seems like this company is cleaning up its act. Tey Por Yee no more and the new major shareholders is previously special officer to Hishamuddin. winning contracts shouldn't be a problem with the right connection, now let's see whether they can execute it

typical malaysia government, rash decisions without consulting stakeholders, even good ideas will be let down by poor implementation

based on the news, seems like it was indeed ceiling price. but now petroleum dealers association has came out to criticise it, citing lack of consultation. let's see how powerful is this association

@urfather since this is a question on a specific article, maybe you might want to leave your comment there next time. just a suggestion, easier for me to refer back

my answer may be a bit long winded so bear with me

1. DCF has 2 separate methods, one is free cashflow to equity (FCFE) and another free cashflow to firm (FCFF). I think where you come from is FCFF, where loan proceeds, interest and principal repayments are not considered and cashflow are discounted using WACC. what I did was FCFE whereby all cashflows available to equity shareholders are explicitly considered. the reality is they have access to the loan amount which was used to fund the project

or you could think from it another way. from a shareholder's point of view, I don't have to fork out anything for rights issue, placement etc. all cash are from sukuk holders to be used by me, so essentially I have zero upfront cash outflow. all I need is to share my future cashflows (through payment of interest and principal) and my entire project is discounted using cost of equity (which will definitely be higher than WACC).

in essence, the loan proceeds and repayments are future incremental cashflows which you cannot ignored when you are valuing the project from an equity holder's point of view (FCFE).

2. DCF valuations are dynamic, meaning when you shift timeframes, the value will move. if you are buying in the 4th year, value will be different because
i) your future cashflows from year 4 onwards should now be discounted at a lower rate so PV should be higher
ii) those sukuk cashflow should have yielded some return by then
iii) you lost access to the sukuk cashflow which are available in the first few year

3. I assume the RM284m you refer to is conservative case-cashflow after tax column. the cashflow is after interest, which is return to sukuk holders. but after adjusting for the sukuk proceeds and repayment, what happen was you get the cashflow now but pay them back gradually over the years. so time value kicks in (I already deduct the interest so sukuk holders are not actually worse off). since sukuk holders are not worse off, why are the equity holders better off? because of the difference in cost of debt and cost of equity. from sukuk holders point of view they are happy to get returns equal to their cost of debt, but we are using cheaper cost of debt to finance equity cashflow, whereby shareholders usually demand a higher cost of equity. so IRR for these sukuk could be 5% and sukuk holders are happy, but I get to tap that cash inflow first and gradually pay them back discounting using maybe 7.5% cost of equity, that's where I get the advantage

to sum it up, yes the financing arrangement did contribute to the NPV calculation. debt financing does have its benefits, at least from time value of money point of view. 100% debt essentially also means zero equity which could be sky-high or infinity IRR, but in reality, of course it may not be zero cash outflow. sometimes these projects will require to park some equity even when it's fully funded through borrowings. e.g. Ekovest in their SPE project

I have been thinking for the past few months, the only possible method which Triplc advisers can manipulate the concession biz valuation is probably by imputing a large sum of equity needed and drag down the valuation

hope all these above clarifies

@aaroncjs I can't find it online, got my friend's help to download through Bloomberg

just to share some data (average 4Q16 vs 2M17)

Brent (USD/bbl) 51 vs 55
Brent (RM/bbl) 220 vs 248

Crack spread index
European: 9.4 vs 9.8
Asia Tapis: 6.8 vs 8.7
Asia Minas: 11.0 vs 12.1

data is looking good :)
if monday price drop, perfect time to collect

if ceiling price is indeed implemented, my personal view is

1. consumer fatigue will kick in at some point

there could be some initial competition among petrol stations and consumers could flock to the cheaper station at first, but this likely won't sustain. imagine if the price difference is minimal and petrol prices change every week, soon consumers may not pay as much attention anymore.

imagine constantly monitoring your car fuel level, global fuel price trend and the prices of each petrol station etc.to plan when and where to refill your petrol

2. price competition unlikely to be intense (as what we have seen in telcos)

first thing I thought about price competition was telcos, but I soon realise it's unlikely

many people wonder why our local telcos, being an oligopoly (few major players) market, would see such sudden intense competition. the reasons are simple, excessive margins and an aggressive new player.

our major local telcos, even after all the competition for the past 2 years are still getting EBITDA margin of 40-50% against regional peers of 30-40% (maxis latest quarter still >50%). such excessive margins provide the perfect opportunity for new players like umobile to come in, providing services at a lower rates and margin for market share

for retail petrol, profit per litre (32c) has always been regulated by the government, there may not be much room for cut. besides, I don't see a umobile esque new entrants who will sacrifice substantial profit margin to aggressively undercut the others for market share. if price difference is minimal, then most petrol stations should be able to cope since they already have ongoing promotions anyway

3. petron has refinery and retail biz. if latest results of petdag, petron and shell are an indication, it was the refinery biz that was the major reason behind the explosive profit of petron and shell. petdag being a pure retail player, profit was relatively stable. so for short term, it will still be the refinery biz that will drive its profit up although retail biz will still be the main cash machine

so all in all, I think weekly pricing is positive for petron than monthly pricing. ceiling price mechanism would be slight negative, but impact on bottom line is likely to be minimal. short term will be supported by refinery while long term any competition is likely to rationalise

but pricing weekly is indeed better for retailers than monthly. changes in fuel price will also be less volatile. hiking 10c for 4 consecutive weeks sounds better than hiking 40c at month-end. government is hoping that consumers will get numb with the announcements after a while

yes the news is confusing. it says ceiling price but didn't say let petrol stations to determine their own selling price. and in last few para it mentioned that the petrol dealers asked that ceiling price mechanism not to be introduced and other requests and minister said government will consider these.

so ceiling price or not? so far all the news are quoting bernama so really can't tell what the minister actually meant

you can just leave your comments here or in any specific article

company looks good on surface, maybe I should look into this

glad to see after some time people are still reading. shows that they are researching rather than blindly go in

but that said, it could take two quarters before new contract effect kicks in, so there may still be some volatility come next quarter reuslts

paint biz is bad (for now), that's why they sell. now will focus on construction. RM50m market cap holding about RM300m order book, even though it's just 70% owned, that's still good value. and not to mention cash rich after selling paint biz

no lah just some old time friends and they just happen to be fund managers

just had lunch with some fund managers friends. more fund managers are pouring into equity, they can't afford to look bad in this type of market

the premium now is more like it. 8% not high but I can live with it

price movement seems to imply deal done

good consolidation. as I believe short to medium term is up, so now the longer the consolidation, the more serious the players behind are

be patient, some have waited over a year here. some just waited for a few days already getting itchy

yup as long as profit and dividend keeps coming (hopefully more contracts as well), I am fine with the quietness here

I'm really fed up answering simple questions by naive puncak shareholders. not only they refuse to think, allow emotions to cloud their mind, personally i have even written two articles on this deal, one for triplc and one for puncak. anyone with some determination could have browse, read and try to understand them. if you think some parts are wrong, you could come up with facts to dispute them instead of cry baby over here

just goes to show how lazy these shareholders are when it comes to investing

not necessarily, you can see how YTL acquire over those YTL related companies or how Ananda Krishnan privatise his company using usaha tegas. or more recently when SKP bought over the entire biz of Tecnic. that's not stupid. now you privately own 20+% of triplc, you used your 40+% controlled puncak to buy over triplc, you get a higher effective control, why not?

you assume that because triplc is trading at RM1.90 so RM3 is overpriced without looking at intrinsic value. mind you, tecnic was trading at around RM3 when SKP launch the acquisition. it shot up to almost RM7 before ex, went ex then limit up 2 consecutive days. no one accuse SKP of overpaying because they saw value

do me a favour, just do some homework and look at Triplc margin when they were doing the RM200m construction. now they have RM600m contract, work out the profit then see if it's fair. and don't forget the updated valuation of all the land they hold. just because it's currently sitting idle doesn't mean it has no value. then you will know how favourably it's actually skewed towards puncak's favour. if you can't even work out such simple calculation, I'm afraid you will struggle to value most companies in bursa

if you have seen me in other pages before, you know I am never this harsh (borderline rude I admit) but I have my reasonable basis which are based on facts and not just emotions

Lastly, it would be good if you guys could digest and understand the quote below:
Harlan Ellison — 'You are not entitled to your opinion. You are entitled to your informed opinion. No one is entitled to be ignorant.'

at first I admire your courage, even though you may not fully understand what you are doing. after being explained numerous times, you kept insisting then really it's nothing but pathetic

btw, do you guys mind keeping you own sad little story back in puncak page? it adds very little to no value here

no offense but I really wonder if puncak was one of your first stocks and you were so badly burnt that you can't even think straight

why should rozali sacrifice his listing vehicle, his cashpile to make small minority shareholders happy? if you are rozali, would you privatise Puncak? if you think paying RM3 for Triplc which was trading around RM1.90 is not fair, why should he pay you RM2.50 when Puncak is trading below RM1?

if you have invested long enough you wouldn't be so surprised with all these stuffs. Puncak case is nothing when you compared to those old days like Union Paper, Kenmark etc.

look at things objectively. if a road is a dead end, don't go knock on the wall, find an alternative route. for puncak's case, if dividend is not forthcoming, then aim for a turnaround in biz. what's the point of keep banging you head against the wall? seriously dude wake up, whole market is flying and you keep hoping for rozali to grow a conscience or pestering regulators for things they are not empowered to do

@probability I think one month back someone actually study how ron95 price was calculated, it shows something like 32c per litre. so I'm just wondering if I remember or understand correctly

I have seen warrants with shorter expiry getting more premium. this premium is still low for an uptrend company

I'm really amazed by the speed ekovest is going up. guess no one talks about harris onn selling anymore?

if I understand correctly, retail petrol and diesel is under the automated . pricing mechanism so retail price goes up when the so called MOPS index goes up, allowing petrol stations to own a fixed profit per litre sold. so when retail price is on uptrend, revenue will definitely go up, but what about their margins? would it also increase?

just to recap, which are the biggest factors that are going to affect their QR? Retail selling price, Brent price, refining margins or others?

that's why I keep saying the deal is actually bad for triplc (in terms of price) and good for puncak.

if anyone should oppose the deal, it should be triplc shareholders. if only puncak shareholders have done a little homework they would know that special dividend is not happening again, so better have earnings generating assets for market to value Puncak properly. that would be a better chance for puncak to rebound rather than non-stop losses

kahhoeng, my advice is in investments don't get emotional. everyone make mistakes, just have to accept, learn and move on. you already know legally selective cash-out option is not possible, privatization is very remote yet you still insists, then that is nothing but stubborn.

trust me, the most SC can do is to make life difficult for Puncak by asking them to disclose as much details possible to help shareholders make their decisions, no way they can impose a cash-out option. they regulate takeovers, they don't instruct or instigate takeovers

the land both in Puncak and Triplc I suppose eventually they will sell it cos they don't have the expertise to develop them. like I said, Puncak is a value trap. it needs earnings for the market to value it

premium at less than 4% is still low

wow move so fast

separate listing won't happen so soon. earliest I guess is late 2018 or 2019. need to let Duke 2 run for a while first to increase the attractiveness

people unnecessarily worry about the loss of contribution from car paint biz. next quarter profit will drop but cash will increase substantially. then the following quarter when the new contract kicks in, it will be more than sufficient to cover the car paint biz

yup got some yesterday afternoon also.

no problem. I was in accounting firms working with IB and still have banker friends. I'm just relaying what they shared with me

looking from the surface it seems the more exposed to refining, the more volatile your margin is. so stability wise, it will be petdag>petron>shell

small sample size and selective reporting...

missed the chance to get more this morning

anyway congrats for those who bought before this

at least petron I dare to top up, shell a bit too late to the party already and really no idea how high can it go

looks like another limit up

what a crazy result, just last quarter was losses. the results look even more volatile than petron, I guess because it's pure refinery biz. good for short term trade but I think I rather sit out this one

so triplc shareholders should just sit back and relax until earnings come through. deal go through you get a cash company. deal fail you get a stable profitable concession company.

for puncak shareholders? expenses itself will kill the company slowly while you can only pray that the plantations will bear fruits earlier before the company is dead

actually I don't really mind if the deal falls through. triplc concession biz is pretty simple and profitable. and MARA will always have more universities to build. we also know they have plenty of valuable land which they can monetise once property industry recovers.

just sharing my experience

usually if you want to ask for extension you have to show some progress, e.g. already in negotiations etc. then bursa will likely grant you extension. from my experience, Bursa is more lenient towards troubled companies like PN17, because if delisted shareholders get nothing

for triplc case, if deal goes through then it's full of cash. without valid reasons, bursa can always order it to return cash back to shareholders and delist if they fail to make any progress upon deadline. it won't hurt the shareholders

lousy deals are always possible, that's why all net cash should be applied some discount for leakages etc. but for PN16 companies, regularisation plan has to go through SC. most of the bankers told me they are not really scared of Bursa but more on SC because SC really have a lot of free time and will pester you with queries if they are not satisfied with the plan

to put it simple, if two companies are in net cash, always go for the PN16 one, at least there are more safeguard provisions so that the company doesn't have complete freedom to do what they want

cashpile is dwindling fast by paying operating expenses. don't spend it soon and puncak management will happily spend it away