thanks for the sharing. good to hear from someone from the industry. LeonFB is one of the "steadier" steel company but whether it warrants PE of 10 times in a volatile and low margin industry is debatable

johotin is a very close proxy

back within TP range of RM2-2.80

ignore one-off items, just look at core profit. ideally should also separate earnings from highway division from the rest, because highways have high EBITDA low profit, PE shouldn't be the same as construction or property players

the reason BNM refuse to give MBSB a banking license is because they haven't finished cleaning up their books. if they merge with AFB, majority of assets still from MBSB. BNM would be naive not to see through this and issue them a license

bonus issue

impairment is just a convenient excuse. look at the profit excluding impairment, it has been on a declining trend for the past 2 years.

MBSB is reducing exposure to government servant now as they screwed up in that segment previously, somehow getting a lot of bad loans from government servant. Aeoncredit and RCE management is much more competent in the moneylending biz

MBSB is one of the few stocks that I cannot agree with coldeye. it's a speculative stock disguised as fundamental

more like you are speculating on how the future standards will be while I'm talking on current standards which are effective for now. from conception to effective implementation of a new standards will easily take years, good luck waiting for that

Brahmal of Creador just became substantial shareholder, guess he also see something is brewing in this company.

but he is not always right, the recent SMRT and Masterskill deal was a bust

M&A rumour that doesn't make sense at all. why would MBSB (RM42b asset) want to merge with AFB (RM2.6b asset)? with such small target, MBSB will be outright acquiring it. all the merger talks so far is EPF trying to pare down their stake, buying out such small lender is just doing the other company's shareholders a favor, not helping MBSB or EPF

no cash inflow. whether there will be income I'm afraid it's not up to you and me, there are accounting standards that regulates earnings recognition

@chonghai I like Ekovest and Triplc because I see them as deep value with short to mid term catalyst. Roughly I can estimate their value, it only depends on timing when the values are realised. Prestariang comparably I'm not so positive yet because all the above are still essentially my assumptions and the PE is still high (although it may be normal for software company).

The details are not so complicated actually, once you know the components inside. Haven't had time to look at WCE, anything interesting? may look at it if I have time

@PurplePain long term contract is not really equal to direct sales of goods and services. imagine a contract staff, do you pay him at the end of his contract? that would be the most conservative way but doesn't really reflect his services throughout the year

the concession agreement already specify the terms and payment so I don't see why they can't recognise the revenue. if government eventually default or the company fails to fulfill their obligation then that will be a separate event whereby they should recognise a writedown of the financial assets

under the lodge and launch framework, Triplc will issue the sukuk within 60 biz days. so maybe we might see some earnings recognition by the May 2017 quarter. My estimate for FY17 EPS is only around 8-9c but FY18 will accelerate to 40c and FY19 and FY20 above 70c. but for disposal scenario, I still prefer to value based on DCF because that's the most likely method to be used

initially I thought Puncak wants to acquire because of synergy. Puncak has excess cash, Triplc need cash for construction. if Puncak acquired Triplc earlier and use its cashpile to finance the project, they would have been able to save the sukuk interest. but seems like the cash is going to be used for planting cost for oil palm. anyway good luck for all those still holding, hopefully the down period is now over

like I said before, this counter is really a test of patience. short term can look at earnings, long term cashflow. but if Puncak is willing to pay a fair price, I'm more than happy to sell

wow is there some news that we are not aware of?

@PurplePain IAS 11 is still using % of completion method for construction. Personally I like % of completion rather than one-off recognition for reasons explained above, but it's up to the standards setter.

For SKIN contract, it is very clear cash payment will only start in the 4th year, no progress payment. What is in this article is on earnings recognition based on IFRIC 12. essentially you are doing work in the first 3 years to be entitled to receive the cash from 4th year onwards. that's why the standards is asking company to recognise revenue and profit in the development stage

@BLee no problem. here in this article my view is that Prestariang should follow IFRIC 12 for accounting recognition. For BOT contracts with guaranteed payment it is specified that they should be recognised as financial assets under the standard. Essentially I think the rationale of the standard is under BOT, eventual ownership belongs to government, not the company so it's essentially a FA/receivables, not PPE. that's why there is no amortisation. hope this clarifies.

@BLee as the payment amount is guaranteed and not contingent upon usage, the SKIN software would be recognised as a financial asset instead of intangible asset, so there won't be any amortisation. the support cost would be recognised in the 12 year maintenance stage which is not explicitly covered here.

One assumption made here is also that the RM1.5b cost covers all the necessary costs for SKIN development during the first 3 years. A gross margin of 17% assumed here is not overly aggressive, in my opinion

I don't know about % of completion method being phased out. personally I think the method is not perfect but is the closest we have for now to reflect the underlying economic reality. recognising everything at completion doesn't reflect the work done over the years for long term contract and create unnecessary earnings volatility

My view on the SKIN contract based on IFRIC 12
http://klse.i3investor.com/blogs/purelysharing/109447.jsp

not exactly breaking news but food for thought

http://english.vietnamnet.vn/fms/business/165177/hai-duong-pressures-delayed-thermal-power-plant.html

quite risky company. the whole company's prospects is essentially tied to the Vietnam power plant. now there are allegations that actually till now no work is done on the plant
http://english.vietnamnet.vn/fms/business/165177/hai-duong-pressures-delayed-thermal-power-plant.html

when market cap is only around RM1.2b, that's what the hoohah's about. but that's only my estimate. the exact details are not available yet, what we know now is that they are going to do work and get paid about RM295m p.a. from 4th to 15th year. that's RM3.5b cash payment over the period by the government

johotin is very similar to canone. both in the packaging biz then diversified into condensed milk biz. canone price has remained relatively flat while johotin has surged. so is canone undervalued or johotin overvalued? I'm not sure but time will tell

but the caveat is once they kickstart the project. I reckon they will have to raise financing first, their current balance sheet is too thin to undertake it

the project seems like a game changer for Prestariang. if I understand correctly on government concessions, the RM3.5bn includes contract value as well as interest element as it is deferred payment over 15 years. but the works are done in the first 3 years, which means Prestariang will recognise the fair value of the revenue in the first 3 years, which I estimate it is around RM1.5b (without interest). the company however most likely need to raise borrowings to finance such a huge project, but once this project kickstarts, the profit could easily double or quadruple to RM40-80m per annum

same director has been selling shares since April, that time price was around RM1.30 and EPF deal is not on board yet. was he stupid? we do not know his motives so we don't judge. but from RM1.30 to now more than RM2.30 shows you that directors movement is one factor to consider but not everything. if you don't feel comfortable with a company then it's better not to buy

i feel bad for the shareholders when the company has huge amount of cash yet ask from shareholders. but personally I think the deal is fair for L&G, only question is holding period. during rights issue, companies could be mispriced easily when shareholders are reluctant to invest further, that should be the window longer term investors should target

the shares available is low, so price is volatile, perfect for traders. but I'm not good in reading charts, so I try not to trade, just buy at reasonable price and hold. again use your own strategy and discretion

doesn't matter how much% progress, ekovest PE is going to look high anyway as long as the highway assets is bundled together with other biz. but investors who look at PE wouldn't invest in the first place. so as long as no major negative surprises in QR is good enough for me

it was oversold previously, but never thought it would rebound the day after extension was announced. syndicates really play gao gao

bintai kinden just bought a similar concession for RM15m, RM120m contract value, annual payment around RM12m for 22 years. valuer valued it at RM24m-27m.

so based on the same estimate, for RM599m contract, valuation should be around RM120m-RM135m for Z1P3. bintai can buy at a discount but for related party transactions, Triplc cannot sell at a discount, if not it's not fair and reasonable.

based on the same method, Z1P2 RM260m contract should be more than RM50m especially since construction has ended and now it's just collecting cash.

so using comparable method, the 2 contracts combined are worth RM170-RM185m. actual transaction price may vary. pls note that Puncak cannot buy at a discount but Rozali can always get valuer to manipulate a bit on the valuation

triplc will be fine by itself with steady concession income supporting, but by my estimate, construction earnings are more likely to "explode" in 2H17 or 2018 as revenue recognition in initial quarters may be slower. with this delay, it is really testing the patience of short term investors so expect some of them to exit for now

delayed 3 months again. don't know what puncak is playing, maybe want to wait until new project recognised only acquire?

for those who bought and believe in this counter, pls ignore the following. it is just to share with those that are interested but haven't bought this counter.

1. low margins are not forever, but that's a risk when it comes to companies with poor historical track record because we don't know how much is their operating leverage. it is also possible that the low margin was strategically done to outbid competitors and secure more jobs and so their margins may continue to be low

2. based on the contracts they have won last year and the projected schedule, this year revenue should have almost doubled. somehow its increase is more modest. is it due to delays or most of their projects are back-end loaded? I don't know

3. concession earnings is supposed to be steady and low risk. but for some reasons, budaya actually was loss making throughout the construction stage (if u read the circular). this is quite unheard of for Uni concessions. it implies poor cost management. so will they be profitable now at the maintenance stage? my gut feel is yes but will it be the RM10m p.a. as projected by the valuer 2 years ago? I'm not so sure.

plus if you notice budaya accounts, they financed the construction by current payables. so far no repayment has been done for the past 2 years but will it continue to be so after ownership change or pesona have to borrow to pay off the payables and incur interest cost?

4. many people conveniently ignore the warrants which is about 17% of the current shares. when your eps is diluted, then it may not be as great as initially thought. so if you target price is 70c, if diluted by 100/117 then suddenly it's more like 60c. that's a big difference.

the good stuff about this company of course is its record order book and maybe more to come. but before you jump into it, maybe give a thought about the points above as well.

the counter seems overvalued now unless they can solve the low margin problem. their property construction margin at 4-5% is even lower than those major infra ones. let's see if their margin improves in the coming quarters. if not, 2b order book spread over 4 years x 5% margin, annual profit is only 25m. 400m market cap seems a bit overstretched

@valuelurker the interest and repayment schedule is in the notes of the annual report

central plus didn't dispose any shares. if you look at the previous annual report they own the same 4.9% stake but was listed as substantial shareholder. I think now they realise actually central plus technically is not a substantial shareholder because rozali's interest includes central plus but central plus interest doesn't include rozali. so with less than 5%, it is actually wrong to list central plus as one of the sub. shareholder

a QR is not good just based on headline net profit. this quarter was boosted by one-off gain on disposal. for banking stocks, ideally you should also look at the net interest margin, pre-provision profit, provisions and the other key ratios such as impaired loans. plus foreign investors direction is also important because banking stocks have highest proportion of foreign shareholders. if you don't look at these, there's no difference from punting

dividend and split will only come in earliest 1Q17 and profit doesn't grow overnight, so only real investors will stay and wait. now traders are exiting and taking profit. both groups have different objectives so both are not wrong

the price volume does seem to show that most likely the deal will be delayed.

the issuance of sukuk is a good news because that means they are probably going to start construction in 3-6 months time. the contract will be highly positive for the net profit despite high interest cost thanks to recognition of interest income element from the concession. once construction kicks in, earnings will shoot up for the next 3 years

price continue to be under downward pressure on rights issue, almost all companies are the same. price may/may not rebound after rights depending on the company. best to wait until rights issue price fixed before considering to go in

erm, not sure about your source, but none of your statement seems right. those biz disposed off are profitable but are considered non-core and is taking up capital. there're no visible significant digital initiatives by CIMB, CIR improved because of MSS last year, NIM and NPL is flat or worse off qoq. not saying that CIMB is not good, but it would be better if you factcheck your comments so that readers are not misled

Q3 boosted by gain on disposal RM150m, otherwise qoq still flat, provisions still relatively high, nothing impressive

good luck reach. now without the cash backing anymore, let's see where the price will settle at

like kyy said, listed companies can print cash by issuing new shares. why tap your own pocket when you can print cash

and not to forget the massive rights issue. markets generally don't like huge amount of rights issue especially now property market is still soft.