loan approval rates for residential houses you will see the grim picture. And affordable segment are those that are most hard pressed in financing

You can't dismiss something just because it is not happening yet. It is there hanging over your head, someone will come for your company if it does well

I haven't even got to the extreme worst. Look at Q3, revenue slowed down considerably. Worst case would be most of their orderbooks are stalled (as property developers struggle to sell), revenue delays and margins contract to normal industry rate like 12%. that's the worst

But of course you should do your own work. If you still want to invest that's your own money

it's called alignment of interest, it's the same reasoning why companies give ESOS to retain employees. imagine your active biz partner doesn't want to hold shares, don't you feel a bit concerned?

unless Vivo surprises in terms of new contract wins, if not it looks like the party's over. price overshot fundamentals, so correction is just normal

another troubling thing I didn't highlight in this article previously is that none of the directors hold any shares in this company (Anne has ceased to be substantial shareholder, actual % unknown now)

when the company keep on doing placement, bonus issues etc. and has such a huge share base (>3 billion), you wonder why none of the directors bother taking the opportunity to get a piece of the pie? especially when price has corrected over quite some time

it shouldn't be a major factor in valuing the company but is a point worth considering

if you bother reading earlier comments, i already mentioned the RM190m spread over 3 years will add about 0.2c eps annually. in that case, 2017 eps will be around 1.1-1.2c

just look around all the property projects, every developer are being cautious now. do you really think they will launch more than 1 phase concurrently in this kind of market? why would the developer risk holding inventories by launching multiple phases together? perak housing market is not outperforming the other states, just because it mentioned it may be launched concurrently doesn't mean it will. it's more likely they won't unless there's unusually high demand in perak

on diluted eps, there's only 2 scenarios, one is they expire worthless or warrant holders may covert before expiry to enjoy the upside or salvage whatever value left. either way it will cap the upside of the stock. just imagine you are owner of a biz, you think it's worth x amount but someone else has the option to take a % from you, do you think when you calculate your net worth you can conveniently ignore the option? especially when the option will take almost 25% of your biz. only if the option has indeed expired, then you can breath easily

if u know the value of a company, when it drops it gives you more opportunity to accumulate. of course everyone would like to always accumulate at the lowest point before rebound and sell at the highest point before retracement but it is simply impossible. it is easier to slowly and patiently position yourself and wait for it to move again rather than speculate when it will start to move.

good companies give it some time, when you look back in the future all these down period wouldn't matter. of course if bad company then you run fast...

just chill, let the price consolidate, shake out the weaker players before further legs up

now it's 15.5c compared to 18c when I wrote this. my fair value is 15c, so only recommended to enter at below 12c so there would be sufficient upside

i was told there's not much institutional interest in KSL because it's hard to get access to their management and they didn't honour their previous dividend policy. so despite deep value, no big enough buying interest

with rights issue hanging over the head, investors' appetite will be low

it's chicken and egg situation, because all the exporters don't convert back to ringgit, so indirectly weakening the ringgit as we have less reserves. the weaker the ringgit, the more they don't want to convert.

the problem is such rules were not implemented in good times so now it looks more like a panic reaction and exporters not going to like it

haha why so defensive if you are confident? I said CIMB was wrong on Vivocom but I didn't say Hong Leong is wrong on Pesona. in fact I said they were conservative. the only thing is valuation multiple which differs among individuals, some may think the company is worth 10 times PE, some may think 20 times. take info has to take both side lah, cannot selectively choose the good ones only

hong leong's projection quite reasonable, it's even more conservative than mine.

only potential issue is valuation (pg 12). it values the mid-2018 earnings at 15 times PE and take into account the net cash in its valuation despite forecasting a net gearing position. if take conservative 10 times PE instead and exclude the net cash, that will shave off RM214m off its RM650m equity value, TP will drop from RM0.81 to RM0.54

just an opposite view. do your own independent analysis

that's suzuki ertiga. proton ertiga is just again rebadging an old model, just like proton inspira was mitsubishi lancer. there is a reason why these foreign companies allow proton to rebadge these models they considered old

now exporters cannot keep more than 25% of their proceeds in foreign currency http://www.theedgemarkets.com/my/article/bank-negara-malaysia-announces-measures-boost-forex-market-liquidity

just like many startup nowadays, the valuation is purely derived by user numbers. not many eventually managed to squeeze profitability out of its huge user database without annoying its customers or biz partners in the process

the current correction is fine. share price has more than doubled so have to take a breather. and a lot of punters were also looking at PE or last quarter results (without even bothering to see there's a huge revaluation gain) and could be disappointed with the results (despite it being one of the best quarter in history).

one of its asset which is hardest to value which is the tolls, EPF already valued it for you. for 40%, it's worth RM981m, and if it meets target, another RM149m more. so Ekovest's highways are already worth at least RM2.45b, compared to its current market cap of <RM2b.

value is already there. as long as its other biz continue to grow and do well, there's no reason why the current discount to its value won't narrow

there are plenty of stocks trading at discount to listed subsidiary/associate value or net cash. e.g. bjcorp, insas, puncak etc. but as long as your profitability is not high, market will continue to discount the value further

too bad. but that's the essence of white collar crime, those persons incriminated are usually highly qualified

all logical reasoning suggest that he won't/wouldn't be able to do most of the things he promised to do. however, if he really as narcissist as everyone thought he is, populist policies may still be on the cards. republicans may not dare to be tough, at least publicly, against a popular president. after all, republicans won big this round, arguably because of trump.

what I'm afraid is that before the election, everyone has overestimated what trump can do, but now after the election, everyone is underestimating what he would do. one bad decision by trump could shake the world. and if he screws up, he can always blame other countries or leaders (not the first time in his life)

I met kyy once, a bit bossy but doesn't strike me as arrogant. it is good for him to share his thoughts but his tone is his blog posts certainly is not the nicest. and as many forumers have pointed out, his track record is a bit shady. if he has invested equal amount in all the stocks he promoted, most likely he's still in a net loss position

even his face is on the research report, it's no secret

in my opinion, kcchong's way is more focused on slow and steady profits, with all his margins of safety and taking care of downside risk. Kyy is more aggressive, going in big if he thinks the company has potential, win big lose big (actually of all his stock picks, most of the time he will still end up talking about the few furniture stocks he won big during the furniture boom)

margin is a double edged word, if used well it can amplify your profit but it could haunt you when used wrongly. the rule should be never invest with money you can't afford to lose. kyy can afford to use margins because even when he lost big in those plantation counters, xinquan etc he still has ample reserves. if you had lost 50% without margin, imagine how much you would have lost with margin? 100%? 500%? if mentality doesn't change, it doesn't matter which method you follow

actually placement price not too far from the market price, because nov 30 one dividend went ex, then dec another dividend ex so almost 4c dividend deducted already.

announced placement of new units. seems like the second dividend is to avoid paying dividend for the new units

did you notice that actually none of the directors own shares in Vivo except Anne? and she has also ceased to be substantial shareholder since Sept so who knows how much she has sold since then. at least in Sept it's still around 21c. even the directors themselves don't want to hold shares in the company...

it's sad that even after facts are laid bare in front of you, still in denial. wake up, none of Vivo directors own any shares except Anne, who has also ceased to be substantial shareholder since Sept, so she can now sell quietly without disclosing. Vivo is a company which its own directors also don't want to hold shares

the above shows very little. most steel counters posted better yoy results but weaker qoq, so the snapshot above doesn't show much actually

good attempt but too simplistic

1. number of shares not 653m, should factor in warrants 110m and 39.5m new shares to be issued for acquisition of unimap, diluted share based is 802m, so eps is 6c instead of 7c

2. unimap RM10m profit is based on valuer's estimation 2 years ago, no updated valuation this round and the company actually made losses in the construction period, so profitability may be doubtful.

3. unimap company has huge payables (>RM100m), after change in ownership, pesona may have to borrow to pay that, incurring interest

4. highway concession you don't get paid upfront, so have to borrow to finance the project. again will incur high interest cost. highway concession in initial years usually is ebitda positive but net profit negative to breakeven

all these add up can give you an illusion of very high ceiling when in reality, it may be much lower. have to be more careful in the calculations