well if both parties signed a HOA and negotiating is considered speculation, then I don't know what is the Kelantan water concession, figment of imagination built in the sky? is negotiating deals among two companies you own more difficult, or getting umno and pas to officially work together more difficult?

someone ask why I think the biz model is solid. well, they have completed the phase 2 contract so now their main biz is goyang kaki, wait till time come to collect payment from uitm, pay a portion to their bondholder and keep the rest. the risk is uitm aka government default in payment

I think it would be best if Puncak buy the biz and the land together and pay a fair price for it (scenario 2). This way it will realise its deep value asset in a short timeframe

it's quite impossible for the company to turn into losses. recognising the interest on receivables alone would be enough to sustain them. unless they go ahead with the new contract and incur high startup costs while revenue yet to be recognised. corporate governance wise it's as shit as it can be, but biz model wise it's as solid as you can hope for

my take on the current scenario
http://klse.i3investor.com/blogs/purelysharing/102783.jsp

imo yes chances of a full take over has increased but not by much. first, it's quite a big piece of land, unless puncak wants to venture into property development, it doesn't make much sense to buy that land. 2. for takeovers, land surely will be revalued. unless Puncak wants to pay a high price for takeover, if not likely the offer will not be fair, and since the price has hit as high as 2.40, it's hard for advisers to spin it as reasonable either (if offer below 2.40). my biggest concern now would be if puncak offer good price but pay in shares, then it's swapping a deep value asset for another (instead of realising it in cash). but that could be tricky as well as puncak shareholders won't be happy either if the company sits on cashpile and issue shares that dilute their shareholdings

latest developments were very disappointing. the price has dropped to an attractive level but the fundamental value also has dropped. have to revise the approach now

HOA was delayed for another 3 months

HOA extended 3 months. really a patience game

smaller countries than us have won gold medals, so talent pool is not the major factor (if not india and china wouldn't have such huge difference in medal tally) but the talent participation rate and funding. government shd take the lead and corporates chip in, once we have the funding environment, talented athletes or their agents can go look for their own sponsors

of course u don't need to know if you are ok to leave your capital lying there, but I'm just suggesting. monitoring auto industry figures, upcoming launch schedules, PMI, IPI etc. these could give you a hint. but of course buy and patiently hold is another option. just my 2 cents

I do understand the point you are trying to prove but market is often irrational. APM is relatively strong in cash generation compared to its lower earnings. using DCF, P/B or dividend model will probably also points to the company being undervalued. however PE wise it's expensive as earnings remain depressed. like many bursa companies, it is a value trap waiting for catalyst, which will be when the auto industry recovers. important question is when?

it's not impossible. remember the heydays of sumatec or ifca? for any counter which its price run ahead of its fundamentals, if you can time it right and exit before it falls then you will earn. if not then you will be stuck...

I think the statement in itself is misleading. in ben graham's context, the 'equity share' is referring to debt free company. so if the debt free company load itself up with debt, it's essentially the same underlying biz so there should not be any distinction between the two. this is very academic because there are a few assumptions 1) perfect market with perfect information. in reality, for highly levered company people probably prefer the bond over equity due to its security and priority claims 2) leverage recapitalisation. in ben graham's example, he essentially assumes that the debt free company takes on debts and distribute to shareholders. in reality, even if company takes on debts, they will probably keep most of it. theoretically it belongs to shareholders but they have no access over it. and when you have more cash than you need, cash slippage tend to occur

it's ok. everyone's entitled to their own opinion. the only reason sports exist is very much similar to why entertainment biz exists. people want to be entertained and is willing to pay for it and sports is part of life and culture today. besides sports is a multi-billion industry. so if sports is here to stay, I'd rather Malaysia thrives rather than sucks

while DCF is the ultimate method for fundamentalist, its real world application is limited. this is bcos it's extremely sensitive to inputs (growth rate, discount rate, FCF), just tweak it by a small amount and you will be surprised by how much your value could change. so it is more suited for concession companies where FCF can be estimated with reasonable reliability. besides, if you want to do DCF, ideally you should also reverse certain one-off items which won't recur in the future. e.g. Gadang has one JV with Hatten in recent years, after which Gadang may not have similar piece of land for JV. just my two cents

I don't like to be pessimistic but looking at both sets of our politicians (BN and opposition), I don't have high hopes. maybe one Malaysian sporting enthusiast billionaire could change our sports landscape (much like how Abramovich change football)

and may I understand how you get the bond value of 455m? since this is used in your final valuation. and not to forget many academic theories assume perfect market but in reality it's not. APM may be able to raise 100m with 5.5%. but the next 100m maybe market will ask for 6% so on so forth. so it may not be as straightforward as your valuation implies. I have not seen the ben graham's quote before or anything like it. but sometimes the context in which the quote was written could be important, maybe u can share with us the topic he was discussing when he said that?

high loan levels cannot be assumed to create value. it's very possible to destruct value when company overspend, make wrong investment decisions etc. So when the return from the investments (from loans) is lower than the interest expenses, that's when it destroys value. One of the reason behind merger acquisition arbitrage (where people long acquireee, short acquirer) is also because acquirer usually overpays and will leverage up so the pressure is on the acquirer to deliver returns that can cover the new loan expenses and generate incremental value

today's the edge weekly there's a nice chart that shows the ROE/PB correlation among Malaysian banks/FIs. There is a clear linear correlation except one outlier. No prize in guessing it right... (answer is MBSB for those who hate riddles)

don't worry, nothing has happened (touch wood). only thing that happened is more esos has come into market and their cost is very low (1.00-1.10) so selling at any price they would still pocket a good gain. another thing to monitor is that puncak has bounced from its low point, it may mean something, it may not. if u know the value of the company, just stay vigilant to any new developments and it shd b fine. in fact daring ones could even buy more to position for announcement next week, but not too much (probably not more than half of what you already have). don't b too greedy...

people who have read my articles before would know I am always open to constructive inputs, I even amend my articles to incorporate those views. so whoever has better ideas I am more than happy to learn from them. unless they are chicken, u know, language a bit difficult...

pak pak pak..... I see a big fat chicken. of course humble people will always seek for lesson bcos we accept that we have much more to learn. like what's the reason why chicken cross the road? ladies and gentlemen if u want to know the answer, look no further than asking PlsGiveBonus why he/she cross the road?

just to share with interested audience, MBSB ROE 4%, cost-to-income 33% (bcos much lesser branch costs), gross impairment >7%, loan loss cover 97%. for those who hold MBSB and wishfully hope it will go up, pls don't challenge me into releasing more damaging facts on your company. financially and operationally MBSB is just not there until they finish their 'close the gap' exercise, i.e. end 2017

@pekor thanks, but that only means MBSB has got away easy last time. now if they want to close the gap with banks, they have to up their standards. it's the same for banks, provisions doesn't mean the loans are hopeless but it means there are signs of stress. banks do routinely reclassify impaired loans that are performing back to performing loans. if I value MBSB, I would need to put a discount on them compared to other bank's P/B bcos asset quality, accounting standards etc. MBSB is below par compared to banks. which is also the reason why I don't value MBSB in my article cos it would be even lower than Affin's tp and it will piss even more people. calling a spade a spade seems so out of trend nowadays

I'm issuing a public challenge to PlsGiveBonus (pls don't chicken out), since I'm the lazy bum (who spent time researching and writing articles while u comment), pls enlighten me and the wider public of at least 10 of your so called 100 valuation methods based on info from the annual report and how MBSB ranks better against other banks/FIs in Malaysia in these valuation methods. tp 78 cents is Affin's, my tp is below 60 (based on 0.5 times P/B based on the cheapest bank P/B). the fact is MBSB's ROE is so low actually they don't even deserve 0.5 times. that's my basis, how do u get your tp of >1.00 or >2.00? plucked from the sky?

so public is not just better, they are miles better. only negative their valuation also miles higher, 2.3 times vs others ~1 time. so does MBSB rank better than public or other local banks? ROE and asset quality ratios would have shown a clear picture (unless u turn a blind eye on them)

just to share with others who are interested in banks (by now I know some people are just not interested in researching), Public Bank's ROE is 16% vs industry average about 10%, cost-to-income ~30% vs industry ~50%, gross impairment ~0.5% vs ~1.6%, loan loss cover >200% vs ~100%

haih, the fact that operationally public bank is the best bank in malaysia is so undisputed even their rivals acknowledge it. it just shows again u don't even know some simple obvious facts. the only criticism people can find about public bank is that they are always so expensive, at their peak 3.5 times P/B, even now when whole industry a bit lacky also 2.3 times P/B

I believe I have made my point on MBSB, so I'll move on until someone can give a constructive comment or criticism

seriously guys if you want to argue that MBSB got insider news or technical breakout etc. I'll leave it to you. if you want to discuss fundamentals can you even try to do some homework? I'm not perfect but at least I'm diligent and I don't write or comment without reasonable basis or logic. I welcome constructive comments or criticisms but the least you can do is to point out where and why my arguments are wrong. but so far I don't see any....

so maybe you can enlighten me with the other 90+ valuation methods I didn't cover and how they point out that MBSB is a good buy at this level?

maybe I'm not sophisticated enough to know 100 valuation methods (i only knew a few) but anyone who has analyse banks/FIs will know that P/B is the prevalent method, whether you are from Goldman Sachs or Ah Kow Consultancy. Just to entertain you, DCF, EV/EBITDA, APV, cap rate, RNAV, EVA, residual value all not suitable for banks or MBSB. only possible one left is PE. estimated eps is around 4.8c, at current price 0.90 is 18.8 times PE. public bank PE is 14.6 times, wahahaha, MBSB is so special it warrants a higher PE than public bank (the well known most expensive bank in Malaysia)

so ppop no improving, provisions will still be at a level comparable to 2Q16, where is your profit turnaround? after 2017 maybe. if profit remains at 2Q16 level (about 70m/q), that gives u an ROE of about 4%. this is even lower than all the local banks and their lowest P/B is 0.5 times. so is MBSB special?

why last 3 quarter profit improve when ppop is almost the same (declining actually), it's all about provisions amount, recognise less provisions higher profit that simple. so provisions are coming down? hooray! oops, management just told the whole world that they will recognise another 370m for 2016 (185m/q) and 740m for 2017 (180m/q)

if you can't discern the trend, allow me to decipher for you. if you look further back to 2013, pre-provision profit averages around 300m/q. over the years, it falls to around 250m/q which tells u MBSB's problem lies deeper than provisions alone

to whom it may concern, i don't believe you are bodoh, in fact I think u thought u r smart by looking at the figures presented in bloomberg tv and judging from the last 3q, u conveniently conclude that yay MBSB is recovering. how about looking at these set of figures?

pre-provision profit 4Q14- 187.4M, 1Q15 - 259.0M, 2Q15-263.5M, 3Q15-262.4M, 4Q15--267.4M, 1Q16-257.6.M, 2Q16-254.6M

provisions/impairment 4Q14- 100.1M, 1Q15 - 101.3M, 2Q15-134.3M, 3Q15-195.6M, 4Q15-266.1M, 1Q16-218.5M, 2Q16- 179.9M

firstly I don't need to write bad about a stock to accumulate, and unlike other bloggers I don't think I'm that influential anyway. for MBSB I will probably only revisit it when it end its impairment program (i.e. end 2017) or if it drops below 0.60

anyway no hard feelings, I will try to reply your queries/request. whether you take it or not is your choice

haha i3 commenters are so predictable. from the number of comments I already can know whether MBSB go up or down that day

the bloomberg reporter really should have done her homework before saying something. impairment charges from 2014 has been increasing, not decreasing. 1 important fact got wrong and her whole reporting context is misplaced. seriously these info can be easily pulled from Bloomberg (I saw many right behind her)

just to clarify for those who may miss it, net asset is not 1.71 anymore, it's 1.15 now (after rights issue), so it may not be as cheap as you think

fundamentally I agree with their sell call, technical or newsflow could be otherwise

personally I don't like it at this price bcos if u see Affin it can trade as low as 0.5 times P/B when your profit is low. 1.15 x 0.5 = 0.58. at this price level, I'm afraid you can only hope if some good news happen, if not price will most likely be flat or go down. it's your own call, keep if you think good news are happening soon, sell if you don't

probably less than 2 weeks to go

good jump in price today bcos of results. but what happens now until the announcement is probably just noise. the ultimate value will hinge on the offer. for those who enter now the risk is much higher than those who enter below RM2.00 or RM1.50. please set your own stop loss level, if it can go up fast, touch wood it can come down just as fast

bjcorp is just a giant web of companies and a big value trap. I can never understand why Vincent Tan just let the operations and price run to the ground while some of the subsi e.g. berjaya food, auto are well-run. I believe if you can hold bjcorp for long term (5-10yrs) value will definitely emerge cos Vincent Tan is not getting any younger. recent activities and corporate restructuring may be his move

CIMB is definitely worthy to be take note. Personally, I am more bullish on its upcoming 2Q but less bullish on its target price. If you look in details, their non-interest income dip a lot (almost Rm200m) compared to previous quarters due to trading losses but still their profit is stable. If all else maintain, non-interest income back to normal plus Indon, I think Rm1 bil is reasonable. But I think its price should trade between RM4.85-RM5.40 for the next 6 months mainly bcos the ROE has came down a lot since their good days and sentiment on the banking industry is not great

actually I owned puncak before this but after the HOA, I have switched over to Triplc side. Puncak's issue is more than the HOA, e.g. quarterly losses, lack of earnings visibility, corporate governance discount etc. like I said, if the chinese tycoon usually would be privatise cheap (see YTL-E) and keep it all to themselves but rozali could be different. The prop up in Triplc price by big volume (relative to its own) could be a confirmation sign. Puncak is much high profile than Triplc, so once all the good news for Triplc and bad news for Puncak is over, it would be easier for Puncak price to recover. If not, rozali can always privatise Puncak (with huge discount to cash level). Again, it's an educated guess bcos at the end of the day only insiders know exactly how this is going to play out

we can only speculate what Rozali has in mind. the fact that he chose to announce the HOA to acquire the biz instead of outright takeover would mean that he is probably leaning towards the first option