Jay, rozali arranged the plantation deal to the extent that he doesn't need shareholders approval...that's why I'm hoping SC intervention on the ground 1. Puncak purposely invested to avoid PN 16 classification 2. Plantation deal can't stand to pass a PN 16 classification approval given it's not generating positive cash flow at least for another 2-4 years until trees truly matured and can't be core given effective interests of 36%. Anyway, let's see how, yet to firm up my petition letter to SC

Rozali seems like worse than VT of BJCorp... Wonder if he's worse than Tiah of TA?!?

davidtslim, I doubt Rozali is that idiot to announce reporting that can be easily check out. Think forensic accounting might have a chance if the money trails are tracked.

My feeling, Rozali doesn't care about shareholders' response, only interested about benefitting himself, has no concept of win-win, and don't mind grabbing all despite being called villain.

I haven't sold my shares, partly because the money is still in the balance sheet and its too costly to leave now coupling with bombs everywhere in the market now.

Thinking about approaching SC, but can't figure out anything wrong with the recent quarter report. The only two things I have found to put minority shareholders at risk are (1) treatment of investment to avoid classified as PN 16 company and (2) too expensive plantation deal that offer no short-term or mid-term benefits. I have posted these two before.

Doubt MSWG can do a thing either. LTH is one of the key initiators there, and I have seen their concerns over Puncak in the AGM, nothing great...

Only hope is LTH fights back over the plantation deal, but haven't seen them doing a thing either.

Think its dangerous to buy a company where majority shareholder shares 0 information, showing NO sign of caring about minority shareholders, or sufficient regulation to defend minority shareholders in face of this kind of taukeh...

Haven't sold any of my Puncak shares or know what to do now, sigh!

firehawk, cash is still about 2.50, Puncak IS worth between 2.30 and 2.80. I can't predict market or Rozali's behavior, and I can't tell you to buy or sell, and I still believe its worth given its cash company!

rMoi, its crazy to buy into a company where majority shareholder does not consider minority's interests... Rozali has just shown you exactly that, yet since its listed, there's little SC or Bursa can do about him? If not because I have already bought this share, I would NOT even touch it for Puncak has shown clearly he has treated minority shareholders like garbage!

had rozali been actively buy back company shares using shareholders' fund, there would be less concern funds will be misappropriated. Currently, it's as if Rozali telling minority shareholders, I do what I like, who cares if you eat shit!

quite frankly, thought I bought into safety during a stormy macro environment, didn't realize the company I bought in can be worse than the macro factor... Don't like the garbage ride Rozali is taking us minority shareholders. Though, still don't believe he can just 'create' anything in balance sheet and expect nobody dare to fight back. Hope some big fishes coming to hantam this guy...

as much as I want to add more Puncak shares, the truth is, Rozali has just shown us anything can happen to its quarter report and share price 'will' adjust accordingly, despite the fact that the company still holding on to over 2.50 cash per share and minority shareholders should not be screwed this way... Rather hold on to my existing shares and wait out the storm while trying to engage SC to see what can be done. Still trying to decipher the quarter report, any input is appreciated

angiess frankly, this is the first time I bought a share with this 'kind' of majority shareholder... I will email SC to learn the process after compiling my data after the recent quarter report analysis. But doubt there will be any effect unless there are sufficient number of us meeting SC

the cash per share is still around 2.55 (63.7 million other investment + 913.7 million short-term investment + 229.9 million cash - 21.6 million long term loan - 21.6 million short term loan)/454 million shares if the payable is excluded.

angiess if minority shareholders never voice out, how would Rozali back down? I raised the question earlier of voicing out to SC and none said a word, good luck to minority shareholders, sigh!

hng33... I will voice NO in any meeting! In fact, will try to write up to SC after I have finished reading the QR and believe I have a case

my question remains the same, how many of you are shareholders and willing to approach SC for intervention? Without sufficient number, there's little hope, with the right size, I believe SC will get involve. And despite my request before, none seems willing to participate, only bickering here and hope things will change for the good?

anyway, need some time to go through the QR, sigh!

roger, you were never consistent in your comments, and you expect people to trust you?

little snake, yes, you don't care... barely heard from you on Puncak before and suddenly pops out of nowhere suggesting people to sell out of 100 over million losses. What a nice snake...

DK66 are you Puncak's shareholder? Are you willing to approach SC for investigation into Puncak's businesses? Anyone besides DK66?

little_snake, like your name suggest... protest is useless, loss means loss, better cut loss... A word of snake, a tiny little one...

unbelievable quarter report!!! Wonder if SC will take action?!? May I know how many of you are shareholders and would like to seek SC's intervention on Puncak Niaga's business?

I am still holding to my shares, and I believe minority shareholders should protest and demand an independent forensic investigation into its book.

angiess, 1.2 billion after delisting through capital repayment, Rozali will get at best 500-600 million. Why would he want to delist if he's controlling 1.2 billion now? I am only hoping that he would get fair, if not good, deals for shareholders, but definitely not crappy deals like the shin yang's plantation purchase...

Maybe Rozali know the deal will not get minority shareholders' approval and delay the deal until he has disposed his interest in TRIPLC so he's allowed to vote in the deal? I will definitely voice out this concern to SC to make sure Rozali CAN'T vote in any deal with TRIPLC!!!

hng33, I have posted the location of the land in the above. The lands for Sarawak Oil Palm and Puncak deals are all hinterland. You can google map. I have met another investor who have spoken to plantation analysts for clarification and was told the deal is expensive. I am hoping we can stop the deal.

Frankly, I have been feeling very bad lately since the plantation deal is announced, felt being ripped off.

hng33, my apology. I get your point. My apology, didn't get that earlier. Still, buying a plantation land at RM 18,500/acre for trees mostly less than 18 months old and you are not concerned? aren't you worried that Puncak may have to buy at RM 18,500/acre in future to buy out the rest of shares not owned by Puncak?

hng33, the RM 446 million is close to RM 441 million I can come up with (33,372.6 hectares*3,500/acre*2.47105acre/hectare + 9766.9hectares*18,500/acre*2.47105acre/hectare.) I have assumed the 267.9 million to be the price to pay after considering the company's debt. You are always welcome to come up with the number using what I have provided or directly from the Puncak's announcements. In fact, you have yet to confirm if you also saw the quoted cost for the plantation deal...

There's no point hiding. We, as small shareholders, can always raise our anger through Securities Commission or MSWG (doubt MSWG has any impact myself though.) We can group together to seek better deals for minority shareholders. Not acting or pretending nothing happens won't help.

So long any of shareholders here had read my analysis and compare it with the Puncak announcements and agree with me, please let me know. We can use this portal to discuss what to do next. Any expert in plantation is welcome to offer insight into the deal. Thanks!

hng33, are you saying the purchase price is not based on RM 18,500/acre of planted/prepared land and RM3,500/acre of unplanted land?

hng33, do you agree the SPA also said RM 18,500/acre of planted/prepared land, and RM 3,500/acre of unplanted land? If so, do you math and let me know where goes wrong?

hng33,

I'm not trying to mislead. I have also noticed the RM 267.9 million. The deal is assuming RM 18,500 per acre of planted/prepared land and RM 3,500 per acre of unplanted land. The number I have only been able to arrive is RM 441 million for a 60% stake. I also can't figure out where's the RM 267.9 million figure comes from.

My position is Puncak is the highest ever in my history of investment. Quite frankly, really upset with how Puncak announced the deal, 18 months and above's tree considered matured?

Would appreciate if you could do a comparison and let me know if there's any error in my derivation. Thanks!

roger, I never said Rozali is cheating shareholders! I merely stated that the deal is way TOO pricey.

To evaluate Puncak Niaga’s plantation deal, I have compared it with the recent deal by Sarawak Oil Palm Berhad’s. The followings are what I have found:

1. Sarawak Oil Palm Berhad
Seller: Shin Yang Oil Palm (Sarawak) Sdn. Bhd. (Shareholders include Tan Sri Datuk Ling Chiong Ho)
Acquisition price: RM 873,005,875.00
Date of announcement: July 04, 2016
Palm Oil price during the month: Should be about RM 2,300
Land (location): Between Batang Belaga and Sungai Murum, Belaga District, Kapit Division, Sarawak. (Lot 30-42 Murum Land District, Lot 40-64 Punan Land District)
Land (size): 47,000 hectares (planted: 23,798 hectares, unplanted: 6,772 hectares)
Palm age: Less than 4 years: 6,716 hectares
4 years – 10 years: 12, 388 hectares
11 – 16 years: 4,694 hectares

2. Puncak Niaga Holdings Berhad
Seller: Shin Yang Holding Sdn. Bhd. (shareholders include Tan Sri Datuk Ling Chiong Ho)
Acquisition price: RM 446,505,690.45 (I can’t really justify this figure, it’s said to purchase 9766.9hectares at RM 18,500/acre and 33,372.60 hectares at RM 3,500/acre. Thus, total should be RM 735,116,988 while 60% ownership should be RM 441,070,193.30)
Date of announcement: Oct 17, 2016
Palm Oil price during the month: Should be about RM 2,600
Land (location): Murum District and Silat District, Sarawak (Lot 13-15, 18, 20-23, Murum District, Lot 1, Silat District).
Land (size): 43,139.5 hectares (planted: 9,766.9 hectares, unplanted: 33,372.6 hectares)
Palm age: Less than 18 months 7,258.10 hectares
More than 18 months 2,508.80 hectares

Why is the deal unfair?

1. The land in both deal should be in similar location, given its Murum District’s land that’s mentioned in the deal. The seller has a common shareholder, Tan Sri Datuk Ling Chiong Ho with the announcement date around the same time, one in July 04, 2016 and the other Oct 17, 2016. I would expect the deal to be completed at a similar valuation.
Assuming unplanted land is valued at RM3,500 per acre in both deal (I can’t find the valuation in Sarawak Oil Palm’s deal), the unplanted land value of Sarawak Oil Palm shall be RM 58,568,827.10 (=6,772hectare*2.47105acre/hectare*RM3500/acre). Thus, the value of the planted land in Sarawak Oil Palm’s deal should be RM 814,437,047.90 (RM 873,005,875.00 – RM 58,568,827.10), or RM 13,849.55/acre (RM 814,437,047.90/(2.47105x23798)).
That is to say, Puncak Niaga is paying RM 18,500/acre for planted land while Sarawak Oil Palm is paying RM 13,849.55/acre. What’s more, in Puncak Niaga’s land deal, most planted land, 7,258.10 hectares, has plant age less than 18 months! Meanwhile, Sarawak Oil Palm’s deal has most plants age above 4 years!

Per hectare, the planted land in Puncak Niaga’s deal is RM 45,714/hectare while the planted land in Sarawak Oil Palm’s deal is RM 34,222/hectare, a huge difference of RM 11,492/hectare. Why should Puncak Niaga paying such a huge premium for a much younger trees?

2. What’s more worrisome? Puncak Niaga is only buying a 60% stake. Question is if Puncak Niaga intends to acquire the rest of 40%. If yes, what would be the price? If the rest of 40% is acquired only after the planting is completed, does that mean Puncak Niaga’s minority shareholders have to shoulder another overpriced planting cost of RM 11,492/hectare? There are 33,372.6 hectares unplanted in Puncak Niaga’s deal, that would mean Puncak Niaga is on hook to at least overpay another RM 154,407,167.68 (RM 11,492/hectare*33,372,6hectare*60%.)

The above is work-in-progress, please do let me know if you have found any error. Thanks!

My apology, was not feeling well yesterday and not able to finalize my work. Will work on the 2nd piece on the plantation deal as soon as I can.

Puncak Niaga's quarter report analysis:

Q1 2016 quarter report offers the following information:
Revenue: RM 13.2 million
Cash & bank balances RM 334.942 million
Short-term investments RM 927.177 million
Total assets: RM 1,809.468 million

Based on the above, the cash & equivalent + short-term investment as a percentage of total assets is: (334.942 + 927.177)/(1,809.468) = 69.75%, a number which is very close to 70% to be classified as PN 16 company that will require Puncak to submit proposal on its business plan.

Q2 2016 quarter report offers the following information:
Revenue: RM 10.573 million
Cash & bank balances RM 280.358 million
Short-term investments RM 906.065 million
Total assets: RM 1,754.250 million

Based on the above, the cash & equivalent + short-term investment as a percentage of total assets is: (280.358 + 906.065)/(1,754.250) = 67.63%. Some might have thought the drop in short-term investments has resulted in the drop. However, if one look at another item on its long term asset, there’s a other investments of RM 63,713 million, a level 3 investment. I have strong suspicion the purchase of the L3 asset is nothing BUT to avoid being classified as PN 16 company. How so?

By adding this L3 investment into the cash & equivalent + short-term investment as a percentage of total becomes (63.713+280.358+906.065)/(1,754.250) = 71.26%, an important criteria for Puncak to be classified as PN 16 company. If the purchase of L3 asset not to avoid PN 16, I would wonder why just an amount sufficient to avoid breaching the 70% cash company criteria.

I was wondering if Securities Commission will act on this on behalf of minority shareholders?

hng33, its one thing uncles aunties talking economy collapsing in the coffee house, and its another thing bank governor saying economy collapsing in a parliament hearing... Stock analysts' reports are somewhere in between. Also, its one thing making a forecast based on right numbers and another thing making a forecast based on wrong numbers yet pretending nothing is wrong!

trying to finalize my finding, will post together with balance sheet analysis sometime tomorrow...

Having compared the Sarawak Oil Palm's plantation deal, I just realize that Puncak's deal, both in similar location with Puncak's landing on much younger tree profile but at a premium, is a rip off on minority shareholders! Still trying to double confirm the numbers. Any of you good at the numbers, please read both deal carefully and voice your concern...

I have to email this to CIMB first, but need shareholders' support such that CIMB knows they are not dealing with one shareholder only. So, if you are a shareholder and have deep concern reading the CIMB report while agreeing with what I have said, please email them to show them you have deep concern over the analysis too.

think will need at least until March 2017 before showing anything good on balance sheet of income statement now. Thought could see some differences before Sep 2016 earlier, sigh!

cfoong, our government wants money money money.... you may be right if you were to say our government dare not roll out sports betting license to make peace with the religious people, but to assume losing betting license? Why? So somebody can make more from the underground market? LOL

Dear Mr. Rosely,

Having compared your three research articles on Puncak Niaga Holding Bhd. dated Aug 25, 2015, Feb 25, 2016, and Oct 18, 2016 (attached), I have noticed (1) a sudden change of view on Puncak Niaga post disposal of water asset on article dated Feb 25, 2016 and (2) an error in your analysis that has wrongly increased Puncak Niaga Holding’s FD shares with a detrimental impact on your analysis.

(1) On your article dated Feb 25, 2016, you have used the FD number of shares at 532.5 million, assuming a full conversion of convertible sukuk. However, on Dec 03, 2015, Puncak Niaga has, through Bursa Malaysia, announced the repurchase of sukuk at a cost of RM 200 million (http://www.bursamalaysia.com/market/listed-companies/company-announcements/4941665 ). The repurchase has in effect made the FD number of shares at 452.5 million (5.27 million warrants + 449.3 million shares outstanding – 2.04 million treasury shares). This would have affected your valuation of SOP value per share by a great margin. Your reported SOP value per share of 2.20 would have increased to RM 2.59 per share assuming your SOP figure in Feb 25, 2016 article is ‘correct’. This mistake has been extended to your article dated Oct 18, 2016 that has still assumed the sukuk conversion. I was wondering how it is possible for you to commit such an obvious mistake. This is especially so given that in your earlier article dated Aug 25, 2015, you have come up with a SOP value per share of RM 4.25. Hasn’t the sharp drop in SOP number alarmed you to at least double check the numbers before finalizing your report with report disseminated to readers and published in newspapers?

In addition, based on Puncak Niaga Bhd’s 2nd quarter report (http://www.bursamalaysia.com/market/listed-companies/company-announcements/5186601 with file attached), its balance sheet is sitting on net asset of 3.62 per share after heavy impairment in FY 2015 while you are stating a SOP of 2.20 (2.59 assuming you have had the sukuk mistake corrected). Of which, the cash and cash equivalent is at RM 1.25 billion (of which, 63.713 million as other investment, 906,065 million as short-term investment, and 280.358 million as cash and bank balances.) Even after deducting short-term and long-term liabilities of 138.377 million, its net cash will still at 1.117 billion, i.e., RM 2.47 per share. Before accounting for your error, your SOP is less than net cash per share by RM 0.27 per share. Even accounting for your mistake stated in the above paragraph, you are leaving only RM 0.12 per share or RM 31.7 million for the rest of Puncak Niaga Bhd’s asset. Your professionalism is in serious doubt!

(2) On your article dated Feb 25, 2016, you have taken a 50% discount to SOP value. Meanwhile, in your article dated Oct 18, 2016 on the purchase of palm oil estate in Sarawak, you have deemed the deal reasonable and upgraded the target price by RM 0.03 per share, an increase of valuation of the firm by less than RM 16 million (RM 0.03 multiplied by 532.5 FD shares) even the purchase is valued at RM 446 million. I was wondering how you come up with the upgrade of RM 0.03. By throwing a dart on a board full of numbers? Or, despite finding the deal reasonable, the addition of the plantation to Puncak Niaga should still take another 50% discount (well maybe slightly less given your ‘upgrade’ of RM 0.03)?

(3) In your article dated Aug 25, 2015, the Selangor water deal is yet to be completed with cash held by the Selangor state government. However, in your article dated Feb 25, 2016, the Selangor water deal has been completed with cash fully disbursed to Puncak Niaga Holding Bhd. In your discount to SOP value, you have adopted 40% in Aug 25, 2015 report but 50% in Feb 25, 2016 report. It’s as if, to your professional logic, the cash yet to be received has a higher value than cash in the company’s hand. If you have doubted the credibility of Puncak Niaga’s management to deserve a higher discount on cash in hand, shouldn’t that you have to warn your readers in your Aug 25, 2015 report and applied a similar discount to Aug 25, 2015 report? Or, you have only realized the management of Puncak Niaga is questionable only after Selangor state government has disbursed the fund? Or, could it be the dismal outlook on oil and gas industry has a ripple effect on the cash held by Puncak Niaga? However, from what I know, the crude oil price has been pretty much the same on around the dates of your three articles. Your ethics is questionable!

I am looking forward to you relooking at your analysis and addressed the abovementioned doubts that I have mentioned. Given that your earlier articles on Puncak Niaga Holding Bhd. has been disseminated to other readers as well as newspapers, I am expecting your new work to be similarly disseminated to other readers and newspapers with clear comparison on how your earlier analysis differed from the new one.

Any of you know how to post blog here? I have written an email to CIMB's analyst on his questionable articles on Puncak Niaga. If you are shareholder, and agree with me after seeing my article, please email him, together with the research team heads as follow:

Regional Michael William, GREENALL
michael.greenall@cimb.com

Malaysia
Ivy, NG (CFA)
ivy.ng@cimb.com

Puncak Niaga's analyst
Sharizan Rosely
sharizan.rosely@cimb.com

My email is in the next posting

think somebody makes money from the plantation deal, just don't know who. Fishy!

Holding up quite well, hopefully Vietnam Toto's business impact will begin to kick in after New Year or Chinese New Year...

Think its best to assume BJCorp shareholders have to hold at least 1 year before seeing any light, that's assuming Vietnam Toto is growing well and the asset disposals are close to an end...

eddysurge, quite frankly, don't really like bjland, and I bought BJCorp only because are getting better with its going nowhere property projects and the potential of Vietnam Toto (Been wrong so far with this counter, well many others.) Money tied already, but will read Vivocom annual and quarter reports. Thanks.

eddysurge, the key is those issues are not addressed in public yet and reflected on balance sheet...

there is no hope until either (1) the Vietnam toto sales are showing in the quarter report (2) Jeju court case big win or (3) sale of China property project completed with cash received to lower interest cost + Ritz Carlton Residences completed with high sales %

look at triplc quarter report and you still want to buy?

i will oppose the deal unless a cash opt-out for shareholders not trusting the management is offered!

the more I read into the plantation deal, the more I don't like about the deal...

Berjaya, yes, nobody is saying its easy to run conglomerate or big businesses, but those running are well paid and EXPECTED to be fired if businesses run south!

Berjaya, BJCorp share price going down has begun years ago, economic uncertainty and local issues clearly are only a small force behind it.... Failed property projects, from China, Jeju Island to Vietnam are the key reasons, delayed property projects in Malaysia (Menara Bangkok Bank/Ritz-Carlton Residences) and Japan (Four Season Hotel) are helping to squeeze the company cash flow, and high leveraging is not much help. Of course, the way BJCorp treats its shareholders exacerbate the situation...

bullwinds, thanks for the update... Guess will have to hold at least another year to two before seeing any improvement in BJCorp's performance, earning-wise and share price-wise.

CIMB's report can't even get the fact right, and you are citing his conclusion? LOL...

VT not good cook, what a joke! Anyway, based on share price after AGM, sincerely doubt anything good revealed by them...