Datasonic, A Rule breaker for risk takers.

Below is the financials for Datasonic for the last few years.

Year 2010 2011 2012 1st half 2013
Revenue, m 39.6 78.4 178.7 118.3
Net profit, m 7.6 15.9 28.1 35.6
EPS 8.4 17.6 36.85 39.6

What do you see?

Assuming an annualized EPS of 80 sen,at 3.36 now, isn't it cheap? Yeah I know. Its price has shot up by 65% from RM2.00 since 4 months ago.

Datasonic has 10m copies Mycard to issue for 2013. It is also awarded 5 year contract to supply 10m polycarbonate passport. Think about that. there is very strong earnings visibility. Most of all, it is not expensive.

I would take this as my only stock for the challenge going on now.

Prestariang has just reported its 2nd quarter 2013 results. Both its revenue and net profit increased by 16% compared to the corresponding quarter the previous year.

Prestariang paid out a total 10 sen dividend last year. At a price of RM1.92 now, the dividend yield amount to 5.2%. This yield is much higher than the fixed deposit rate of about 3.5%. So it appears that Prestariang fit in our high dividend yield strategy, doesn’t it?

Prestariang’s dividend payout has increased from 8 sen two years ago to 10 sen. This is equivalent to a very good compounded annual growth rate of 12%. It earned 17 sen a share last year. The payout ratio is less than 60%. Hence it has retained a healthy amount of earnings for capital expenses intended for growth in the future.

Prestariang’s business is stable with recurring and growing income from its ICT Training & Certification and software licence distribution, mainly from the government departments. Its education arm UniMy, presently running at a small loss, would soon begin to contribute to its bottom line. It has ample free cash flow due to its asset light business model. Last year, FCF was 38.4m, or 17.4 sen per share. It has a very healthy balance sheet with an excess cash of 63m, or 28 sen per share.

With all these, there is no reason why Prestariang would not be able to continue to pay out high dividend in the future.
Prestariang certainly qualifies as a stock for the high dividend yield investing strategy.

A game like that with so many participants has to keep it simple. Otherwise there will be a lot of of arguments, not only now, also later.

Posted by Tan KW > Aug 31, 2013 05:32 PM | Report Abuse
@kcchongnz, thanks for the follow up. I have updated the blog content http://klse.i3investor.com/blogs/stock_pick_challenge_2013_2h/34109.jsp

by the way, i would like to invite you to join the game http://klse.i3investor.com/blogs/stock_pick_challenge_2013_2h/36046.jsp as I would like to learn from you...

Tan KW, a great game to play. To find the winner in four months time? Those technicians and people who have good insider information would have an advantage. The winner can be anybody. In a bull market, my guess is the winner will be one who picks high leverage instrument such as warrants, the higher the leverage the better, and high beta stocks, or one who have more reliable rumours.

You guys enjoy the fun. I will be a spectator. I will look at those stocks recommended, analyze some of them and then may be I will pick them as some in my new portfolio. If you really want to learn from me, you may do so better there.

Pintaras Jaya announced its final 2013 financial results ending 30/6/13 on 28th August 2013. Revenue decreased marginally by 7% to 173m. Its net profit, however, increased by 24% to 52.3m, the highest in history so far. Earnings per share amounts to 65 sen. The net profit margin expanded to 30% from 23% the previous year, also the highest so far. Return on equity and Invested capital is 20% and 30% respectively.

Can anyone find another construction company having this kind of fantastic performance? It is extremely difficult for you to find one from the construction stocks in Bursa.

More importantly the quality of Pintaras earnings is great. Cash flow from operations amount to 49m. After spending 8.5m in property, plant and equipment, it has 40.5m free cash flow (FCF). This FCF is 23.5% and 29.5% of revenue and invested capital respectively. Can you find another construction company having this kind of fantastic FCF?

From the available FCF, 16m was distributed as dividends, or 20 sen per share. The rest is left in the balance sheet as cash and cash equivalent. With this abundant FCF, Pintaras has proposed a total dividend of 25 sen for financial year 2013, a 25% increase in dividend payout.

Yet at the price now of RM5.43 now, the price-earnings ratio is at just 8.3. The company holds RM155 m excess cash or cash equivalent, or equivalent to RM1.94 per share. Earnings yield (Ebit/EV) is 19%, much higher than 10% for the benchmark of a bargain price.

Don’t you think Pintaras is such a great company but trading at such a bargain price?

Posted by ipomember > Aug 31, 2013 02:51 PM | Report Abuse
Well, actually my purpose of posting is not to argue how good Padini is, i just want to give an example that its better to focus on both business and financial accounting in doing our investment analyst. However i think i might be able to answer you.

MY QUESTIONS WERE GENERAL IN NATURE, NOT INTENDING TO TALK ABOUT PADINI, BUT JUST USED IT AS AN EXAMPLE.

ANYWAY, I FIND YOUR REASONING ON PADINI VERY GOOD. SO YOU DO LOOK AT THE FINANCIALS, DON'T YOU? IN FACT YOU LOOKED DEEPER THAN ME IN A COMPANY'S FINANCIALS. YOU EVEN TALKED ABOUT ITS INVENTORIES AND RECEIVABLES. YOU LOOKED INTO ITS NON FINANCIAL ASPECTS, VERY GOOD. JUST THAT NOT EVERYBODY HAS THE LUXURY TO DO THAT.

YEAH, YOU ALSO CONSIDER WHETHER IT IS A GOOD BUY. WELL DONE. SO I HAVE NO QUESTION THAT YOU HAVE A PROPER PROCESS OF INVESTING.

Posted by ipomember > Aug 29, 2013 10:00 PM | Report Abuse
what a great analysis, but again, my concern is one should look more at the business itself rather than focus too much in valuation or financial accounting coz the market might not just simply agree to your valuation. just my worthless 2 cents

Posted by ipomember > Aug 30, 2013 08:12 PM | Report Abuse
Another thing is, i have noticed that the stand-alone-store for VINCCI is doing extremely good. If not mistaken, VINCCI contributes the highest revenue for PADINI group. How do i know it? I walk by VINCCI store every weekdays as long as i go to work, i can see that the store is crowded, be it at Ferenheit or KLCC. Thats another way to look at its business.(Of course in Daiman case i dont know how, thats why i dont hold any property stock).

GOOD POINT. ANOTHER CLASSIC PETER LYNCH STRATEGY OF INVESTING. I AGREE FULLY THIS NON FINANCIAL INFORMATION IS VERY IMPORTANT WHEN DECIDING IF TO INVEST IN THAT COMPANY OR NOT. NO ARGUMENT.

SO SUPPOSING THAT VINCCI STORE IS SO CROWDED AND SO MUST BE MAKING A LOT OF MONEY FOR PADINI. NO NEED TO LOOK AT THE MARKET VALUATION ALSO, JUST BUY?

BUT LET ME ASK YOU A FEW QUESTIONS.
1) ARE OTHER VINCCI STORES IN OTHER PLACES ALSO VERY CROWDED AND WITH EXPLOSIVE SALES?
2) DO THE SALES TRANSLATE INTO GOOD BOTTOM LINE? WHAT KIND OF MARGINS? GOOD RETURN ON CAPITALS?
3) CAN GOOD SALES LEADS TO LOSSES INSTEAD? WHY NOT?
3) WHAT ABOUT OTHER STORES OR PRODUCTS OF PADINI? NOT AS WELL? SO HOW DO THEY AFFECT PADINI'S BOTTOM LINE?
4) ASSUMING EVERYTHING IS GOOD. GOOD SALES, GOOD PROFITS ETC. WOULD YOU BUY ITS STOCK IF IT IS SELLING AT RM10 A PIECE? NO? THEN WHAT PRICE WOULD YOU WILLING TO PAY? HOW DO YOU COME TO YOUR CONCLUSIONS?

sephiroth, that was last year. This quarter there is a profit, not due to reversal of LAD. However, the profit was from its associates and jv business, not from MTDACPI's ordinary business in construction and manufacturing. There is actually an operating loss of about 7m in its core business. Share from JV and associates is about 4.3m.

The Achilles's Heel of MTDACPI is still in its continues poor cash flow, another negative 24.3m this quarter. Without positive cash flow, where got money to invest in capex, pay dividend, or invest in other ventures unless issue more shares or borrow more from banks?

Kumpulan Fima first quarter 2014 results

Revenue and profit before tax dropped by 3.2% and 18.7% to 112.8m and 30.1m respectively. The drop was mainly due to the poorer performance of the manufacturing and especially the food division. The palm oil division surprisingly did well with an increase in revenue and PBT. Bulking division also did slightly better.

My concern about its cash flow proved to be unnecessary as this quarter saw its receivables reduced by 33m. This improves its CFFO to 52.6m, 175% of its net profit. Free ash flow for this quarter is very good at 40m after continue spending 12.4m in PPE and biological assets.

The good cash flow is reflected in its balance sheet with cash increased by 18% to 321m from 272m last year.

I hope I don't give the impression to others that I do not like opposite views. As I have said many times, it is not good for my investing experience.

Just that I often find general statements are made. I really appreciate if others can be specific, best come with some numbers to justify. Notice I use numbers a lot because if not, I don't know how to justify my views. It is difficult to discuss on general statements.

Well any comment is appreciated.

ipomember
"When it comes to the business, i would like to pick those business that is simple for me to understand and figure out what is the future planning of the company, competitors, is it operatiing in a niche market,if the product is same how does a company outshined the others? so and so..."

MY POST WAS ABOUT GRAHAM NET NET VALUATION ON DAIMAN. SO I PRESUME YOU ARE NOT TALKING ABOUT THAT ISSUE. IF YOU ARE TALKING ABOUT THE COMPANY'S BUSINESS AND IF IT IS WORTHY OF INVESTING, YOU ARE RIGHT. GO TALK TO THE MANAGEMENT AND ITS STAFF, SUPPLIERS, CONTRACTORS AND SUBCONTRACTORS ETC ABOUT THEIR NICHE, COMPETITIVE ADVANTAGE AND FUTURE PLANNING. DO RESEARCH ON THE INDUSTRY, THEIR COMPETITORS, AND HOW THEY CAN DO BETTER THAN THE COMPETITORS ETC. CLASSIC PHILIP FISHER SCUTTLE BUTTING. VERY GOOD.

"My method in stock picking is more on bottom up approach, No matter how good the business i think i will always look at their past performance first. The little changes from now and before is i dont focus too much on it, i have been more compromised instead and i look more on the business nature and its prospect as i think we are buying for the future of the company. I ll be very happy if i can come out with a story which shows that i know the company very well."

GOOD BOTTOM UP APPROACH. I FOLLOW THAT TOO. BUT DON'T YOU THINK THAT YOU MAY END UP WITH THE SAME PREDICAMENT AS YOU SAID BELOW:

"When i first learnt to analyse a company, i look more on financial accounting, formulate my own spreadsheet and putting all the figure inside and analyse. However, when our market reached a new high this year, my stock is not performing! How come this will happen? Even a stock w/o net profit can perform better!I started to realise that i am living into a fantasy of how good the stock is without knowing too much about the company and its business."

SO HOW? YEAH FOLLOW YOUR SCUTTLE BUTTING APPROACH BELOW THEN?

"instead and i look more on the business nature and its prospect as i think we are buying for the future of the company. I ll be very happy if i can come out with a story which shows that i know the company very well."

YEAH WE BUY THE FUTURE, NOT THE PAST. LOOK MORE ON THE BUSINESS NATURE AND ITS PROSPECT. A LITTLE VAGUE ISN'T IT? HOW TO LOOK? FORECASTING? PREDICTING? AND HOW TO TRANSLATE THESE PREDICTIONS INTO $$$$? A STORY? A STORY FOR TRADING? THEN IT IS A DIFFERENT STORY ALREADY, ISN'T IT?


"However, little do they know that there are some companies holding the huge landbank without doing anything for more than a decade(at least i read it from theedge weekly)! If a company is holding at lot of huge landbank but do not develop it, it creates no value for the shareholders i think. OF course theoritically you are holding something valuable, but i don't think the value will be realised(unless there is any catalyst). Thats why knowing the company future planning is important. "

YEAH AGREE. HUGE LAND BANK BUT NO DEVELOPING PLAN NO USE. BUT IS DAIMAN JUST SITS ON THESE ASSETS? IT APPEARS TO ME DAIMAN IS USING ITS CASH TO BUY INVESTMENT PROPERTIES AND SECURITIES. THESE INVESTMENT PROPERTIES AND SECURITIES ARE YIELDING RETURNS. IT IS DEVELOPING ITS LAND BANK, ALBEIT NOT AT TOO FAST APACE. THIS CAN BE SEEN FROM ITS GROWTH IN REVENUE AND OPERATING PROFIT AT A CAGR OF 12% AND 38% RESPECTIVELY. NO???

DAIMAN ALSO JUST DECLARED A DIVIDEND OF 12 SEN, OR A DIVIDEND YIELD OF 4.6%, HIGHER THAN FD RATE.

CATALYST? ISN'T CHEAPNESS THE BEST CATALYST?

OK OK MUST KNOW FUTURE PLANNING. SO GO SCUTTLE BUTTING.

Posted by houseofordos > Aug 30, 2013 07:35 AM | Report Abuse
kc, interesting method of valuation, whats your thought on dormant companies KLUANG or SBAGAN ?

house, I know nothing about these companies. But if I get interested in them (will I?), these are the questions I would want to ask:

1) Is the company to be liquidated and assets returned to shareholders? If so is it much more than the price? One way to do is to use the net net valuation.
2) Any potential somebody take over and build a viable business?
3) Is it giving good dividends?
4) Is there available cash to do (3) above for many more years?
5) Is it burning cash?
6) etc etc

I cannot remember how many times I have said that I prefer to hear opposite views rather than agreeing with me. It is an excellent way to curb my over-confidence in my stock selection. As one knows well, over-confidence will not be good for somebody's investing experience. So let us continue with this discussion.

Posted by ipomember > Aug 29, 2013 10:00 PM | Report Abuse
what a great analysis, but again, my concern is one should look more at the business itself rather than focus too much in valuation or financial accounting coz the market might not just simply agree to your valuation. just my worthless 2 cents

I TALKED ABOUT GRAHAM NET NET VALUATION FOR DAIMAN. IT IS ONE OF THE STRATEGIES OF INVESTING. I DID TOUCH ON DAIMAN'S BUSINESS AND ITS PERFORMANCE. THAT IS ONE OF MY WAYS OF LOOKING AT IF A COMPANY IS WORTH INVESTING IN. AS YOU KNOW I HAVE MANY WAYS FOR DETERMINING IF A STOCK IS WORTH INVESTING OR NOT.

YOUR COMMENT IS GOOD BUT I WOULD LIKE TO HEAR YOUR VIEW AND PROCESS OF "look more at the business itself rather than focus too much in valuation or financial accounting" IN SELECTING A STOCK TO INVEST.

SURE, MARKET SELDOM AGREE WITH ANYBODY'S VALUATION, NOT ONLY THE VIEW OF A NON-PROFESSIONAL LIKE ME, EVEN ANALYSTS AND INVESTMENT BANKERS. GO CHECK THE FAIR VALUES OF STOCKS GIVEN BY THEM AND SEE IF THE MARKET AGREE WITH THEM, THE PROFESSIONALS OR NOT. THE QUESTION IS WHAT IS YOUR PROCESS AND HOW DO YOU SELECT A STOCK TO INVEST IN? PLEASE SHARE.

Posted by ipomember > Aug 29, 2013 10:41 PM | Report Abuse
when the market crash, what makes you so confident to hold on the shares is your understanding of the business, the business prospect in which you confident that earning will be increasing, rather than past performance or valuation. Again, jz my worthless 2 cents

IF YOU READ THROUGH MY WRITEUP YOU WOULD GET THE MESSAGE THAT I WOULD BE CONFIDENT TO HOLD THE SHARE BASED ON THE QUALITY OF ITS ASSETS; ITS HUGE HOLDING IN CASH, INVESTMENT PROPERTIES AND LAND HELD FOR PROPERTY DEVELOPMENT EVEN AT ITS BOOK VALUE. TO ME THESE PROPERTIES AND LAND COULD BE WELL ABOVE THE MARKET VALUE AND THEY GENERALLY DO NOT DEPRECIATE. EVEN AFTER IGNORING THE VALUE OF ITS OTHER ASSETS, ITS NTA IS STILL 40%+ ABOVE ITS MARKET PRICE NOW.

I PICK IT NOT BECAUSE "confident that earning will be increasing, rather than past performance or valuation" AS STATED BY YOU IF YOU RAD THROUGH MY WRITEUP. HOWEVER I DID TALK BRIEFLY ABOUT ITS BUSINESS PERFORMANCE AND CASH FLOWS. DO YOU SEE ANY PROBLEMS WITH DAIMAN'S BUSINESS.

ONCE AGAIN APPRECIATE YOUR SHARING, AND IN FACT ANYBODY'S SHARING. TELL YOU WHAT, THERE ARE PLENTY OF THINGS I DON'T KNOW ABOUT DAIMAN AND THE PROPERTY MARKET. i LIKE TO LEARN TOO. BUT JUST WISH THAT YOU COME OUT WITH YOUR SPECIFIC CONCERNS, NOT JUST A STATEMENT. THAT IS THE RIGHT WAY OF DISCUSSION, ISN'T IT?

Posted by tonylim > Aug 28, 2013 09:22 PM | Report Abuse
kcchong for argument sake, is there any requirement for them disclose what kind of investments they are in as in in their quarterly reports.

Those things under "investments" are disclosed as equity holdings managed by a fund manager, which is disclosed in the audited annual account, I think. This is understood by investors. Whether the disclosure in quarterly report is required or not, I am not sure, but I don't think so.

You mean they have to disclose what stocks are held under the fund management? I don't think so too.

Posted by iafx > Jan 2, 2013 09:50 AM | Report Abuse
ptaras is poor in liquitity, regardless of trading or investing, it's a classic family controlled business, little to no transparency, this is one point to remember when buy into this counter
ptaras placed large amount of $$$ into fund/asset management. cash is preserved for their own good.
there is question if ptaras can maintain a 20c div, while 10c should be norm.

HURRAY PINTARAS PROPOSED TO DECLARE 25 SEN DIVIDEND FOR 2013 ALREADY LOR, NOT 10 SEN!

Posted by iafx > Jan 2, 2013 11:29 AM | Report Abuse
mountain of facts or BS? all yr data first copied from other reports not made by u, then uses theory/formula which can be found on www, books, lastly add a bit of your emotion. Yeah, that's a lot of fact - to hard sell the counter?

HEY FOUND ANY EVIDENCE I COPY ANYTHING FROM ANYWHERE OR NOT? IT IS ALREADY 8 MONTHS ALREADY OH. STILL COULDN’T FIND ANYTHING. WHAT HAVE YOU BEEN DOING MAN?

let's see when ptaras would announce bonus issue, or maybe just private placement. by then, whether what you said here is a fact, or merely just market talk.
IS IT A FACT OF MARKET TALK? IS IT A PRIVATE PLACEMENT? BTW A PRIVATE PLACEMENT FOR WHAT? GET MONEY FROM SOMEONE WHEN IT HAS SO MUCH CASH?

Posted by iafx > Feb 17, 2013 12:16 PM | Report Abuse
there is no securities house covering this counter - why? no need to reply here, go & do yr homework.

OH BUY ANY SHARE MUST HAVE COVERAGE FROM SECURITY HOUSE?

what a joke, tons of books/www/classes/software nowadays on how to read statement, find figure etc etc; what's so aiyaya about being able to read paper? especially copy & bs around it... sigh.

FOUND ANYTHING I COPIED FROM ANYWHERE OR NOT? WHAT BS AROUND? CAN ELABORATE AH?

simple, should paper fact is so accurate, why ppl still cannot make enough based on it, why market does not respond accordingly since it is sooooo good as tau-fu claimed it is? in fact, many make loses following these papers, not to mention those who followed bs story.

YOU MADE LOSSES FROM MY BS STORY AH? I THOUGHT YOU FOLLOWED ME AND MADE MONEY TOO. INSTEAD OF THANKING ME, STILL WANT TO ATTACK ME AH?

ptaras solely a family business, no liquidity, core value is never about retail investors, they would rather place $ into private fun(d). mega infra prjs r not forever, after ge13 many will realize "lots of prjs in hand" on the "paper", but only few r running & probably not running at the size stated, not to mention not all running prjs make good $ - what u read is only lum-sum, data in the passed.

PINTARAS PROPOSED 25 SEN DIVIDEND WOH. SOME MORE 1:1 BONUS WHO. NEVER ABOUT RETAIL INVESTOR? LUM(P) SUM, WHAT LUMP SUM?

ptaras a pick only bcos it is small & relately safe given its cash (also means $ not utilize); maybe could exercise bonus (hopefully not yet another private placement). given its outlook, it is actually too expensive already. given that price, there r a number of other counters worth better than this one. those who grabbed it during the 1.4-1.5 days a bless of god (no need say anything :). those who buy above 2.7 should continue to assess the viability of holding this counter. GCruey could have done a right thing by disposing it now & wait for next opportunity.

MONEY NOT UTILIZED? THEY CONTINUE TO GIVE GOOD DIVIDEND AND INCREASING IT EVERY YEAR WHO! ALSO SPENT MONEY BUYING MORE PLANT AND EQUIPMENT AND MADE MORE PROFIT EACH YEAR WHO. TOO EXPENSIVE AT RM2.70. WHAT WAS YOUR BASIS? WHAT IS ITS PRICE NOW? LUCKILY OTHERS DIDN’T FOLLOW THE ADVICE OF THIS “TAUFU” AND SELL PINTARAS AT rm2.70 OH.

god bless u ptaras to issue 1:1 bonus share, good luck all :)

REALLY GOD BLESSED THOSE PEOPLE WHO ARE HONEST, NOT CHEATING TYPE LIKE
THE ONE WHO CHEATED BYAMENDING HIS “REVENUE” TO “PROFIT” IN THE KFIMA THREAD, AND THEN ACCUSE OTHER OF CHEATING. HOWEVER WHEN CONFRONTED TO SWEAR BUT DARE NOT AND RUN AWAY. OF COURSE HE DARE NOT SWEAR LAH. IT IS A BIG THING TO SWEAR YOU KNOW.

Posted by iafx > Feb 23, 2013 01:07 PM | Report Abuse
for readers who do not waste time reading long bs:
18/2/2013 ptaras announced recorded lower revenue and profit before taxation of RM36.0 million and RM10.6 million, representing a decrease of 18% and 44%

overall remains intact, however current pricing is way too expensive.
CURRENAT PRICE AT RM2.70 WAY TOO EXPENSIVE? WHAT IS YOUR BASIS? BASED ON P/E, ENTERPRISE VALUE, P/S, P/B, DIVIDEND YIELD OR WHAT? WHAT BASIS????

littleshark,

Thanks for the explanation. I got it now.

It is a unique situation when a subsidiary is acquired just before the close of the quarterly result. Balance sheet is consolidated but not the income statement. The change in the working capital is also not reflected in the cash flow from operations activities as usually done but in the cash flow from investment activities.

Posted by fadhil53 > Aug 28, 2013 11:23 PM | Report Abuse
kcchongnz can u help me on this predicament . tq

Not a good move to buy at 83 sen as the GO price is 83.6 sen. Eventually you will be given a check with 83.6 sen settlement price. You wont make any gain after taking into consideration of your opportunity cost or loss in interest from your money.

That is a problem of buying something without knowing what is happening. But never mind, take it as an inexpensive lesson learned.

Patimas net asset value is a negative 6 sen per share. It has little revenue. Bottom line has been losing money.

What is left for Patimas is an option value. The time value depends on when the creditors start their liquidation process of Patimas from the Court.

ken369, thanks for your response but I don't get it.

I know what inventories are but I am saying the increase in inventories for last year from the balance sheet is 83.3m. That means 83.3m is tied up in this increase in inventories for last year. But how come the cash flow statement only shows 10m in increase in inventories?

Similarly the trade receivables have increased by 69m as shown in the balance sheet. But how come in the cash flow statement, only 8m is involved?

In the old days when company don't provide the cash flow statement, investors have to work out the cash flow statement themselves by adding/subtracting like this from the balance sheet.

inwest88, I am just being ke po here.

But seriously, KNM presents a text book case study. If I were to give a MBA course in finance and investment, I would take KNM as a case study. Students will learn a lot about how to look for problems in financial statements analysis, management and investor behavior and all kinds of valuable lessons in finance and investment.

Wah, so happy with 33.74 m in CFFO man. But CFFO is for the firm, ie for both equity share holders as well as debt holders. So still need to pay the 20m interest from there you know. so left with a miserable 14m cash. Also need to pay down at least a minimum amount of the 900+m total debt you know.

So this quarter no money to invest in plant and equipment already lor. Some more no money to buy this buy that like they liked to do all over the world all this world. So cash flow so great meh?

Melvin, just to shiok a bit here lah. Remember that time we were the only few who stick to OTB while so many people taruk him on this KHSB?

Luckily I didn't sell at RM2.70 as advised by the expert below:

Posted by iafx
[ptaras a pick only bcos it is small & relately safe given its cash (also means $ not utilize); maybe could exercise bonus (hopefully not yet another private placement). given its outlook, it is actually too expensive already. given that price, there r a number of other counters worth better than this one. those who grabbed it during the 1.4-1.5 days a bless of god (no need say anything :). those who buy above 2.7 should continue to assess the viability of holding this counter. GCruey could have done a right thing by disposing it now & wait for next opportunity.

Where are all the doomsayers in this thread?

Those who took this risky arbitrage earns 25%, or annualized return of 75%!


Posted by kcchongnz > Apr 30, 2013 09:48 AM | Report Abuse X

Market inefficiency?

News broke out about the signing of the S&P for the takeover offer last night. Maximum takeover price 83.6 sen and minimum 76 sen. Completion of S&P by end of May. GO say take another 3 months to complete.

If everything concluded in the one plus three months and all investors get their money in four months, the profit of buying KHSB now at 67 sen would be between 13.4% and 24.8%, or an annualized return between 40% to 75%.

Why is there such a high risk premium for this risky arbitrage play?

Pintaras Jaya announced its final 2013 financial results ending 30/6/13 on 28th August 2013. Its net profit margin increased by 24% to 52.3m, or 65 sen per share. The net profit margin expanded to 30.3%, ROIC is 29.5%. Free cash flow is 23.5% and 29.5% of revenue and invested capital respectively.

Can anyone find one construction company having this kind of performance?

Yet at the price now of RM5.33 now, the price-earnings ratio is at just 8.2. The company holds RM155 m excess cash or cash equivalent, or equivalent to RM1.94 per share. Earnings yield (Ebit/EV) is 19.2%.

Don’t you think Pintaras is such a great company but it is trading at such a bargain price?

Yeah man, why attack others? But but who attack who ah actually?

We must follow the wise teaching of this guy below.


Posted by DaveSingh > Dec 19, 2012 02:00 PM | Report Abuse
Love your enemies, do good to those who hate you, bless those who curse you, pray for those who abuse you. To one who strikes you on the cheek, offer the other also....

Posted by newbiestock > Aug 28, 2013 10:36 AM | Report Abuse
OTB just hope u dont do mad like kcloh and bankrupt like kcchongnz.. wish u good luck..

Hey newbiestock, thanks for your concern. On the contrary, I did very well lei despite this few days drop. At the prices of the stocks now, my 1-5 years return as follow:

28/08/2013
Year 1 2 3 4 5
Average Portfolio CAR 28.8% 14.1% 20.4% 25.6% 22.8%
KLSE CAR 10.8% 8.0% 9.9% 11.4% 9.3%
Excess return 18.0% 6.0% 10.5% 14.2% 13.5%

For example, my 3 year compounded annual return is 20.4% compared to 9.9% of KLSE. My 5-year CAR is 22.8% compared to 9.3% of KLSE. Good or not? Don't believe, go and compute yourself from the link below:

http://klse.i3investor.com/servlets/pfs/13147.jsp

How to go bankrupt? Want to bankrupt also susah woh! How about your return from the market ah?

Posted by newbiestock > Aug 28, 2013 10:36 AM | Report Abuse
OTB just hope u dont do mad like kcloh and bankrupt like kcchongnz.. wish u good luck..

Hey newbiestock, why you keep on criticizing me? Have I done anything bad to you? I haven't say anything at all about you recently, have I? Why do you do that to me?

I think you should learn some politeness from this guy below:

Posted by DaveSingh > Dec 17, 2012 08:55 AM | Report Abuse
yep@Kcchongnz.. you are right.. so dont worry fandi...Kcchongnz is telling us how valuable this company is.. he has good intentions...so we got to respect him for that.. not many people here have those motives.. most here are just selfish, greedy and play or talk politics..good on you kcchongnz.. talk more about kfima...you have valuable info we all can use...thanks for sharing..


But even your enemies, you should also be good to them. Why keep on condemning them? Learn from this guy too:


Posted by DaveSingh > Dec 19, 2012 02:00 PM | Report Abuse
Love your enemies, do good to those who hate you, bless those who curse you, pray for those who abuse you. To one who strikes you on the cheek, offer the other also....

Posted by Frank Soweto > Aug 28, 2013 06:50 AM | Report Abuse
sorry kay poh abit ar but Kcchongnz the accountant is right above u, littleshark :)

I really hope this accountant can give a professional opinion about my comments above. I was very tempted to buy Inari as soon as I saw its results. This final results not only very good earnings. Its cash flow also fantastic.

But is this unaudited result correctly presented? I highly doubt so. If it is not, the problem is very very serious. This is because credibility is involved. If there is doubt in the credibility of the management, nothing can be trusted.

I hope I am wrong.

Posted by sythong7 > Aug 27, 2013 08:58 PM | Report Abuse
Hi kc, can I know why you are having this doubt? Which item in particular? Pls enlighten us, thanks.

Refer to the tabulation below. If you look at the balance sheet and work out the change in current assets, there is an increase in 83m in inventories and 69m in trade receivables. How come the cash flow statement is only 10m and 8m respectively? If this is true, there is a gross overstatement of its CFFO. Is there financial shenanigans involved caught red handed, or am I wrong? I hope a professional accountant, I am sure there is someone here, can verify that.

Year 2013 2012 Change CFFO
Current assets
Inventories 105521 22175 -83346 -10071
Trade receivables 92954 24370 -68584 -7901

Looking at its just released financial statements, there is a lot of questions need to be answered. The balance sheet and the cash flow statements just do not match. Is the preparation of the cash flow statement correct? I highly doubt so.

Posted by tsejuie > Aug 26, 2013 09:48 PM | Report Abuse

Hi kcchongnz, based on the Q2 results released for MBL today, revenue has dropped by 29.7% compared against Q2 2012 and profit dropped by 64.9%. EPS to date is only 4.11 compared with 10.4 for Q2 2012. Looks like MBL has had 2 pretty bad quarters. Still making a profit and generating cash but registering negative growth. If we annualise the 1H2013 EPS, the amount we get of 8.22 only gives an ROE of less than 10%. Hence, based on the recent results, will you change your view on MBL?

YES, INDEED THERE IS A BIG DROP IN ITS PROFIT FOR THE LAST TWO QUARTERS. BUT IS IT REALLY CONSIDERED THAT BAD? LIKE YOU SAID, IT STILL MAKE PROFIT AND GENERATE CASH, FREE CASH FLOW. ANNUALIZED EARNINGS 8.2 SEN. IF YOU PAY 1.01 TO BUY OR KEEP MBL FOR 8% EARNINGS YIELD. OR IF THEY MAINTAIN 50% (?) PAYOUT RATIO YOU GET DIVIDEND OF 4.2 SEN. IS IT THAT BAD? ROE IS 11%, STILL .10%. IS IT THAT BAD?

MY PHILOSOPHY OF INVESTING (I SELDOM DO TRADING, ONCE A WHILE I DO) IS A LONG TERM PROCESS. A COUPLE OF BAD QUARTERLY RESULTS DO NOT CONSTITUTE A LONG TERM DETERIORATION OF A BUSINESS FOR ME, NOT EVEN A YEAR OR TWO, ESPECIALLY IF YOU LOOK AT ITS PERFORMANCE AS A WHOLE, EG GROSS MARGIN 43%, HEALTHY CASH FLOW AND FCF, CASH INCREASES IN BALANCE SHEET. MBL HAS NOT A SINGLE YEAR OF LOSSES SINCE LISTING ETC.

ALSO BEAR IN MIND THAT MBL IS RELATED TO THE PALM OIL INDUSTRY, A COMMODITY, IS IN A CYCLICAL INDUSTRY. IS PALM OIL A DOOMED INDUSTRY? IS IT RECOVERING OR CONTINUES TO DETERIORATE?

SO WHEN LOOKING AT THE VIABILITY OF INVESTING IN THIS TYPE OF INDUSTRY, ONE SHOULD LOOK AT THE PERFORMANCE FOR AT LEAST 5 YEARS TO SEE IF IT IS A GOOD INDUSTRY TO INVEST IN, AND WHAT APPROPRIATE PRICE ONE PAYS FOR IT.

I noticed from their announcement that they are buying a plantation and a logging company. While it is good that they are trying to create recurring income, doesn't it show that they have lost focus on their core competency? Or have they really lost out that badly to CBIP in terms of tenders for their palm oil machinery?

IT IS GOOD THAT A COMPANY SHOULD DIVERSIFY ITS BUSINESS A BIT. DIVERSIFYING INTO OIL PALM PLANTATION IS ACTUALLY A RELATED DIVERSIFY INTO UPSTREAM BUSINESS. I DON'T LOOK AT IT AS A BAD CAPITAL ALLOCATION IN THIS CASE.

LOSE OUT TO CBIP IN JOB TENDER? I AM NOT SURE IF THEY ARE CHASING THE SAME KIND OF JOBS. I THOUGHT A FORUMER GARK SAID MBL IS MORE IN THE NUT CRUSHER.

Would greatly appreciate your views on this. Thanking you in advance.

THERE ARE A LOT OF THINGS I DON'T KNOW TOO. I AM JUST A SMALL RETAIL INVESTOR, NOT A PROFESSIONAL ANALYST WHO CAN STUDY IN DETAIL ABOUT THE INDUSTRY, COLLECTING DATA AND ANALYZE THE INDUSTRY, INTERVIEW THE MANAGEMENT ETC, AND FAR FROM PROFICIENT IN THE PALM OIL INDUSTRY (OR ANY OTHER INDUSTRY). THESE ARE JUST MY NOVICE OPINION.

The other KC,
Just watch the video you posted on behavioral finance, a new branch of finance. A very good video. I believe anyone study finance in NZ would have to watch this video. By the way, many characters there are Nobel price winners; Richard Thaler in behavioral finance, Eugene Fama in efficient market hypothesis, Robert Shiller (not very sure).

A few months ago I won a golf trundlers which is worth about NZD200+. I put it up for auction in our Trademe website for sale. I was happy if I could get NZD150. You know what? Somebody bid it up and it was sold at NZD325! Yes, I believe that a $20 note was traded at $26, definitely.

In the video i saw many sophisticated mathematical equation. One of them resembled the Black-Scholes stochastic calculus equation of pricing option, things like warrants, call warrants etc. I remember once I commented on SKPRes Wa that it was expensive basing on option pricing and your response was "nobody calculates like that". You were right, how many people know about Black-Scholes option pricing model with that bloody stochastic calculus equation?

But knowing people are irrational, including ourselves, don't you think that one must know the approximate value of something before rationally bidding for it? Because if not he will be paying too high a price for that? Yeah buy high and sell higher. sounds good theoretically. But what if it is like the tulip mania the video is talking about when people chased the price so high that eventually when one wanted to sell, nobody is willing to buy it and the price just plunged suddenly? No chance to cut loss.

The same thing about the chasing the house price and secularization of the mortgages in mid 2000s in the video. Everything seems well because of that but suddenly house owners stopped paying mortgages and the mortgage securities had no buyer at all and they just became worthless abruptly. No chance to cut loss.

So to me chasing something high in price and hope to sell at higher price is a very risky thing to do. On the other hand if one knows the value of something, for example if you can buy a stock with good business, there must be a minimum value it is worth. And if you can buy lower that that value, where is the risk?

Of course I am talking about investing, not trading or speculating.

i3raymond,
I am one who do not believe people can use macro economic events to predict the direction of the capital market. Appended was my comments on the main thread of this. I am more a follower of the folowing school of thought as shown in the video below:

https://www.youtube.com/watch?v=2It1fzcBoJU



Posted by kcchongnz > Aug 26, 2013 11:02 AM | Report Abuse X
Is macro economic influence on the capital market predictable?
Nowadays with the power of the computer,it is easy to simulate past macro economic events and used them to back test their influence in the capital markets in the past. This has been a favorite research topic and has been carried out by many academic researchers. From what I have read so far, there is no statistic significant results to show that past macro economic events have the influence over the capital markets. Is there any reason to believe that they can in the future?

Those people who have some knowledge about economics would know that the top economists in the world are only 50% correct in predicting the market.

Sure market does go in cycles, but pinpointing the exact or even approximately point of the cycle the market is in now is proven to be a futile exercise. If one is wrong, and he is often wrong in the past, missing out the last leg of a bull market can be a costly endeavor.

Hence using a top-down approach in investing has also proven to be a futile exercise.

I have said many times. Finance and investment is not that complicated. What TanKW has been posting are all about the fundamentals of finance and investment, academic as well as practical. They are really not that difficult to digest most of it if one takes the trouble and effort to do it.

hongchai, the last time I analyzed Redtone, it was based on the ttm results and I found that it was too expensive. It is a good company though looking at the numbers.

The actual 2013 results was much better than the ttm result. Hence ROE and ROIC are all better than before,which were already good.

At the closing price now at 65.5 sen,Pe and EV/Ebitda at 12.5 and 7.9 respectively is acceptable to me to invest in this stock.

yfchong,
I think I have answered this question before. Engineering is many times harder than finance and investment. It is a matter of whether you want to take the first step. The first step is to go and buy a good financial statement interpretation book and familiarized yourself with the three financial statements first. That is the most useful part of investment in my opinion. That won't take you more than a month to familiarized with them.

Then the other part is by standing by the shoulders of giants like Peter Lynch, Warren Buffet, Charles Munger, Philip Fisher etc and see what their philosophies of investing are. There are also many good investment websites which you can learn. A couple I always go to are Old School Value of Jae Jun who were like you before; Professor Aswath Damodaran (hack, this is a free MBA course in Finance); Geoff Gannon,etc. Practice in the market and pay some tuition fees. This part can take you longer time, may be a year or 2 to become a more savvy investor. Just my opinion.

Tan KW has posted so many useful articles in i3. This is one of them. Not only that, he also incorporate other comments which are relevant. Just wonder (again) anybody read them or not. If a person trying to learn something about investment here but not reading articles posted by Tan KW, he would have missed heaps.

Talking about contribution and dedication to i3, nobody beats Tan KW.

I was just testing if somebody actually read and check what I have written. Now I found out that there are two people who have spotted one mistake each.

No lah, faberlicious, you have sharp eyes and mind. Thanks for the correction. My excuse is there are too many figures and hence sure to make mistake somewhere. Is it excusable? Can lah.

So the average FCF is 15% instead of 3% of revenue. That paints a better picture for Willow too. I read a book from a famous value investor. I think he is Pat Dorsey of Morning Star. He said if the average FCF is more than 10% of revenue, put all your money in that stock. Just kidding, don't do that. Remember diversification.

There is also a mistake in the writeup about this. I really don't know why I had this "89%" there which should be 15%.

Is macro economic influence on the capital market predictable?

Nowadays with the power of the computer,it is easy to simulate past macro economic events and used them to back test their influence in the capital markets in the past. This has been a favorite research topic and has been carried out by many academic researchers. From what I have read so far, there is no statistic significant results to show that past macro economic events have the influence over the capital markets. Is there any reason to believe that they can in the future?

Those people who have some knowledge about economics would know that the top economists in the world are only 50% correct in predicting the market.

Sure market does go in cycles, but pinpointing the exact or even approximately point of the cycle the market is in now is proven to be a futile exercise. If one is wrong, and he is often wrong in the past, missing out the last leg of a bull market can be a costly endeavor.

Hence using a top-down approach in investing has also proven to be a futile exercise.

Yes, correct.

謝和弦 - 柳樹下 (Good TV 好消息電視台 心靈樂飛揚)

My new portfolio return

One would notice that all stocks in my portfolio are small to medium capitalized stocks. but why?

I am a value investor trying to find good companies trading at cheap price. It is hard to find them in the large capitalized stocks which I classify as good companies by the metrics of high return of equity and return of capitals. These stocks are closely followed and owned by local and foreign funds and hence would likely to be fully or overvalued. Furthermore a large company is hard to have high growth. A 50m increase in profit is 50% growth for a 100m revenue company, but just a 5% growth for a 1b revenue company.

Kenneth French, a Dartmouth College finance professor found that a single dollar invested in the small capitalized stocks in US market grew to $5522 in a period of 74 years from the year 1926 to 2000, as compared to $2128 for investing in large company stocks. His findings in the UK, Japan and several MSCI countries yield unambiguous results, with the small capitalized stocks returned an average of 2.6% better than the large caps per year.

The small caps are indeed the hidden gems in the stock market, including Bursa. Those selected by me generally have the following attributes:

1. Their business is durable and likely to last for many more years to come.
2. They have good financial position with little debts, or if with significant debts, their profit and cash flow can easily cover many times interest payment.
3. They have good quality and consistent earnings. Cash flow from operations is equal or above net profit on average.
4. They generally have positive free cash flow. Often FCF is abundant at more than 10% of revenue and invested capital.
5. They have high return of equity and invested capital, at least more than 10%.
6. Most of all, they are trading at low multiples such as PE ratio, P/B, enterprise value/Ebit, EV/Ebitda, EV/Sales etc.
7. There is little or even none analyst coverage.
8. Scant institutional ownership.

So far what is the return of the portfolio since three weeks ago? Table 1 below shows the detail return of each stock and the average return of the portfolio.

Table 1
New 23/08/2013
Pintaras 4.99 5.75 0.000 0.760 15.2%
Kfima 2.060 2.030 0.000 -0.030 -1.5%
MFCB 1.700 1.810 0.000 0.110 6.5%
Haio 2.670 2.640 0.000 -0.030 -1.1%
Fibon 0.330 0.355 0.000 0.025 7.6%
CBIP 2.830 2.740 0.000 -0.090 -3.2%
Tien Wah 2.510 2.470 0.000 -0.040 -1.6%
Homeritz 0.430 0.435 0.000 0.005 1.2%

Average 2.89%
KLSE 1785 1721 -64.000 -3.59%
Alpha 6.5%

The average return of the portfolio is 2.9% from the three week period. Nothing spectacular. However it is still 6.5% better than the market return of minus 3.6%. Actually the return of a 3-week period is not a representation of the long term return of a portfolio. We will have to wait for a period of 1 year, or even 5 years for judge the true performance of the portfolio.

Posted by eSdM > Aug 25, 2013 06:13 PM | Report Abuse

ys1.. i m not surprised wit foreign funds buying knm... cos while backward looking ppl here c knm as close to be closed down soon..... following is a write-up on knm by a foreign analyst..... take a look.....

LET'S DISCUSS KNM WITH THIS "FORWARD LOOKING" PERSON HERE.
SO WHICH FOREIGN FUND BUYING KNM AH?
OK, LET US TAKE A LOOK AT THIS GREAT WRITEUP BY THIS FOREIGN ANALYST.

Although debt as a percent of total capital decreased at KNM Group Bhd over the last fiscal year to 33.77%, it is still in-line with the Energy Equipment and Services industry's norm. Additionally, even though there are not enough liquid assets to satisfy current obligations, Operating Profits are more than adequate to service the debt. Cash Collection is a strong suit as the company is more effective than most in the industry. As of the end of 2012, its uncollected receivables totaled 862.5M MYR, which, at the current sales rate provides a Days Receivables Outstanding of 126.82. Last, KNM Group Bhd is among the least efficient in its industry at managing inventories, with 13.83 days of its Cost of Goods Sold tied up in Inventories.

1)SO NOT ENOUGH LIQUID ASSETS TO SATISFY CURRENT OBLIGATIONS NO PROBLEM AH? WHAT IF BANKS AND CREDITORS WANT THEIR PAYMENT WITHIN A FEW MONTHS?
2)SO OPERATING PROFITS ARE MORE THAN ADEQUATE TO SERVICE DEBT? WHAT IS THE TIMES INTEREST COVER? IS THAT RATIO ADEQUATE?
3) ACTUALLY WHICH SHOULD BE A BETTER MEASUREMENT OF INTEREST COVERAGE? ISN'T CASH FLOW COVERAGE MORE IMPORTANT? PROFIT IS NOT CASH, CAN'T PAY INTEREST WITH RECEIVABLES AND INVENTORIES, CAN THEY?
4) SO IF CASH FLOW COVERAGE IS MORE IMPORTANT, IS THERE ENOUGH CASH TO PAY INTEREST OR NOT?
5) WHAT ABOUT CAPITAL EXPENSES OF 50M? WHAT ABOUT MONEY REQUIRED FOR ITS ACQUISITION OF SUBSIDIARIES OF 129M LAST YEAR?
6) IS 127 DAYS TO COLLECT DEBTS REASONABLE?
7) IS DAYS INVENTORIES TURNOVER IMPORTANT FOR KNM KIND OF BUSINESS? IF NOT WHY BOTHER EVEN MENTIONED?

Year over year, KNM Group Bhd has been able to grow revenues from 2.0B MYR to 2.4B MYR. Most impressively, the company has been able to reduce the percentage of sales devoted to cost of goods sold from 90.47% to 82.87%. This was a driver that led to a bottom line growth from a loss of 91.8M MYR to a gain of 82.0M MYR.

1)WITH AN ROE OF 4.4%, DOES GROWTH CREATE VALUE OR DESTROY VALUE? ROIC IS EVEN LOWER. SO ANY GROWTH WITH ROIC GROSSLY LESS THAN COST OF CAPITAL IS A HUGE VALUE DESTROYER FOR KNM RATHER SHAREHOLDER VALUE ENHANCEMENT.

2)DO YOU VIEW 'TAX CREDIT" AS "PROFIT" AS AN INVESTOR? HERE I AM NOT TALKING ABOUT IN THE EYES OF AN ACCOUNTANT. AN ACCOUNTANT POINT OF VIEW IS NOT IMPORTANT TO ME.

bsngpg,
Prudence in investing is the best approach. Be in your own circle of competence. good luck.

Posted by Hafiz Millip > Aug 24, 2013 09:53 PM | Report Abuse
I guess Saturn is new here...masuk terus hantam sifus....bro, learn from them or seek advise. They give FREE advise, I tell you some of them give diamond recommendation where you have to pay big money for the same advise.

Hafiz, Good you appreciate what we are doing here. Please don't use the term "sifu" on me, I ain't one. I am just an ordinary retail investor, sharing some of my views and at the same time learn a lot too from others.

Don't treat the forum as a cult where you must agree and support whoever "sifu" you follow. Without critical comments, (not those simply name calling, using demeaning terms, accusing cheating, conning etc without any substantiations), it won't be good for anybody's investing experience.

One thing you must know. Nobody is infallible in the stock market. No investment system is perfect, or near prefect, far from it. No system, models, software etc are infallible. Listen and read whatever others write and recommend, but you must have some knowledge to analyze and decide yourself. There ain't tooth fairies in Bursa.

bsngpg, you were right in your calculations. It is just that we did it in different way. I based on last financial year earnings of 15.2 sen which I got it from its financial statements for last year. I like to look from the primary source of information, ie from Bursa and then work out the numbers myself. In that way I can see where the numbers come from. One never know if the earnings are from the core business, or one time off item like sale of assets, gain from financial instruments etc.

You are basing on the trailing twelve months which is more appropriate I must say. I didn't do that because i was lazy as more work is necessary to compute those numbers from the financial statements. However i did mention that

"Sure Globetronics's revenue and earnings will continue to grow at a high rate for the next few years. In fact it is already shown in the recent two quarters."

I do use trailing twelve month results often especially when I went into detail analysis of the future income of a company.

Wah this Frank fellow really letting out ah? Let me kepo kepo a bit commenting on Frank's comments. YEAH ROTI CANAI BUSINESS SLOWED DOWN.

MOST times, a cheap stock is cheap for a reason and can be cheaper.

AND MOST TIME YOU CAN LOOK AT ITS HISTORIC FINANCIAL STATEMENTS AND KNOW WHY IT IS CHEAP AND THE SHARE PRICE IS LIKELY TO BE LOWER IN THE FUTURE. YEAH I KNOW SOME PEOPLE CRITICIZE ME FOR STICKING TO THE PAST. FOR ME THE PAST RHYMES.

The newbies ( including me ) tend to get excited when we see these fundamentally flaw counters flying thru the roof and we chased them - just remember what goes up must come down especially these goreng stocks. Sure it will go up but can it stay.

FRANK, YOU WERE NOT WRONG. YOU ARE IN THE MAJORITY.

it's very important that the people running the company has integrity.

KNM? WHAT INTEGRITY. DO YOU KNOW THAT KNM BOUGHT BACK ITS OWN SHARES AT HIGH PRICE BUT AT THE BACK THE MAJOR SHAREHOLDER WAS DISTRIBUTING?

Next invite analysts to cover the stock when they have projects to announce. then shares surge because all the analysts keep plucking these heaven figures from Our Great Leader - Comrade Lee.

SO DO YOU STILL WANT TO BELIEVE IN ANALYSTS BLINDLY?

He wants to form a company to Take over KNM because it's undervalue - then of course when uncle( including me#$$%^!! ) and auntie heard the magic word TAKEOVER the share surged la. But then something happened - The takeover did not go through so back to square one and share drop.

NORMAL MODUS OPERANDI.

he declare from now on we going to give 50% of dividens - err give dividen from where - he got DIGI shares ar?

THAT IS WHY IT PAYS TO KNOW HOW TO READ FINANCIAL STATEMENTS. IF A COMPANY HAS HUGE NET DEBT AND NO FREE CASH FLOW, WHERE TO GET MONEY TO PAY DIVIDEND, EXCEPT FROM THE MONEY FROM RIGHT ISSUES (TAKING HUGE AMOUNT OF MONEY FROM YOU FIRST) OR INCREASED BANK BORROWINGS.

Oh actually he did announced that they are going for rights with free warrants -

FREE? OR TAKING MONEY FROM YOU FROM RIGHT ISSUES?

for me to earn money to play shares I have to steal flower pots to supplement my tiny income so I need to be careful in company I put my hard earned illegal gains to :)

GOOD ADVICE. NOT SURE MANY PEOPLE WILL FOLLOW.

A lot of people do not realize that by continue to invest in this company while hoping for goreng time is an 'opportunity lost'. I sold off at .68 ave and invested in Pantech and Myeg and if I had continue to hold this lousy share I would have incurred additional huge losses and missed out all the gains and dividens in both Pantech and Myeg. At least now I can afford to buy kcchongnz a round of 18 and some roti canais for his always unselfish very time consuming analysts of good stocks if we ever met :)

GOOD LESSON AND EXAMPLES FOR OTHERS. BUT CAN I HAVE 19 HOLES AND MY ROTI CANAI WITH BEEF RENDANG?

The thing that trouble me most about this KNM is the General has got No integrity at all - he fully knows that all his guidance are way off mark and yet he continue to do it and kept feeding the not so smart analysts or maybe cohorts about the rosiest picture of this sinking sub. It's one thing that in all business you go thru cycle of good and bad times but knowing your own company is not in good position but to continue to give or mislead investors about the rosy figures or future is definitely a NO2 and says a lot about the character of this fella

YEAH WATCH OUT MAN! BUT BE FOREWARNED THAT THERE ARE MANY GENERAL IN BURSA.

Posted by bsngpg > Aug 24, 2013 02:38 PM | Report Abuse
My assessment on GTronic :
Layman’s method with calendar year instead of FY. Total div in 2013 is 17sen(5+1+2+5+4) =17sen/RM2.68=6.3%=2x FD rate. I assume the best eps is 20sen and accord it with PE 12X, the Fair Value until Feb14 is RM2.40. With that, if the current market drops further, I will accumulate GTronic by batch every 10% drops from the current 2.68. In my opinion even the very worst BEAR hits such as 2008, the lowest of GTronic is about RM1.80 as by then the yield is almost 10%. Condition is that the fundamental of the business, earning and DPO are still similar as current. If the eps stops growing, the story will fall into opposite side.
On the flip side, I forecast eps is to grow to 24sen and 29sen with FV RM2.90 and RM3.50 in 2014 and 2015 respectively with 20% grow rate each year. This is my sweet dream which keeps my enthusiasm in Bursa warm.
Thank you.

Investors who have bought GTronics 5 years ago would have made very handsome return, beating the broad market by a very wide margin. Congrats. GTronics has evolved from high volume contract manufacturing of electronic products to value-added engineering company. Thanks to its smart capital allocation in spending money in R&D and has been very successful in doing so.

Looking at its operating numbers, I would classify GTronic as a great company. Its ROE and ROIC are great at 16% and 25% respectively. The quality of earnings is good too with Cash flow from operations averaging 2 times its net income. Free cash flow is abundant at about 15% of revenue and invested capital despite heavy capital expenses. GTronic also has a clean balance sheet with zero debt and 106m excess cash.

However whether it is a good investment or not it depends on individuals. At RM2.68, it is trading at a PE ratio of 17.6. It market enterprise value is 13 times ebit. Sure Globetronics's revenue and earnings will continue to grow at a high rate for the next few years. In fact it is already shown in the recent two quarters. However, the market valuation is still way too stiff for me. I am afraid a lot of future growth expectation has built on its price already.

Frank, this one of yours is one of the best posts in this thread. This is also exactly, right to the point, of what I want to say to my good friend yungshen1.

Posted by yungshen1 > Aug 23, 2013 08:42 PM | Report Abuse
my friend kcchongnz i want ask u.this knm can invest for long tearm.i need your opinion.

The word "invest" is not an appropriate word for punting KNM. "Investing" in KNM will end up instead of "A soul full of hope", but "a hole full of soap".

But one thing I know is the almighty General will sure goreng this stock, but i don't know when, and by then what price is KNM? Another thing I know, more retail investors will get hurt. Of course the General will emerge again as the winner.

So my friend yungshen1, you have to take responsibility of your own decision. I can't tell you if you should "invest" in it for long term.