Posted by shinebright > Sep 7, 2015 02:40 PM | Report Abuse

Where is that kcchongz!


I am here. What do you want to discuss with me?

Posted by chonghai > Sep 6, 2015 11:06 PM | Report Abuse

Kcchongnz, have you did an analysis on SAM or MAGNI before ?


I have written an article on Magni in i3investor less than one and a half year ago here:

http://klse.i3investor.com/blogs/kcchongnz/51356.jsp

In summary, everything seems to be fallen in place for Magni then. It had:

1)It has high revenue and profit growth of 11% and 29% respectively. 2) More important, its ROIC was very high at 24% and increasing.
3)It has consistent good cash flow
4) Its intrinsic value then using discount cash flow analysis with very conservative assumptions was RM3.62
5) It is trading at RM2.69 then, and hence with wide margin of safety of 26% with the conservative assumptions above
6) its fundamentals have improved further from then on.
7) It has clean balance sheet with a lot of cash, a low risk investment.

I didn't know anything about SAM some time ago until a participant of my alumni blog alerted me of that. He made a good call on SAM with its high growth story; a story with earnings visibility and plausibility. I have read about its latest annual report and attracted to the story. PE is not cheap considering the dilution of ICUL, but with the growth, it is not expensive either.

This article below is good for your considerations, in my opinion. This guy knows much more than me.

http://klse.i3investor.com/blogs/undervalue/82224.jsp

Posted by citychew_1886 > Sep 5, 2015 10:08 PM | Report Abuse
Hi KC ,when will your next training class start ?

In order for the course to be more successful, it is ideal to have a good number of people participating. Learning and sharing in a group is more effective way of learning. I have quite a number in the list now, and hope that there are more people keen in the course to start a new one. Hence it depends on the response.

Most people want fish to be given to eat, not bothering if the fish is good or bad. Few are willing to spend time and effort to learn how to catch fish. That is precisely why good fishermen still have plenty of fish to catch in the water.

Thanks for a million for all the kind words. Many of you I know and have been motivating me to continue writing, whether good or bad. I really appreciate it deep down my heart although I did not mentioned or reciprocate. There are many whom I do not know too. I hope you can continue to read my articles and give me constructive feedback.

Posted by kakashit > Sep 5, 2015 09:50 AM | Report Abuse

How is its sub Kheesan? Savvy invesotr Lim Pei Thiam got bought wor, i oso bought in abit last month.

In the AR prospect, the blow water king describe the prospect of KHeesan can only be "GOOD!", ya, they use cap letter and exclamation mark.

Kheesan's financial report is consolidated into that of London Biscuits. They mirror each other like a twin.

I am surprised a savvy investor like you bought into that story of Lim Pei Thiam. Sorry, I don't know him.

Posted by ks55 > Sep 1, 2015 12:44 PM | Report Abuse

Tq kcchongnx. I just can't stand CFA holders already lost their shine with this type of sub standard recommendation.

What has happened to our stock analysts???????????


Stock analysts are very qualified people. I can say that. But I have very strong feeling it is some kind of self interest which induce them to write recommendation for a stock like London Biscuits.

No sane investor, not to say professional analysts will give a buy recommendation for such a stock. It is all written on the wall.

Posted by ks55 > Sep 1, 2015 10:58 AM | Report Abuse
Recommend people to buy lemon at 75 sen?
Where is kcchongnx?

This recommendation mentioned by you recommending you to buy London Biscuit is from a professional, Public Invest.

http://klse.i3investor.com/blogs/PublicInvest/82317.jsp

This article below criticizing London Biscuit relentlessly is from a retail investor.

http://klse.i3investor.com/blogs/kcchongnz/82241.jsp

Can't compare a retail investor with a professional, can you?

Posted by pisanggoreng > Aug 27, 2015 11:38 AM | Report Abuse
I am going to get RM 20k from gadang later . 5k from flbhd tomorrow, 2k from matrix, 5k from favco, 3k from matrix,...
do you think , I will scare of the market crash?


With those stocks, I am not afraid of market crashes too. They are all magic formula type of stocks which are for long-term investment.

Posted by paperplane3 > Aug 25, 2015 09:40 PM | Report Abuse
Kcchong, your elsoft also Holland now!

Posted by paperplane3 > Aug 25, 2015 09:41 PM | Report Abuse
When tide away, we know who is master and who is not, hahahahaha

Posted by paperplane3 > Aug 25, 2015 11:56 PM | Report Abuse
Seems like value investment d9nt work this time


I am not sure of your context of value investing too. Hope you can enlighten us. My context of value investing is described in my two articles below.

What is value investing?
http://klse.i3investor.com/blogs/kcchongnz/53835.jsp

Why value investing works?
http://klse.i3investor.com/blogs/kcchongnz/50988.jsp

Value investing follows a process of choosing stock. No doubt it can get wrong too, but the probability of being right is generally higher.
http://klse.i3investor.com/blogs/kcchongnz/79050.jsp

I am not sure which group of investors you belong to. Maybe you can teach us your way of investing, so that we can make money for every stock, without exception, today, tomorrow, next week etc. and under whatever market condition, even market/markets plunge. It would be better if you can also provide some evidence of your success, the success of a real master in the stock market

Posted by oregami > Aug 25, 2015 07:58 PM | Report Abuse
Sir. I think every stock has an operator. A value trap stock is a stock that fails to attract any operator attention. Some of the reasons are no theme, no good business model, no expansion plan, management too shy from media ect. The operator simply can't find any reason to attract players. How can the operator play by himself?

Good point. I am not sure what is your "operator" means. I presume it is some kind of share price operators, people who "play" the shares, that the business have some kind of "theme", that the management must be famous and vocal in the media to "sell" the shares, big expansion plan etc.

Well, you have your context of what a value trap is, but it is clearly different from what is written in this article. I respect your context and opinion.

Posted by Flintstones > Aug 25, 2015 07:34 PM | Report Abuse
Your kfima is also a value trap Sir


Thanks for your statement. Maybe you should put forward your rationale, what is your context of what a value trap is, and why Kumpulan Fima is a value trap (it may well be one), so that we can learn from you and avoid value traps too. Sometimes I do get things wrong and fall into value traps. I need to curb my cognitive bias of over-confidence too.

In asset light industry, you need little reinvested capital. For a company with ROC of 100%, you only need to reinvest 20% of NOPAT to grow at 20%, theoretically. If you reinvest 50%, theoretically it can grow its NOPAT by 50% a year, if there is such reinvestment opportunity.

As I have said, valuation is an art. I have said it thousand times. There is no right or wrong if you use average earnings, or latest revenue multiply by its ebit margin. I prefer the later because a company grows in size, and using average revenue of the past say 10 years may understate the revenue going forward. Rather I use the average margin.

For reinvestment rate, I look through the last few years and see what is the average, and from there I obtain the structural super-normal growth rate. From there on I assume growth in reinvestment follows the growth rate.

Expected Growth = Reinvestment Rate * Return on Capital where

Reinvestment Rate = Capital Expenditure - Depreciation + Change in Non-cash WC and

Return on Capital = EBIT (1-t) / Capital Invested

digiuser016,

I never use historical growth rate for DCF as it will over estimate the intrinsic value of a stock, taking mean reversion into consideration. In investing we need to be conservative. I prefer sustainable growth rate with formula given by you during super-normal growth, an then terminal growth about the long term growth in GDP, or inflation.

For cash flow, sometimes I use an average FCF over a few years, but often I start with latest revenue and then use the average margin over a business cycle to obtain the NOPAT, and then less off reinvestment needs to get an estimate of FCF.

All the above is an art, and everyone does differently.

Great article. Maybe it is better to have more of this type of article for investor to learn to avoid the pitfalls in investing rather than stock peddling.

Just some comments:

1) It pays to know a little more about financial statement analysis to see that ROE may not be a good measurement of goodness, especially when a company has a lot of debt. ROIC is a better measure. With the inclusion of non-operating income, ROE can straightaway be thrown to the dustbin.
2)P/E ratio may be a little too simplistic to measure price vs value. In this case, the non-recurring income and the heavy debts are not reflected. Clearly enterprise value will show that the stock is not cheap. Low NTA here also doesn't mean it is cheap, as I think the quality of the assets are very poor. Yeah, all packed in inventories and receivables.
3) It appears that the free cash flow mentioned here is not FCF, but cash in the balance sheet. They are different. I doubt, on average, the company has any FCF over the years. Yeah, not even cash flow from operations, forget about FCF.
4) without FCF, the dividend is also paid from borrowed money.
5) Investors will be "rewarded" with rights issues soon judging from the financials.
6) Is that important for the big boss even if the company is not performing? It doesn't seem so with such a fat remuneration.

Instead of just looking at growth in profit and P/E ratio, look for the above first.

Investing is a very difficult job. It is true for small retail investors, true for so-called super investor, and it is also hard for fund manager. I don’t care if you claim that you are the Warren Buffett of Malaysia or what. Investing is not easy. So it is acceptable, and excusable even if a fund manager doesn’t perform, because investing is not easy. But look at the statement from the annual report from the fund manager of icap.

I really surrender to the hubris of the fund manager like what Arv18 have said.

The statement is:

[icap “continued” to deliver “good performance”]

What “good performance”? “Continued” from when?

If I have bought icap 5 years ago thinking of investing for my retirement, what did I get? Less than 30% return in 5 years, while I have been reading how those guys in i3investor making a few hundred percent from their investment during the same period, many of them, while the fund manager has collected more than RM10 m in fund management expenses. How would I feel? Yet in the Annual General Meeting, he is regarded as a saviour of those shareholders of icap.

Taking a swipe at the shareholders, the very persons paying your management fees, in an annual report? Oh my God. If that Lexey Partners have succeeded in liquidating the fund and distributed the money to the shareholders at about RM3 a share three years ago, they would more than 30% more money pocketed then than now, and that money would have made some additional handsome return from then on.

How could shareholders stand that kind of Fund manager nonsense report? It makes me puke. If Warren Buffett were the fund manager, he would have tell in details all the mistakes made candidly and apologize profusely to his shareholders. Nobody would blame him anything.

Surprised how so many shareholders, even outsiders, still treat the fund manager of icap like an investment God.

Posted by duitKWSPkita > Aug 16, 2015 02:02 PM | Report Abuse

KC senior.... Jz met and clear some doubts with the management n together with conservative FA analysis.. After this when recovery take place VS industry will hit RM7 without stokist help... Partly due to Vietnam's income... I will not propose buy call now obviously... Thanks for discussion always.. Sincerely appreciate it


In investing, it is the future which is important. if you have the information about the future which others don't have, you can make a lot of money, no doubt about it. I don't have the information of the future of a company, and hence I have to rely on what has been published. What I share in i3investor is no doubt, history. I don't know its future, and my character is I don't simply listen to what others, including the management, tell me about the future of the company.

Do pay a little attention of the few concerns I have expressed, namely the cash flow, inventories, and the problems faced by its major client. I could be wrong as I have no information of its future.

By the way, what I have shared is for discussions purpose, which is true about the past of VS, could be for other companies, not necessary will be true for the future of VS.

Posted by thomasview > Aug 16, 2015 01:49 PM | Report Abuse
KC, why you tibai and bantai me? No mention you woh, no wind no tremor kena pachukang from you leh. Sikit ku dicini woh


Sorry if I bantai you wrongly. Sorry sorry. Like in investment, I sometimes, not only sometimes, but sometimes can be often, can be wrong too. No malice intended.

Posted by duitKWSPkita > Aug 16, 2015 01:39 PM | Report Abuse

Icon8888...

U cannot like that... I know u had dinner with abang KC Chong last nite in Auckland and watching Dato Lee match together...then today u praise him openly.... Hahahah.. Kidding la..

Actually I like Kc Chong's style in analysis. I am on full FA and value investment now.... Wait until I earn enough then I wanna register for Kc's course.... Malaysia ok la.. Auckland or kangaroo land I nt afford lo


Where got dinner with Icon8888. I can't recall that. Where got watch Dato' Lee? I was watching rugby between All Black and Kangaroo at a pub at Sky City when All Black won handsomely. Shouted until I have lost my voice.

duit, you have your own style of value investing, a proven one too. You don't need to learn from me. Maybe I should learn from you.

Posted by inwest88 > Aug 16, 2015 10:35 AM | Report Abuse
kc, great article. Those using your investment strategies are hardly hit by the current fall in prices.

Thanks for your kind words. But I think in a market which is full of fear, every stock got hit, and hit hard. It is a matter of how hard. Stocks which have little fundamentals, and have gone up in prices way above their fundamentals will be hit the hardest, now or soon if prices continued to drop and margin calls start. Those stocks which have good fundamentals and bought at cheap price will be hit in lesser force, and eventually they will recover.

I would say the best thing I have been doing is providing my views on the evils of margin financing. This is the time reality steps in.

Posted by donfollowblindly > Aug 16, 2015 11:21 AM | Report Abuse
Recommend to buy at RM 3.27 saying intrinsic value RM 4.24. Now RM 1.84 losing RM 1.43.

Posted by thomasview > Aug 16, 2015 11:27 AM | Report Abuse
Aiyoh, good stock but wrong timing to buy in february. Really jialat

Posted by donfollowblindly > Aug 16, 2015 11:42 AM | Report Abuse
Good stock but timing to buy is also important o/w lose a lot of money.

Posted by thomasview > Aug 16, 2015 12:53 PM | Report Abuse
Aiyoh, if bought in Feb kena jialat gao gao tiaw woh, half capital kena tibai gone woh


thomasview (whoever you really are), why? Lost money follow blindly your friend dontfollowblindly when that dontfollowblindly read my article on Coastal Contracts? "kau be kau bu" liao? Cry baby cry, just because you follow blindly and lost money?

How come such a coincidence you came out the same time as dontfollowblindly making complaints here? Your friend ah?

Go blame your friend (?) dontfollowblindly recommending you buy!

Posted by donfollowblindly > Aug 16, 2015 11:21 AM | Report Abuse
Recommend to buy at RM 3.27 saying intrinsic value RM 4.24. Now RM 1.84 losing RM 1.43.


donfolloblindly,
As usual, you follow me blindly on those few stocks (out of scores of stocks) I have written for sharing of knowledge which have gone down in prices, and come out to attack when the opportunity comes, like this bear market time.

Everyone of your attack is like the above, that I recommend to buy at such and such a price and the price now has dropped by such and such. Have you ever intelligently debated with me on the salient fundamental points I was sharing in any of the 150 articles I have written in i3investor?

Most of my sharing starts with this phrase:

“Disclaimer: Please be reminded that this article serves as sharing and learning purpose and it doesn't constitute a buy or a sell recommendation.”

Where the f I have said I “recommended” you stupid dontfollowblindly to buy which and which stock? did you pay me to do so or not?

Posted by hwaism > Aug 13, 2015 02:08 PM | Report Abuse
The best is if you can participate on my fee-based online course. You will learn many thnigs about finance and investing.
May I know more about the course? :)

You may contact me at ckc14invest@gmail.com

Posted by Yap Ngee Siong > Aug 12, 2015 07:31 PM | Report Abuse
Anybody can explain what is EV? Tqvm

http://klse.i3investor.com/blogs/kcchongnz/49016.jsp

Posted by digiuser016 > Aug 12, 2015 01:06 PM | Report Abuse

thank you for your kind explanation. Do you have any more investment books to introduce?


This is one of the best investment books. Not sure I have told you before.

The Most Important Thing Illuminated by Howard Marks

Another one which was sold in tens of thousand USD for charity initially.

Margin of safety by Seth Klarman

Wow, within one month Asdion has dropped by a whopping 50% from RM1.50 to just 74 sen today. Those who saw Asdion Wb as a big fat frog then would be shocked with its share price dropped by 44% during the same period.

As the frog was so fat and big, I am not surprised there are punters who have borrowed money to buy Asdion Wb and hoped for the big kill.

What if one has borrowed 50% of capital to punt big in this stock? Within one month, he loses all his capital.

Bursa is really one of the most treacherous place to be if you know nothing about the language of the business and the dangerous traps in the market place.

Posted by hwaism > Aug 11, 2015 03:17 PM | Report Abuse

Great article. I have tons of stuff need to learn. KC, can you tell me how to get the invested capital? I could not find that in annual report.



Annual reports won't tell you that. I can't find any screener giving this metric. You may find something here:

http://klse.i3investor.com/blogs/kcchongnz/50101.jsp

The best is if you can participate on my fee-based online course. You will learn many thnigs about finance and investing.

And return on invested capital should be higher than the cost of capital, or weighted average cost of capital (WACC).

WACC = E / V * Re + D / V * Rd * (1 - Tc)

E = Market value of Equity
D = Market or Book value of Debts
V = Total value of firm = E + D
Re = Required return of equity holders
Rd = Required return of debt holders
Tc = Tax rate, as cost of debt is tax deductible

If ROIC < WACC consistently over the years, I don't see the creation of shareholder value.

For a company like VS, I would required a Re of 15%. With that WACC is not far from 12%.

I would rather to be approximately right, rather than argue too much about it.

Posted by digiuser016 > Aug 10, 2015 11:44 PM | Report Abuse
Hi Kcchong
Why one of your criteria is ROIC>12%?
Why not 10% or 14%?
Thank you


Investing is an art. Hence there are no fixed criteria. Every individual is different. Different industry has different business model, assets employed and hence the difference. The difference can be big too; for example, asset light service providers have high ROIC, and asset heavy industry like VS has lower ROIC.

What I said about VS is


"The return on invested capital is also not bad at 12%, nothing great though."

Posted by shinebright > Aug 10, 2015 02:22 PM | Report Abuse

UR USING UOB TP AS THE BASE. NOW U R SAYING U VALUE UR OWN. THEN WHY U PUT 7.10 THERE AS CALCULATION? BTW, MOST TP DERIVED FROM ONE-YEAR FORWARD PE. NOT BASED ON TRAILING 4 QUARTERS. WHAT MORE, THEIR 4TH QUARTER IS NOT EVEN OUT.

As for the rest, seriously no time to argue with you la uncle. Go on and be a laughing stock. Thank you!


Me:UOB gave a target price of RM7.10. That means with the ttm 15 EPS, P/E is 14.9. P/E ratio can be historical, trailing, or forward. Different people use different ratio. Who are you to say I can't use ttm P/E?

I have an independent way of doing thing. Unlike you, only can follow analyst reports. You have no analytical ability of your own!

Who is the laughing stock? Please carry on your argument.

shinebright kcchonzzz,

Before you post such a long post on ur valuations. Please read properly lah
The PE ascribed is only 11x. 14.9x is the average valuation of its peer. Not VS la.

Me: Price = 7.10
EPS = 47.5,
PE =7.10/0.475 = 14.9
No?

That's why I ask you to READ PROPERLY. IT IS BASED ON 2016 P/E. NOT FY15 LA. FY15 ALREADY ENDED LAST WEEK.

Me: Did I say I used your UOB's forward 2016 P/E? And how do you know its 2016 earnings is correct as it is the future? I used the most recent one , that is 2015ttm. Did you read carefully my post????

"Based on the projected EPS of 47.5 sen for the financial year ending 31st July 2015, UOB KayHian accorded a P/E ratio of 14.9 for VS with a target price of RM7.10. Is this PE ratio a reasonable one?"


BY NOT VALUING USING CASH FLOW.

Me: Yeah kah? Where you learn that one cannot use cash flows in your case?


YES U DID. SEE BELOW THE LAST SENTENCE.

Yes, I know, I don’t know about the future of VS like many do. And yes, my limited knowledge of VS is from the financial statements, a history. The past has no relevance. VS is going to get many big contracts from Keurig, the evolutionary cold drink makers, and new customers etc. This time is different. You already can see from its share price performance.

Me: Where did I say the share price dropped? Where????>

Seriously save yourself from this embarrassment la

Me: Who should save himself from embarrassment? Please carry on the discussion and see who is embarrassing himself!

duitKWSPkita Dear Kc Chong,

Good day to you.
I am totally lost.... I googled HUMPTY DUMBTY SAT ON A WALL then only I know it is a song............. So naughty of you........ Actually I have no childhood so really never learn any kid songs.

Regarding to the VS, really no kidding. No harm to review it again(provided that if you think it can bring value to reader). ANyway, sorry for inconvenience caused. I love to read FA analysis in detailed analysis.

Wishing u a productive week ahead.


Duit,
As requested, I have written something about VS. I do wish to bring value to readers and shareholders of VS. Unfortunately every time I write about it, it brings anger among many readers. I can't understand why. Must I only write good thing and in line with their thinking, and not something which is different from they believe?

http://klse.i3investor.com/blogs/kcchongnz/80998.jsp

Posted by cjcj > Aug 10, 2015 11:21 AM | Report Abuse
And also it is based on historical data. Please refer to his past article. Thank you.

So what are you basing on? Please show us your data and analysis of the future!

cjcj kckc will only appear when vs share price is down... this is truth, that's all and thank you.

" For God sake, when have I ever “put down” its share price in any of the articles? And every time I write about it, its share price goes up and shareholders of VS are all laughing to the banks. Isn’t that wonderful? This time I just refer to an article done by UOB KayHian about V.S as shown in the appendix below. Again I like to talk about contrarian view, something to ponder about. Hopefully the share price of VS will gallop again."

Posted by shinebright > Aug 10, 2015 10:54 AM | Report Abuse

kcchonzzz,

Before you post such a long post on ur valuations. Please read properly lah
The PE ascribed is only 11x. 14.9x is the average valuation of its peer. Not VS la.

Me: Price = 7.10
EPS = 47.5,
PE =7.10/0.475 = 14.9
No?

The negative cash flow is due to the consolidation of its 43.9% owned VSIG. Its Msia operation is doing well. No one sees it like that please esp when it only owns VSIG at 43.9%.

Me:How does it change the cash flow of the group?

If you look at FBMKLCI as a whole, I believe you notice VS is not the only stock dropping so much. It drops in tandem with the index along with other stocks too.

Me:Did I say anything abut VS share price dropping in the article???


With your limited knowledge on VS as well as valuation, best save your time and efforts on smtg else.

Me:You don't like to read things that do not agree with you. But it seems others like to read woh.

Posted by tonytonychopper > Aug 10, 2015 08:55 AM | Report Abuse
Please continue to share your writings. Really appreciate them.
I can see that you treated those angry ppl as motivation to write more quality articles.
Are you writing a book? I hope can see your book at bookstore.

Posted by thebadguy > Aug 9, 2015 10:23 AM | Report Abuse
Hi KC, thanks for your sharing throughout the years. I have benefited greatly from your articles. People don't understand that everyone is human. If every single day someone can predict the price of a share to be 100% correct up or down, no need to be investor anymore, better be at Genting pick which number going to come out on the roulette. Get rich in 1 day.

Posted by Chua Lin > Aug 9, 2015 07:33 AM | Report Abuse
Thanks a lot kcchongnz

Posted by duitKWSPkita > Aug 7, 2015 04:34 PM | Report Abuse http://cdn1.i3investor.com/cm/icon/trans16.gif
“thanks for sharing KC CHONG...
appreciate ur kind time for analysis always.............
KC CHONG, I love FA so I never miss all your FA write up.
KC CHONG, may I request if possible to re-analyze VS's financial performance on next QR report. I like to learn should they have certain improvement in facts and figures after the expansion. No doubt CIMB presents an attractive TP of RM7.10 (almost similar with KYY's) but no harm to do an analysis before & after business growth.
Again, thanks Senior Kc Chong. “

Posted by ks55 > Aug 8, 2015 10:26 PM | Report Abuse
I am really puzzle why VS at 1.50 no analyst want to write about the potential.
When the price come to 6.00, all analysts will start to write fantastic report on it.
Are these analysts paid by someone to do the job?


Is this only happened to VS? I have never read an analyst report by professional analyst on any stock which was way undervalued. I only find reports on stocks which have become more well known by the investing community and hence the share prices have gone up close to or above their intrinsic values.

I have never read an analyst report saying this stock is way undervalued at an intrinsic value of RM6, but only selling at say RM2. I read a lot of analyst reports on share which have gone up to say RM6.30, and recommending a buy at a target price of say RM7.10, or just 15% upside. I have never seen the term, margin of safety in their reports.

And in the last 3-4 years, there are scores of these stocks which have gone up by 300% or 400%.

Alphabeta,

You may be right about the CCC the last three quarters. But in my opinion, that is not a problem because the poor CCC is because of the paid up of a large part of payables, not a build up of inventories, nor receivables. That also explains the poor negative FCF of the third quarter 2015 in Table 3 in my article.

I used the trailing twelve months cash flow and free cash flow, which is much better , but not that good either as shown on Table 2 in the Appendix of my article. It has never appeared to be good to me, except for just one year, in 2011.

Posted by Alphabeta > Aug 8, 2015 10:27 PM | Report Abuse
KC, another important metric to measure management effectiveness is Cash Conversion Cycle ("CCC"). In VS case, its CCC has deteriorated from 33 days in FYE 07/12 to 52 days in its latest Q3 ending 04/15 report.


The longer CCC in VS as see it is purely due to its longer days in inventories turnover to 49 days for the ttm 2015, resulting CCC lengthened to 43 days, not sure how you get 53 days.

To me this may not be the problem because of the spurts of sales the last 4 quarters. We should look at CCC in annual basis, as quarterly may be lumpy because of seasonality. CCC of 43 days is not so bad to me.

Posted by goreng_kaki > Aug 9, 2015 09:25 AM | Report Abuse

well said, but within 10 investors here, how many could really invest by analysis the fundamentals? the answer very clear.....

i bought VS ain't for goring or speculate or just blindly follow, it is because i am one of the insider, i also bought vs for long term unfortunately the price shoot up from 4 to 6 within 2 months, it really make me scared

I got discuss your article with the managements but you know what they are replied??
they said your analysis is great but it is just a historical data, we must always look forward and moving forward instead of too relying the pass result we had done before.


goreng kaki, thanks very much for your positive response. I am delighted about the response from the management too, very positive, rather than calling me a "stupid critic". From their response, they seem to be credible bunch of people. But you should know better than me.

So sincerely I hope you understand what I am trying to convey in my article. I have nothing against VS.

Oh yeah, one last comment. In investing, my opinion is the best person you should trust is yourself.

Hi KC,
On your advice , I also bought Homerizt . There is an announcement that they will issue free bonus & warrant but did not state when. So it's indefinite. If the price go up 50% (RM1.22 then), should I sell or wait for the free bonus & warrant?
Lily


K C Chong <ckc14training2@gmail.com>
May 6
Lily,
Good on you for invested in Homeritz. The corporate exercise for Homeritz is quite straightforward and should complete in about three months, I think. I think it is good to go through the whole exercise.
If it goes up 50%, I think its price would have exceeded its value.



The share price of Homeritz ran up to RM1.53 just before the ex-date of the corporate exercise. As at 7th August 2015, Homeritz and its warrant closed at 99 sen and 47.5 sen respectively. Those who still hold the shares would still gain about 5% since just before the ex-date, or 31% when it was RM1.22.

For those who have sold near their peaks at RM1.17 and 65 sen respectively would have gained another 25% from just before the ex-date, of 56% from RM1.22.

Posted by goreng_kaki > Aug 9, 2015 12:15 AM | Report Abuse
Loser always talk negative to find their psychological comfort ( i say somebody ok), let the time and the market prove whether vs would worth rm 7 or not...
also, if you are so care about the CASH, go buy the china stock, all we know china stock hold billion billion of cash but no dividend willing to given out...this is so called good stock huh??? this is what you want huh???


goreng kaki, my articles rarely talk about goreng. This one is no exception. They discuss about businesses and their performance. They talk about value first, and then compare with price, and only invest with a wide margin of safety. That is how value investors invest. I know, it is hard for those people who like to goring shares to understand what value is, what margin of safety is.

Value investors, unlike goring kakis, don’t look for insiders, syndicates, manipulators to goring the shares to make money for them. That belongs to the school of “The Greater Fool Theory”.

I have never disputed your claim that VS share can go up to RM7, RM20, of RM20, maybe even after the split. Value investors can’t predict share price movement, none of them can, unlike those goring kakis. Goreng kakis are better than them in predictions.

Value investors generally have great appetite to read and try to understand the language of business, unlike goring kakis. For example, they will read up what is meant by cash flow, free cash flow etc. They won’t just assume the cash flow from operations, free cash flows are CASH in the balance sheet, unlike goring kakis. Goreng kakis don’t care a damn about what the financial statement is; what is balance sheet, what is cash flow statement. Goreng kakis only talk about the share price; how much it can go up to etc., but could never tell you how to justify those prices, except basing on the greater fool theory.

Values investors are not losers. In fact, most of them are great long-term compounders.

Posted by paperplane2 > Aug 8, 2015 05:10 PM | Report Abuse

Kcchong, how abt altman z score to invest? Any idea or guide can provide.



http://klse.i3investor.com/servlets/forum/900243804.jsp

Posted by johnny cash > Aug 8, 2015 02:57 PM | Report Abuse
Why suddenly today you are talking about ASDION, KCCHONG? Why not few weeks ago?

Posted by Frankiechow > Aug 8, 2015 03:05 PM | Report Abuse
It looks like KCChongnz is taking a cheap shot on Asdion or Paperplane. Why didn't he say anything few weeks back before Asdion took a dip along with the rest of counters in klse? Is he trying to divert from VS which he was completely wrong?


I started my article with my response to paperplane when he asked me something about arbitrage. And that was three weeks ago. And I said my conversation with "my e-friend". What is wrong to discuss any stock in i3investor, whether now or a few weeks ago?

The Chow fellow, what do you mean by a "cheap shot"?
The Chow fellow, can't you read and understand simple English?
The Chow fellow, where was I "completely wrong on V.S?"
The Chow fellow, we can talk about, and discuss intelligently about V.S any time as you wish. Do I need to divert anything from V.S?

Asiabio warrant A
The profile of the warrants is as below:

Maturity Date: Mar 19, 2024
Exercise Price: MYR 0.10

The warrants still has a very long expiry date of more than eight and a half years, and hence a good time value on top of its intrinsic value. On 30th January 2015, Asiabio closed at 26 sen and the warrant at 7 sen. This means the warrant has an intrinsic value of 16 sen. It was hence traded at a huge discount of 9 sen,or a whopping 50% discount, not including the huge time value it is supposed to have!!!!

Punters who thought they had found a free lunch scrambled to mope up the warrants at 7 sen and sent for conversion at 10 sen and hoped to make the 35% arbitraged profit. Alas, two weeks later before the converted scripts came back, the underlying share closed at 12 sen. They have to hug on the converted share with a 5 sen loss. Those who did not convert also faced heavy losses with the warrant price traded at just 5 sen, down 30% from the price they bought two weeks ago.

Posted by duitKWSPkita > Aug 7, 2015 04:34 PM | Report Abuse

I have feeling another 25 years my English also cant as good as urs. KC CHONG, I love FA so I never miss all your FA write up.

DUIT, ARE YOU KIDDING? I ONLY STARTED TO LEARN "HUMPTY DUMBTY SAT ON A WALL" WHEN I WAS 13 YEARS OLD!

KC CHONG, may I request if possible to re-analyze VS's financial performance on next QR report. I like to learn should they have certain improvement in facts and figures after the expansion. No doubt CIMB presents an attractive TP of RM7.10(almost similar with KYY's) but no harm to do an analysis before & after business growth.

DUIT, ARE YOU KIDDING AGAIN? THE PERSON WHO KNOWS V.S IS THE ONE MENTIONED IN YOUR POST HERE. NOT ME. I AM JUST UNINFORMED CRITIC.

ks55,

I have shown that in a rising market, individual property stocks have done much better then REITs. In a down market, I fully agree with you that Reits will fall less than individual property stocks.

This is understandable as Reits hold a portfolio of properties, and hence are less volatile than an individual stock.

Posted by paperplane2 > Aug 7, 2015 01:48 PM | Report Abuse
As long as I make money, who cares???? KC chong, it is risky, but I can manage! as it is small compared to my total portfolio. So it is calculated risk


Don't get me wrong that I am saying that you should never do risk arbitrage. It is a very powerful concept in investing as I have said.

I myself constantly looking for arbitrage opportunity, I mean risk arbitrage. There ain't any risk-free arbitrage around. I wrote about a few of risk arbitrages in i3investor before. The first one was KHSB which was a very successful arbitrage taken by me as there was no manipulation by anyone in this stock.

http://klse.i3investor.com/servlets/forum/800001149.jsp?ftp=39

The next one was Asupreme LA.

http://klse.i3investor.com/servlets/forum/800001290.jsp?fp=4&ftp=2

This there was manipulation by insiders and syndicates, I think. But I was successful with it and I didn't have to convert to the underlying share.

There is another one which is more of sharing of idea for Kuchai:

http://klse.i3investor.com/blogs/stock_pick_2014_kcchongnz/43763.jsp

This there is the limitation that nobody can do anything about the price-value diversion, at least for now.

So there is high probability that one can make money from risk arbitrage if he understand the diversion of price Vs value. But beware that most of the time, there won't be big fat frog jumping around. So never put all your eggs there.

Asdion is a clear and present example. The share price of the underlying share has dropped from RM1.50 to less than RM1 now, for a loss of 35% in just three weeks. For those thinking of arbitraging the warrant got hurt, badly. This is a clear manipulation of somebody.

Posted by Steven Chow > Aug 2, 2015 03:06 PM | Report Abuse
Article taken down. Good. Just like KYY article on MRCB. KYY got sued for making false allegation.


Admin should straightaway ban this Steven CCB in i3. Otherwise it will create a lot of ill feelings among forumers in i3.

CFTrader, I mentioned a couple of times that the portfolio is history and that it has been totally changed, and that the new portfolio has made fantastic return. It was posted for the purpose of discussing about diversification.

But reading your comment I realize that the article could be easily misunderstood.

Reading the second comment by this Steven Chow, an instigator, is even worse. You can clearly see his hidden agenda. Many people like this Chow fellow may make use of the article to start condemning. I am not afraid of me being condemned, but the other person which I have respect of.

Hence I took this article down.

Posted by Steven Chow > Aug 1, 2015 07:24 PM | Report Abuse
I follow hot tips. Took margin. Now laughing all the way to bank.


Well done Steven Chow. Carry on baby!