http://www.theedgemarkets.com/article/cae-confirms-advanced-talks-airasia

Andrew, doesn't sound right. From your story, you would have been best off if you just held your Hevea shares all the way through.

Specter you're a nice lad, but that attitude won't take you far. You practically lucked out with the North Korea destabalization of the markets, which has triggered the sell off in global equities these past 3 days.

You made a good sell decision, but the magnitude of it is being accentuated by something totally out of your control. Don't be so lanxi and run salt into other people's wounds. I could care less, but the others here...I mean you get me right?

If you've sold and think you made some handy profit, begone and be at peace. No need to rub it into people's faces. That Hevea is down RM0.15 since you sold is totally out of your control.

This builds character. Humbling and beautiful experience for me. Way to go.

I believe some sell-off yesterday was contributed to June Wood industry subsector IPI growing only 2.8% YoY vs much higher in previous months.

http://www.midf.com.my/images/Downloads/Research/Econs-Msia-June-IPI-MIDF-100817.pdf

Amazing. From 1.78 to 1.61 in a few days. Alas, in for the long haul. Buckle up boys, it's about to get rough

Wait for RM0.75 better yet...this is not going to be pretty for the next few months. Next year should be a good turnaround though.

Now with steel price so high, it will impact Engtex, since they are downstream player, not upstream. As downstream their procurement price will be increased, which is a negative. Prepare for some heavy selling as the upstream steel counters jump up.

Their jobstreet ad seems too optimistic...or not? https://www.jobstreet.com.my/en/job/senior-marketing-manager-textile-3360610?fr=21

Some interesting details:

- Vietnam operations to begin in 2018 only!

- Prolexus Textile Park in Kluang, Johor, of which the Group’s fabric mill will be situated, will have an annual capacity of up to 200 million yards of knitted synthetic fabric
(initial production per Abridged Perspectus and Annual Report is only ~15 million yards!)

- annual capacity is 14 million pieces and it is projected to reach 40 million pieces upon completion of the expansion plan in Vietnam
(initial production capacity expansion from Vietnam is just 3.5mil pcs per yr, only 13.6% of the implied eventual Vietnam plant capacity)

Did any current holders top up in recent days at sub RM1.25 levels?

Unlikely better Q2, dwindling unbilled sales + lack of launches...eventually the revenue/profit has to dry up right? Management also is smart, push back new major launches into 2018/2019. Present shareholders may have to suffer (but get decent dividends in the interim)...but prospective shareholders can afford to watch from the sidelines and come in when the stock is even more depressed than it is now.

I think no harm, soon we go to RM1.15, then RM1.08, then RM1.05....at some point I will buy, but not yet, and not today.

Wait lah, what's the rush? The selling has just started.

Calm down boys. We may go down to 1.60. Those in for the long run know the big picture is very much intact. As Peter Lynch and Ben Graham said, don't sell until or unless the story has changed.

If you calculate the EV/EBITDA and EV/EBIT for T4Q, it is under 4.0X! Lots of future expansion growth totally disregarded.

Hopefully I can come in within the next 2 weeks.

@Skliew, you sure that 130mil is already paid, or just a part of it is?

Tomorrow maybe shaky due to the Erin statement.

Anyone knows what this means?

------------------------

As at the reporting date, the capital commitment of the Group is as follows:

Property, plant and equipment:
RM’000

- Authorised and contracted for
87,932

- Authorised but not contracted for
33,683

Buying low P/E ratio stocks only works if you can be certain that future profits will rise, NOT fall.

I happen to be reading Seth Klarman's "Margin of Safety". He's a legendary investor.

This is what he says of PE ratios:

One simplistic, backward-looking formula employed by some investors is to buy stocks
with low P/E ratios. The idea is that by paying a low multiple of earnings, an investor is buying
an out-of-favor bargain. In reality investors who follow such a fomula are essentially driving by
looking only in the rear-view mirror. Stocks with a low P/E ratio are often depressed because the
market price has already discounted the prospect of a sharp in earnings. Investors who buy such
stocks may soon find that the P/E ratio has risen because earnings have declined.

Low P/E signifies that the market expects future profits to FALL. Sometimes the market is wrong, but usually it is correct. There's always a reason for low/high P/E ratios.

Anyways, here's a fresh report from Maybank. Downgraded the TP. Lowers profit for 2017 and 2018.

http://www.thestar.com.my/business/business-news/2017/08/09/maybank-maintains-hold-on-tambun-indah-land/

I do believe Tambun is a great company, best ROE of all developers in Malaysia. However, it is suffering like every other company, and will buy in once signs of the property market actually having bottomed out start to show (or if Tambun sells at unnecessarily low valuations, like 0.8X P/BV.

Guys, don't forget about the low base effect too for Q2 2017. In April last year, they had to shut down one of the production lines for particleboard. So that in itself should provide some boost to YoY profit growth for Q2.

Also as indicated in the research reports Hevea has moved further up the value chain and are producing NFA-grade particleboards, offering superior margins to Super E0 grade boards. This again should provide another YoY boost.

http://www.bursamarketplace.com/index.php?ch=research&pg=research&ac=197175&bb=200916

It might be undervalued but unlike some other wood based companies on Bursa, it has not capacity expansion to drive exponential growth in the coming quarters/years.

Nice, weak holders and traders shaken off. Now we can move on towards 1.80!

Wow, nice profit jump. But the price has been bid up waaaaaay too high! 41X P/E (after taking into account latest Q)...walao!

Can share CLSA report? Maybank published very good revenue/profit/eps/fcf numbers but their TP is very subdued since they use a SOTP based valuation method. I want to see if it is a similar case with CLSA or not.

Hold steady fellows, more discounts on the way

This is a cash cow for sure. Starting to look attractive once more. Top line was good in the recent results, but just opex ate into bottom line.

Wow, red red all over. Worst being Hevea. But these are beautiful days. Time to buy things. Not Hevea. Still hold it, Q2 to surprise on the upside.

To those thinking of buying just because the stock has fallen...beware. Make sure you know what you're doing!

@jeotay, issue with MUI is that it is a massive diversified conglomerate. Parkson is still at the end of the day pretty focused on the departmental store segment. So they're not really same/similar. MUI will always suffer from a "holding company discount".

JF Apex has produced a great research paper, but be patient. Come back at the end of October/early November. Or if there is a sudden plunge in the coming 2 months.

@Dualshock, warrant exercise price was adjusted to RM0.83 from RM1.25 due to the 1:2 bonus issue. Automatically the number of warrants and the exercise price gets adjusted.

The good thing about these warrants is that they should provide the company with around RM100mil cash, reducing net gearing to 0.5X and giving them a big chance to pare down bank borrowings and save RM7mil annually on interest expenses.

Aiya, market give you a discount, lagi lu mau tanya, kenapa kasi saya ini diskaun?

I mean seriously, if you truly do believe in the company's fundamentals and prospects, then these are the times you ought to be prepared to "hit that fat pitch!". I waited, didn't come in today. Maybe tomorrow at RM0.68 can, lets see. I'll settle for that.

All the best for the week ahead. Let's hope for RM1.80 to be breached!

However given that there are expected to be around 100mil warrants to be converted between now and October (i.e. just in 2.5 months), I think there might be a sustained downwards pressure on price, so better stay away for now and come back once the warrants are settled.

Looks interesting. Attractive valuations. Must do further due diligence. But I've added this to my watchlist!

Q2 result out end of the month, Kraken revenue/profit will only show in Q3 as first oil was achieved right at the end of Q2.

I would honestly suggest to start accumulating at sub RM0.70 levels in anticipation of sustained strong earnings in Q2 2017, and a huge jump in earnings from Q3 2017 onwards (as then Kraken will contribute 70% of its BBC and Olombendo will contribute 100% of BBC and Sterling III will receive some form of compensation for delay from the field operator).

My prediction is for a revenue of RM450-480mil in Q2, and thereafter RM550-580mil in Q3 2017. By Q4 2017 revenue should be at RM620-650mil, implying a full year revenue of RM2.6bil in FY2018. This is premised on the assumption that there is NO improvement in the OSV sector, all improvement comes from FPSOs coming online and getting fully commissioned.

If you read the Maybank research report for example, they only have a TP of RM0.68, but those guys forecast EPF at 11 sen for FY2018. Doesn't make sense, cause they seem to imply a P/E ratio of 6.2X with their TP, but Armada should easily be trading at 8-10X PE, so you can revise the TP upwards yourself before Maybank changes track during this coming quarter.

I bought at 0.605 but was just a small amount lah. Now I can buy 4x as much this coming week. I think RM0.90 by year end is relatively secured, and there's not many counters I can see a near certain 30% with downside protection. Armada fits the bill.

I mean a few months ago this went to Rm0.82...so the current price of 0.695 is considered just a small return for me.

Don't be too sure guys. But Hevea does seem to have strong institutional support. Very good financial health. Great growth numbers. Capacity expansion. Rubber wood costs have been moderated by government. These will likely be a very kind 1-2 years for Hevea. Let's just ride it. Set a TP to trim a portion of your portfolio to lock in profits, then another TP to exit entirely. For me, first TP is perhaps RM2.12 by year end. If we hit that, I sell. If not I wait for RM2.30 in the middle of next year. Depends on the overall flow though. I won't sell if the momentum is very high. For example in Q2 results Hevea has a chance of 30-40% growth YoY due to low base effect from production line shutdown last year.

Also next year Mushroom and new RTA line will contribute, again leading to 10-20% YoY growth n each quarter.

In fact sometimes I dream the price could even hit RM3 within 6 months, but wishful thinking!

Guys, there is a new particleboard and RTA being mentioned in the Hong Leong research papers. Any idea when those are supposed to go live?

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5507233

Europe expansion incoming?

Diversification (or diworsification?) into the disposable food packaging industry (paper and plastic) Good or bad move?

Look, AhmadZaki is correct. He may or may not be working for MMHE, doesn't matter. They simply do not have many fabrication-related jobs. Yard utilization is below 50%.

But that's the beauty of it. All MMHE needs is one major contract win, and everything changes. The sell queue is very thin, and very quickly the price will get bid up. Bokor alone is not enough, but Bokor + another big win will see them through the next 3-5 years handsomely.

Question is...when do they get another big win? There is Kasawari from Petronas and Pegaga from Mubadala...the Pegaga tender has already been sent out to only TWO companies - MMHE and Sapura Energy. It's worth almost RM1bil and will be given out at year end. The way I look at it, MMHE is in a much better situation to get Pegaga than Sapura Energy. But even let's say it is a toss-up...the market is not pricing this enough into the share price.

The other thing...MMHE has a net cash of around RM680mil. Market cap is RM1120mil. That means there is RM0.425 net cash per share. There is basically zero long-term debt.

And finally, MMHE has received approval from the board to construct the third dry dock. Completion is estimated in 2020. Amount set aside for this major exercise is RM400mil.

To me, this company is in a heavy downcycle. I CANNOT KNOW for sure when the turnaround will begin. But the turnaround will come, and when it does, the share price will re-rate very quickly. It is Petronas' in-house heavy engineering subsidiary.

What matters is:

1) Buy at the right price. I deemed 0.5X BV to be a decent entry price. Now it falls further? Time to think about buying more!

2) Have a long-term view and long holding period. I'm prepared to hold it for 5 years. I don't know if it will be worth more than my entry price in 12 months...but in 5 years? I am almost certain about it.

3) Don't buy on margin and have holding power. Don't invest into this company if you need to withdraw your investment within 3 years...you could well likely withdraw losses and miss out on the ensuing gains.

I've decided...I'm going in again on Monday (or sometime in the week). I believe the price doesn't reflect the value fairly. I bought at 0.605, 0.630 and now would be around 0.690-0.695. I simply can't find anything to buy in the marker that I can be certain of its value as I am of Armada.

Joetay, I bought Parkson under the assumption that if they themselves cannot transform, they will sell out. Not impossible. They have prime real estate that a online superpower can make very good use of. Now this is called an "asset play" strategy, and should only be done sparingly.

Minggu depan, ayuh kita kearah RM1.80.

Does anyone have access to the full RHB MMHE report?

All it needs is a Mubadala or Hess or a major Petronas award and this thing will kick into gear in no time. Worth collecting, but make sure you don't buy on margin as you need to have holding/staying power.

Guys, don't talk nonsense lah. NTA was RM1.58 last quarter, fall to RM1.57 this quarter. The RM2.11/2.25 reported on Bursa is a TYPO likely referring only to total assets.

Got a feeling this one engine will start again tomorrow, up to RM3.40 then on to RM3.60 approaching the quarter results. We should have NP of RM500mil, ROE of 8.5%. Extrapolated full year ROE should be easily 30%, and the stock is trading at merely 1.8X BV. So lots of room to run in that regards. Market "does not believe" the ROE, simply because they expect AA's profitability/growth to be unsustainable, but in these prolonged low oil price environment...it might make AA a deeply undervalued play. If you assume ROE next year to also be >25%, then P/BV should catch up to 2.5X. We could see a further 50% upside from these levels (excluding AAC).