1) On Sept 13, Alwong wrote:

现今摆在大家眼前的事实是有董事戥穿钱柜,

Share price manipulation is one thing. Disclosure compliance is another. But to accuse directors of really siphoning money out of Liihen is an extremely serious allegation. Please provide your proof for the benefit of everyone, especially the minority shareholders of Liihen.

2) Please do not compare what your camp is doing with Carl Ichan. I do not see any business acument emanating from all postings from your camp, only repetitive legal nit-picking. A minority shareholder with 100 units of share suing for petty issues in AGM is saying a lot about the ulterior motive behind the whole negative publicity campaign being launched against Liihen.

I certainly welcome a watchdog for Liihen, but please live it up to the billing. Do it constructively, productively and meaningfully.

哈哈, 没办法。 他们也是按照上头指使行事。

Haha, Calvin was getting hyperbolic! Good products show in the form of good sales and operating profits. Can PM Corp's chocolates take on Nestle? Not by any stretch of imagination as business competition is cruel. Operating cost of PM Corp looks within control lately, which is important to stop money going out slowly from PM Corp.

The real issue is whether the minority shareholders collectively can nail the major shareholders down on a specific regular intervals for dividend payment. This is to ensure value is regularly released out to minority shareholders.

Otherwise, the next 10 years will not be any different from the past 10 years as the major shareholders treat PM Corp as if it is all his, while the minority shareholders continue to get trapped.

The minority shareholders or outsiders should collectively send an offer to buy all the shares held by the majority shareholder (which will not get accepted anyway) or risk being trapped.

There are many such companies on KLSE.

The poignant question to ask perhaps is that if PNB could not get the major shareholders to pay dividend or make captial repayment after many years and had to sell at a loss at the end, what gives hope that other minority shareholders will get better treatment going forward?

Around 10 forummers here who attack Liihen only started their first posting on i3investor after Liihen announced its Q2 13 results on 20 Aug 13. They said and recycled the same issue often within a few minutes of one another, suggesting possible multiple IDs being used by a person. They solely or mainly wrote on Liihen with no or few remarks on other counters.

Likely, they work for some people who want to see the share price of Liihen crash. As to why, it could be because they lost bitterly in 2004 or more likely, they want to collect Liihen at as low a price as possible. If the latter is true, they should already have built a position in Liihen long ago and likely were the one who drove Liihen price up to RM1.90 in Aug 13 before unloading some shares prior to Q2 13 result annoncement. So, they actually could be collecting while they run Liihen down in the past month. The some people here may also be a party interested to buy over Liihen one day and are trying to buy at as low a price as possible. Of course, there is a forth possibility that they are working for the remisier now being charged by SC to sling mud on the 2 directors of Liihen in order to extricate himself from the charge.

There is no free lunch in this world. A web-site was set up just to run down Liihen. A shareholder of 100 unit shares files a suit against petty routine in AGM. All these look too abrupt.

A true shareholder would want to ask more about business prospects in coming years, asking question about the basis of related party transaction pricing.

Liihen is a minority of companies on KLSE who pay dividend quarterly. Liihen has forewarned slow business ahead as early as during Q1 2013 results announcement and again in Annual report 2012. If anything, it is exemplary a practice on disclore and dividend policy.

Liihen has set up a formal charter on ethical conducts a few months back. If this is a result from complaints from a group of minority shareholders, then we have to thank these minority shareholders as transparency and ethical conducts are important.

The AGM fiasco actually results from the chairman's inept handling of an aggressive questioner. In responding, the largest sharehholders did not re-elect the chairman. Again, I find it a good response.

Their English may not be the best but dividend does not cheat and they have been paying constantly at least about 30% of their net profit as dividend. Backed with RM2.3 net assets, mostly in the form of land and buildings due for revaluation in 2014, the value Liihen presents is good at RM1.45.

Yes, by all means, if the 2 directors have flouted laws in 2004, they should face the laws if there is evidence of wrongdoing proven in the court. Whatever happens to the 2 directos, if anything at all, it is quite clear that the business is a sound one as it has access to upstream rubber wood and a good customer base and there should be some buyers (especially overseas furniture makers wanting to achieve synergy on customer base or raw material requirements) interested to buy over the business from Liihen at at least RM2 a share. I do not think Muar Asset will let the business go at below RM2.50 to RM3 though.

Time will tell. Happy attacking on one camp and happy collecting on the other, although both camps may house the same people. Again, this is an open market. Make your choice.

Thanks Calvin for sharing.

The value indeed is there but it has been trapped for the past 10 years or longer. Capital gains from its assets and investment need to be realised into cash before the cycle turns. The potential of PM Corp comes mainly from passive unrealised gain on investment or property we do not know when they will realise.

Profit from its normal operation is minimal. Worse, typical of all companies in MUI, they do not have a formal dividend payout policy. The RM90m cash has been kept by the company for ages and as shareholder of PM Corp, you may be worried that it may one day be used to help other ailing companies within MUI via intercompany loan.

Please continue sharing esepcially on the status of capital repayment and dividend. Thanks.

Hi Kcchong, when you are back from NZ, please let me know. I spend not more than 2 months in a year in KL. Still, we should be able to make a meeting with like-minded investors happen.

I just looked at Fibon. Its AR is rather high at around 3 months of sales collection period, and is higher than total net profit of the year. Net profit plunged after the 2008-09 crisis.

Still, depending on valuation, it is a good bet on Fibon's recovery of profit to pre-crisis level, which will send the price up to 60sen. That may take at least 2 years, I guess.

It would be good if we can have a small gathering to discuss our common interest of shares in KL. I would love to join.

I am not sure if 8% for lacquer, thinner, etc is reasonable as a component of production cost of furniture. I can live with it though. I was just rectifying the statement up there that states it is RM21.6m+RM2m every month whihc is grossly misleading.

Recurrent related party transactions exist in some companies and those who are not comfortable with the amounts should not hold the shares of that company.

It is an open market. We just have to make our own decisions.

As I clarified before, RM21.6m and RM2m is annual sum. The frequency of these types of transactions is monthly. So, this is not a valid point as RM24m is small compared to annual turnover.

I have checked Bursa again as follows:

1) In the whole 2004, CLS bought 56K units of shares at below RM1.10 while TBE sold 508K units of shares at RM1.81. There was no other share transaction involving either of them or Muar Asset in the whole 2004.

2) In Oct 04, there was an announcement that Muar Asset accepts a proposal to buy all its 32%-stake shares and will proceed with documentation. This offer has lapsed in Nov 04. No price was mentioned in the announcement and neither did Bursa issue a letter demanding the disclosure of price of 32% share sale mainly because it did not trigger the 33.3% condition for mandatory takeover of the rest of the shares in Liihen.

That much is known to be as facts, and I don't see anything wrong based on the above. David Goh may later reveal something that incriminates others including CLS and TBE to one extent or another for one misconduct or another, in all likelihood. Until some substantive evidence comes out against CLS and TBE, it is wild and irresponsible to attack 2 of them so relentlessly especially by alleging that money will go missiing from company coffer like Silver, etc.

Hi Wahid, in a way, every investor is a competitor to another as each tries to time the best moment or period to buy and sell. Many try to create herd fervor about a company so that he can unload at a high point.

This point is more pronounced in the case of small-cap company without institutional or fund investors like Liihen. Honestly, a person with just RM10 million can make a lot of waves, up and down within a range he thinks as reasonable without going beyond what fundamentals can support, on the share price of Liihen. All shareholders of Liihen should be aware of this characteristic.

But a true investor should focus on just fundamentals. if fundametnals of Liihen change one day like a serious fraud involving the company's money, I will sell it without hesitation.

The scaremongers have no effect whatsoever on my investment decision meanwhile. I just feel that the whole thing of mud-slinging against the 2 directors personally has gone way overboard.

Nobody should cry foul as he has weighed the pros and cons before investing. It applies to those who buy in today as well those who bought at RM6 9 years ago. It is true of any investee company or non-equity investment for that matter.

Jenny 6088, my estimated EPS for Q3 is 4sen to 6sen. USD has been strong in Q3 but sales may not have bottomed. So, be prepared to sit longer with Liithen if need be once you have bought in. It may take a quarter or two more before we see 10sen quarterly EPS again. Within next 18 months, I see the fair value of Liihen being RM2.10 to RM3.

On any share, there are both believers and detractors. I like Liihen for its cheap valuation and asset backing.

It is a serious and wild allegation made by some here that Liihen will be the next Silver. It is logical to conclude that they are trying their best to provoke the 2 directors-cum-shareholders and attract publicity.

It is also intersting to try to guess what their endgame is vis-a-vis what they want to see Liiehn' share price to be, having been relentlessly attacking Liihen as a company and the 2 directors-cum-shareholders. Are they bitter losers in investment trying to take revenge of some sorts or are they turning bloodhound because of what they see as justice for themselves? Or are they doing what they think as a social service by creating awareness of potential orporate shenanigan?

As I said, for long-term investors, the lower the price gets, the more attractive Liihen is. So, I keep buying while others are mongering scare. From what they wrote, it is clear they are not shrewd investors, whoever they actually are.

The allegations now made by bitter losers 9 years ago may be summarised as follows:

1) 2 directors-cum-controlling shareholders 9 years ago privately asked a remisier to sell 5m shares which were not held under their names officially.

2) The controlling shareholders 9 years ago asked a remisier to find them buyers of their entire stake in Liihen in an improper or illegal way.

3) They think David Goh, who is being charged by SC and investigated by police for buying and selling shares without change of ownership, will spill beans big enough to implicate the 2 directors in some ways.

4) A few individuals bought and sold shares in Liihen within a short span of time and they fell out with David Goh on how to trade Liihen shares 9 years ago. All ended in tears when Bursa designated Liihen as a counter that needed to be bought wiht upfront cash.

David Goh should be in hot soup likely because of documentary evidence on trading against him and he seemingly violated the laws. It remains to be seen if he will be found guilty.

Beyond that, I think it is hard to make everyone else pays any price.

This is a very tiresome, long-winded narrative on nothing. Can you stop beating about the bush and write a summary of who should go to jail, for what and for how long?

For those who believed Liihen should be worth RM6 or above a share 9 years ago, they only had themselves to blame, no matter what kinds of rumours were then circulated by analysts on newspapers.

Year in year out, we have speculation of all kinds that catapult some shares to dizzying height without apparent justification. It is funny to try to take revenge now for a loss caused by their own greed and sheer ignorance 9 years ago.

Speculation comes at a price and share market offers both outsized returns as well as gigantic losses for speculators.

Go and milk a new cow and stop crying over spilt milk. :D

In Q2 2013, RM1m has been paid or provided for bonus and incentive so that this need not be done only in Q4, as was the case in 2012. EPS for 2013 is revised down from 30sen to 25sen. At RM1.7, PE is 6.8. Not expensive a counter. The counter is dominated by retail players as there is no fund which has bought in. So, the sell-off this morning is expected largely because of the slash in dividend for Q2 as well. For long-term investors, again, this is a good chance to accumulate.

YTL-no-Power.

This article is really far-fetched, frivolous even, seemingly coming from someone who desperately hopes to push down Liihen share price by fair means or foul. The management of Liihen has imrpoved by leaps and bounds with increasing dividend especially since last year, to be fair. Investors should focus on the fundamentals of its business which has improved by a great deal. As said earlier, those who bought in and did not sell during 2004 share rally have only themselves to blame as they did not pay heed to the obvious fact that the price then was bought up to a level disconnected from its fundamentals. I went through the announcements made in 2004 and there were nothing wrong with them. If the directors colluded with the remisier in question in manipulating share price, then they would face the laws in their personal capacity. It has nothing to do with the company proper. So, I find it vert funny that some bear a grudge against Liihen, the company, to the extent of magnifying neglible administrative routines during the recent AGM beyond all proportion.

DJDJ, thanks for sharing. Jenny, to me, Liihen is a strong buy till it reaches RM2.10, despite some negative views on governance of Liihen. The related party transactions are small as a % over total turnover- defnintely not 40% as claimed in one post there. This is a share which no funds have bought in yet. When funds go in for its dividend income, this share should trade between RM2.10 to RM3. If retail investors are influenced by negative perception, the share price will have difficulty climbing up to RM2.10. This suits long-term investors well as they can enter at current low price of RM1.62. I have confidence in the sustainability of its profitability and dividend over the coming 3 years. EPS a year should be at least RM0.30 on average for the next 3 years.

The management's comment in Q1 2013 was that it was operating with excess capacity and some customers were holding relatively high level of stocks. This is a negative remark. Besides, Q1 2013 EPS of 10sen was also partly a result of some deferred shipment from Q4 2012.

But I like the management as it is very prudent in giving out commentary on outlook. The strengthening of USD from May 13 onwards definitely helps on profitability.

All-in, my estimate of Q2 2013 EPS is 6sen to 8sen EPS. Looking further, Q3 2013 should be an improvement over Q2 2013 as USD strengthens further as we type now and management has more time looking for more customers as alternative to some customers that hold high inventory. I stick to my estimate of RM0.30 EPS for the whole 2013.

I expect a dividend of 3sen per share in Q2 2014, although 4sen is equally likely. Being in net cash position and relatively little capex, the most appealing part of Liihen is its ability to increase dividend rather easily, if the management wants, giving a boost to share price almost immediately.

I also like the fact that its NTA of RM2.30 per share is backed almost overwhelmingly by factory buildings which were last revalued in 2009. Even if we exclude the going-concern value of the business, the buildings alone are worth RM2.30 per share.

But of course, the main reason I like Liihen is because of its low valuation of PE 5 only, high dividend yield of >8% and a profitbale business model that looks sustainable after they have obtained the right to plant for rubber wood, thereby making raw material's cost and quality more controllable.

Liihen should be traded at RM2.10 a share now, not RM1.70. RM2.10 means a PE of 7 and a dividend yield of 6.7%, which to me, is more reasonable a valuation for Liihen.

From the current price of RM1.72, the upside is quite big at 22% towards the first target price of RM2.10. EPS of RM0.30 for whole year of 2013 should not be a problem.

As the world economy continues to mend, a EPS of RM0.40 is achievable for 2014. If dividend is raised from the current annualised RM0.14 to RM0.16 or RM0.2, this company deserves to be valued at RM2.50 to RM3 a share.

As the name suggest, this is not a black horse. :D

Deferred income as liability on one side is corresponded by cash and bank on the other, both balance sheet items. Its cash and bank has reflected benefits from future (franchise) income. Profit recognition in income statement is not an issue.

You are sharing good articles diligently with all. Thanks.

The surge in price in 2004 was prompted by an announcement of a potential buyer interested to buy stake from Liihen's largest shareholder. The offer was later left to lapse. Fast forward that to today when Liihen has been registering improving profits and high dividend yield, it is not a surprise at all if there is a buyer keen to buy the same stake at a PE of 7 to 10 which translate into RM2.10 to RM3.00 a share.

TTB has been an underperformer for quite long. Icap shareholders were naive and a joke for idolizing and backstopping him in the power struggle last year. Icap share price has not moved much and the shareholders asked for it.

Pluses:
1) The epicenter of the current global economic recovery is US housing industry, the mainstay of Liihen's sales.
2) Strong USD
3) 2013's estimated 30sen EPS and 14sen DPS translate into 5.4 times PE and DY of 8.7%.
4) RM2.35 NA per share with most of them land and factories which are supposedly due for revaluation next year (last was 2009). RM0.20 increase in NA per share is expected in 2004 after revaluation.
5) Net cash of RM0.28 per share, enough for 2 years of future dividend.
The only reasons why it has not reached RM2.10 is because some fear governance issue which stems from 2004's unusual surge in share price. That was 9 years ago and it is time to look ahead. At RM2.10, the DY is still 6.7%. The current price is a steal.

A&M is a classic case of value trap. It has excellent landbank but it will take a few decades to realise it into cash. All net profits will go to directors' remuneration in coming 20 years. Its boss runs the company like his, with no regard to minority shareholders who need dividend. If only its boss decides to sell assets, the price will go to RM2 easily but it will not happen as he brings in all relatives and family members to benefit from the company's net profit generation after generation.

Estimated total amount of RPT to be entered into by Liihen in the coming 1 year is Rm25m, which represents 8.5% of total cost of sales in 2012.

What Xingxian wrote is incorrect therefore as the amounts are all yearly, not monthly.

I have upgraded annual EPS from 35sen to 40sen for 2013 and into foreseeable future. A PE ratio of 7 is reasonable and that suggests a fair value of RM2.80.

Due to good results in Q1 2013, I upgraded 2013 EPS to 30 sen from 25 sen. 30sen EPS should be sustainable in the foreseeable future desptie some volatility in earnings throughout the year. A fair PE should be at least 7 times which points to a fair value of RM2.10 a share.

My Q1 2013 estimated EPS is 6 to 7 sen, given the minimum wage implementation. Dividend should be 2 to 3 sen.

For Q2 2013, the weak USD will affect its results.

Q4 2012 was good but the management took a big chunk of the profit as year-end bonus and incentive for themselves and other staff. This took the shine off an otherwise excellent 2012 results.

Throughout 2013, they should be able to raise prices of their products to somewhat counter the minimum wage and weak USD impact.

All-in, 25 sen EPS is what I hope can be achieved for the whole 2013.

The problem is it still does not want to declare dividend more frequently or higher in amount or adopt a formal dividend policy. If it can pay 15sen per share a year, it can pay dividend for 5 years using the cash it already has now without considering future profit. If that happens, the share will go up to RM1.80 hands-down. One month of minimum wage has been included in the latest quarterly results which were excellent. So, 3 months effect in the next results announcement in June 13 will not be so bad. I think it can maintain 8 to 9 sen per share a quarter. Annualise it and you will get about 35sen a shaer a year. So, this share is very safe. The sad thing is the directors are not sharing the profits with the minority shareholders via a more reasonable dividend payout than the miserable sum it is currrently paying.

The high household debt/ GDP is a real concern but not a surprise in a property up-cycle. The deficit our government runs has to be paid for one day by us and our next generation. It has to be scaled back into slight surplus within the next 10 years via stronger economic growth, higher taxes, new taxes like VAT or our government will risk having to pay higher interest on our government bond once foreign investors' interest or confidence in Malaysian economy wane. So, it is "spend now pay later" strategy of our government. Fiscal implosion will cause social upheaval. Just like at Greece, Cyprus and many European countries. A well-run economy is Germany's that run budget surplus and save money for the future generations. God bless Malaysia.

Do you guys have any meet-up, yamcha or brain-storming sessions? Please let me know if you do as I would like to join. thx

ROE, free cash flow, PE, DY, NTA and many other yardsticks are important in determining intrinsic value of a company. The lower that value is compared to the current market price, the bigger of margin of safety you get if you buy in. Free cash flow here is one for equity holder which is profit after tax + depreciation and amortisation - capex +/- working captial changes.

Again, the risk is acutally a hung parliament and whoever wins does so with the slimmest of margin, resulting in interminable accusation and recrimination. The jitters and uncertainty may last for a prolonged period of time due to fear over or actual absence of government of economy, social unrest and outright riots.

E is equity and is also net assets used by the company. The higher ROE, the better is the business profitability relative to the resources it has accessed to.

The queue to listing on SH and SZ is long and lead time is about 3 to 4 years. HK listing is expensive and SC there is more stringent on main board unless the companies go for GEM. In any case, ICAC is rigorous in fighting corruption.

On the other hand, KLCI is thirsty for overseas companies. The inherent risk however is that sharehodlers and diretors based in overseas are beyond the reach of Malaysian SC. There are many ways to defarud minority shareholders (I can think of 10 methods easily) and any investigation of overseas companies will take years and probably end without conclusive findings.

Cold-eyed's answers on unbelievably cheap China companies were disappointing. The plain answer is the risk of disappearance of the companies. No matter how cheap it is based on market-price vis-a-vis book values, the shareholders in Malaysia bear the inherent risk of losing everything they have invested.

Almost all do not pay dividend and the very few who do give only miserly amount. Most run the business as though it is that of major shareholders'.

No private equity fund, big investors or syndicates dare to push up the market price because that might be what the main shareholders are waiting for: to move away all cash and assets in China from company to themselves, sell all their shares to you in open market, get the money from share sales. Double happiness to them.

The answer has never been just negative perception. It is real, actual risk. Otherwise, who need to work in this world.

Prolexus has improved its financial position by a lot in past one year. 3 unknowns: capex requirement in coming years, impact of minimum wage implementation, absence of formal policy of committing a % of earning to pay dividend. Thanks for the suggestion.

Dividend yield for Wellcal is 6.7%. This gem is no longer hidden, having shot up 92% in 2012. The next impetus before it can move up to RM2.5-RM2.60 is conclusion of land deal that has been delayed as seller needs more time to convert the land from agriculture to industrial use. The coming quarter should see 4.3 to 4.4sen EPS and 4sen dividend. A good defensive play during GE as it exports 92% of its products and as they have 40% capacity expansion in the pipeline to be commissioned in 12 months. It works in replacemet market and resilent. But its reliance on OEM manufacturer has caused it to pass on some cost savings to this category of its customers. Still the fair value for Wellcal is RM3.00 per share in 12 months.

Another interesting play is Protasco which has added a company in oil and gas in Indonesia. The profit guarantee suggest an IRR of around 15% which is quite reasonable. The pricing for private placement in coming weeks will be interesting. If the Indonesian unit performs as envisaged, Protasco's fair value should be around RM1.50.

The unknown in Wellcal is smaller than Protasco, therefore safer. Protasco in turn has better balance sheet than Johotin. Johotin is also interesting but I am not sure if its product pricing power is strong for its dairy produc division. If it can keep growing its dairy division's GP, Johotin is worth at least RM2.30.

GCB reminds one of Olam. If FCF is nil, no point wasting one's hard-earned money on it.