PE 42. Target price rm0.20 max.

Tax credit will disappear next quarter and the current normal results are about 2 to 2.5 sen PAT a quarter they are trying to maintain going forward.

Challenging operating environment is advised by the management. Their focus is centred on trying their best to maintain the current results.

Below 90sen, boleh consider buying.

Pe60, as frothy as pmbtech n ql.

If You had bought Xinquan at any price, be it rm1.50 or rm0.1, you still would have lost 100%.

A downstream company couldn’t get good results when the oil price shot to usd80 but is expected to do well in the current environment of usd60 oil? This may be the lagging effect of contract work secured back then and is being recognised now as revenue n resultant profits. Past records don’t side with this company. The concern is unsuccessful replenishment of such high-margin contracts in the future. Erratic profits may surface in coming quarters.

Inari’s future profits are expected to decrease. Insas’s future profits likely dip as a consequence.

No need to fight. Those who believe gross overvaluation of QL like myself have stated our views and so have believers like Mr Long number. We can certainly agree to disagree. Let the market decide.

Nothing has changed since 2012 when Kyy (who recommended it) was warned of the rm1b loan which still sits there today while the share price has since plunged 75%.

Where’s it stated that dividend policy of 30% has been adopted?

Maybe Mr long number followed our advise and started to take profits. Haha

Do more projects loh. Quantity compensates for profit quality. That’s the only way.

The management has commented that they will enhance the competitiveness of their bids to win new projects given the challenging operating environment. This means profit margin will shrink in the future.

Naturally a shareholder will b concerned about:
1) capital expenditure required throughout the production stage of the oil fields as this drains cash flow significantly
2) total viable reserve in each oil field as this spells the end of oil production and when that end comes
3) scheduled maintenance time
4) when dividend can start if oil price stays around usd60 for Brent
The value of the biz can b rather easily computed in t discounted cash flow worksheet if the oil price projections hold. Every investor in Hibuscus must do that before investing.

Next quarterly profit after tax may be very roughly guessed at RM74m, or eps 4.66sen.

Without kyy’s Gung-ho buy-up, any fund raising will be extremely dilutive to shareholders at the current market price.

Congratulations on your success and thanks for sharing.

Just some thoughts:

The supply-demand dynamics of top glove’s products may finally turn one day, having had such a good long run, leading to declining profits due to oversupply.

But QL is more prone to re-valuation to half its current price. Still, the share price of QL is miraculously resilient. Many came up to comment critically especially on QL but none suggested short-selling it. That would be interesting.

So, some caution may be in order. Extremely high PE may not be necessarily indicative of unshakable moats all the time.

QL reported no growth in net profits in the past many years. It doesn’t deserve the current rich valuation.

Too much empty high-rise in Malaysia, which could dampen the company’s project replenishment in the coming years.

He ceased to have faith in Vietnam plant of jaks.

Jaks were beleaguered with hundreds million of bank borrowings. It needed cash calls. Then it floated this Vietnam power plant project. Happily, Kyy jumped on the train with enormous buying of the company shares, making private placements possible at around rm1, twice the level it had been trading.
The controlling shareholder kept the intimate details of profit projections from Vietnam plant to himself. Kyy didn’t dare to launch a hostile takeover of the company as he does not have the confidence to be able to run the Vietnam plant with his people.
From nil to 30% shareholding, and back to nil, Kyy went from euphoria to despair on Vietnam plant. He was sufficiently warned about the high bank borrowings of the company and the uncertainty of the Vietnam plant all along.
He learnt a rm65m lesson. And the winner is clearly the controlling shareholder, Ang.
Kyy would have passed as just another investor but he wrote many times encouraging people to buy with him all the way up to rm1.60, citing the tremendous profit from Vietnam plant, and ridiculing his detractors for not examining their records. After a few months, earthquake struck. He started to sell aggressively and conveniently attributed his huge selling as margin calls. Worse, he wrote subsequently that he was quite done with his selling and jaks was good for trading at 90 sen. Soon after that, jaks plunged all the way to 40sen, thanks to his clearing of all his position in jaks. This I think is very bad.
We saw it all in jaks vis-a-vis Kyy. Post-kyy, jaks would evolve with bank borrowings now down a few hundred million, I.e stronger. To be sure , jaks need to earn cash profits from Vietnam plant and then formulate dividend policy to share the profits with all shareholders in coming years so that it scale rm1.50 once more. Till that happens, jaks should trade between 40-60sen.

Fair value: RM5

The shareholders are FRAMED by margin compression.

The dividend may be lower this year.

Average selling prices at Padini stores have come down substantially to suit shrinking Malaysian consumer pockets. The tough time will stay for some time as many mainstream brand stores are selling clothes between rm19-rm39 a piece.

One billion ringgit loan whale!

Jaks now have much less borrowings than a year ago when kyy bought it. Why he was willing to hold at rm1.50 for greater risk of over-borrowings then but not at rm0.50 at lower risk of over-borrowings now. The risks concerning Vietnam power plant remain pretty much the same meanwhile. Why was his golden rule met then but not now?

The losses may encore and the impression is bad. The story of Impression Melaka was oversold but the tickets remain undersold. The worst fear here is that it may turn into a white elephant. Shareholders likely have to wait for a sustained surge in Chinese tourist arrival to watch the Impression Melaka in order to turn in a profit for the company. Till then, the downward pressure will persist for some time.

Price plunged due to greater uncertainty in Vietnam power plant? The company still needs to raise fund as its bank borrowings remain high and future cash flows will come mainly belatedly from the power plant. At 50 sen, dilution from new share issues will be serious. In the first place, that banks didn’t refinance the company’s existing loans and the main shareholder didn’t buy more shares via new placement in anticipation of super-profits from power plant has been alarming enough. Those who plunged headlong into Jaks shares at high prices will have anxious times ahead. Only good news from power plant can move the share price back up.

Directors take home rm10m a year remuneration. A big portion of that goes to the controlling shareholder who treats the company as his. The other 26,000 shareholders share rm7m dividend a year.
A company absolutely doesn’t need profitability to redeem preference shares. It only needs cash which it has aplenty from past profits.
The 2 sen dividend this year is a good start. But Insas is a typical case of self-serving controlling shareholder. A value trap. You see its value but you won’t get to receive it as minority shareholders. It has been so for 10 years.

Jaks need to do nothing but will take away 30% stake in the power plant and its recurring profits for 25 years. Sounds too good to b true.

If fcf p.a. would b fantastic such as >rm200m, why would the M.D. cum controlling shareholder not do n underwrite rights issue to raise cash so that his shareholding would not be diluted? This is common sense, n I am surprised that even someone claiming to have biz sense cannot see this. Doing private placements in so many rounds doesn’t portray a picture of fantastic fcf ahead.

Banks can lend to jaks, jv as an entity or jv partners and will collect its loans via repayment from whoever t borrower is. In any case, it would not affect capital structure of the jv.

The current EM volatility has nothing to do with Jaks. Jaks’ value hinges on Vietnam Power plant. If it is completed with good recurring profits, it is worth rm1+. Otherwise, jaks will go to rm0.40.

Jack pot or Jack-knifed? All depend on the seemingly very lucrative but also possibly underperforming Vietnam power plant. Interesting.

Lion group has long been notorious for using extra cash of healthy subsidiary companies to pay for debts of ailing subsidiary companies. It happened so many times, this time shortchanging minority shareholders of Lionind.

Asking money from shareholders so frequently is not a good development. If future profit is super as claimed by some and is reasonably certain from Vietnam power plant, why couldn’t Jaks ask banks to refinance its existing borrowings?

Dividend per year going forward should b round RM0.03 per share, after share split n bonus.

The published financials are good and PE low. But the share price is suffering from what market has learnt painfully about China-based companies in the past one decade or two: concern about fake accounting. Start paying dividends and the share price will jump to rm1. Otherwise it will languish around 30sen or below soon.

This company has been for years taking big bank loans and all profits for big capex, with an emphasis on automation, to just stay competitive as a contract manufacturer. It is a price taker. It has no plans to give any dividends in the next 5 or even 10 years during which time the company is expected to remain in net debt position. Not a shareholder-oriented company. It works for the banks and employees mainly. Little wonder the sell-down continues.

A Red chip; what you see on accounts could be make-believe.

Hdd biz has how many more remaining years to run assuming it goes down by 5% a year. 15 to 20 years maybe.

High raw material cost and weak usd will combine to drag down its profits to maybe around rm0.04 a year in 2018.
The downside is big in near term.

I think the market is reflecting the impact of weaker usd on dufu’s profitability. For fy2018, the reduction in profit after tax would b at least by rm7m if ringgit stays at the current level or strengthens. At eps of rm0.10 a year, the share price may fall further towards rm1. For a mainly hdd biz, pe of 10 is quite fair given its rm40m net cash.

The remedy for low share price is simple:

Pay at least RM0.10 dividend a year, and make sure its huge array of assets earn in excess of 4% market yield a year to sustain and increase that dividend over time.

But he has no intention of rewarding the minority shareholders that way or in that magnitude. So, BJ corp deserves its current market valuation. The ball is in VT's court

If the major shareholders are not able to offer a premium over the prevailing market price, why would they still want to make an offer at all to buy out all other shareholders? And in this case, they publicly offer to buy out at 40% discount. How more stupid, selfish or sinister could any offer be? The implication is being felt now as their offer price could be seen by the market as the fair value the major shareholders think the company is worth. Any excess over 80sen is deemed unjustified since the major shareholders know it best and they are running the company actively with all the insider information. Clearly, it is an attempt to chase or squeeze out minority shareholders so that they can buy more shares at cheap prices in months or years to come when every existing shareholder has left. The existing laws must be amended to plug this loophole (of allowing major shareholders to offer buyout at big discounts) which penalizes the minority shareholders, in this case, severely.

As I wrote earlier under Sendai's thread, Sendai's fair value is RM0.30.

Just my take on Sendai:

What does a company claiming to be able to complete RM2b contract work a year in future but has no RM70m cash to pay its debt tell you?

Poor biz model and highly-indebted company. High receivables of over Rm1b (note: risks of significant impairment in the future is super-high and this is a time-bomb) and huge net debt of almost RM900m (note: chances of many more rounds of cash calls are high in coming years).

Past profits have been erratic and in decline, a lot of them still parked in its receivables balances.

Free cash flow in future determines fair value of a company.

To me, it is very clear this company should be worth not more than RM300m. RM200m to RM250 is the fair value I ascribe to it or around RM0.30 a share.

3 tinggi: : Accounts receivable, inventories and net debt are high and/ or increasing. There are risks of inflated profit and/ or bad debt write-off down the road. The biz model is weak.