Farm Fresh sales is over 80% Malaysia and remaining mostly Australia & Singapore. Dutch Lady focuses on Malaysia.

However, 80% of Able Global dairy products are exported, to countries in America, Africa and South East Asia. They don’t compete heads on.

Not to mention Able Global is also into tin can manufacturing and lately property development.

Could anyone trust Tan Teng Boo’s prediction?

This guy has parked half of iCAP’s fund as FDs. Not for one year. Not for two or three years. But for over a decade! He has been waiting for the market crash for as long as I can remember.

During this long period, we had 1MDB, the collapse of oil price in 2015 and in 2020, five prime ministers since 2018, and the Covid pandemic. Yet he picked up no bargain.

During those intervening years, on dividend adjusted basis,
1. QL was up from RM1 in 2011 in almost RM6 today
2. Allianz was up from RM3 to RM19
3. United Plantation was up from RM3 to RM21 (yes, iCAP did buy into UP lately, currently a tiny 2% of its portfolio)

Even Maybank was up from RM3.7 to RM9.5 during the period.

How much did iCAP’s earn from the cash that it locked in bank FD’s? Not to mentioned 1.5% was handed over as management fee every year.

TTB is also a big fan of China. What is China stock market return over these years?

With such track records, I’m actually worried that now he has a U-turn and starts predicting Bursa's bull run!

@Fabien, may I know where did you get the announcement that they abandoned the Guocera expansion plan?

If you have insight into the Israel-Hamas War, you can trade in many far better ways outside the Malaysian market. Just open a US stock trading account. Promote your view in Reddit.

Don’t waste time on BJFood, which has other problems besides on the on-going boycott. Unless you’re stuck with its shares bought at high prices.

Echo the other comment. Don’t bring race and religion into this forum.

The Board deserves praise for returning unused capital to shareholders through special dividend of 50 sen.

The total amount of special dividend is about RM157m, which is greater than the proceeds from disposal of HLIT (~RM36m) and HCB (~RM80m). But RM157m is only a small fraction of the latest company net cash at RM1.7b

As I’ve commented earlier, the share price will re-rate upwards if the Board returns more cash to shareholders. Today share price movement has just confirmed the point.

To reiterate my earlier comments, let’s compare against Bermaz Auto, which is probably the best run automotive local company. BAuto trailing twelve month revenue was about RM4b, supported by a net cash position of about RM400m, or about 10% of annual revenue.

Applying the same standard, HLI’s annual revenue of about RM3b needs only about RM300m of net cash as working capital. It could safely return RM1.7b - RM300m = RM1.4b of cash to shareholders without affecting its business operations. That works out to be about RM4.5 cash per share.

According to Kenanga, the passenger vehicle sector’s average forward PE is about 11 times. Applying this average, the share price is still worth 11 x RM0.927 (Kenanga’s 2024F EPS) = RM10.2.

In other words, if the Board is willing to put cash to better use, conservatively the share price could be RM10.2 plus special dividends of RM4.5! This has not even taken into account of HLI’s dominant market position. Besides, by showing it cares about minority shareholders' interest, it could enjoys an even higher PE multiple.

Moving forward, I hope the Board could give greater clarity to shareholders and the market how it would best utilise its cash.

For most people, the string of resignations is sufficient to raise an alarm bell. For those who choose to look the other way, no amount of evidence will be sufficient.

I’m not so naive as to expect I can get a straight answer from AGMs, regardless of whether I hold one share or > 20% of shares.

As said before, I continue to stay away from value traps. No, not even a single share.

Good luck to whoever hoping to sell close to or even higher than NAV.

This time round, will more directors leave due to “other commitments” or “personal health issues”?

What happened in 2020, besides Covid?

Could it be the innocuous single sentence mentioning RM6.68m dual listing expenses slipped into page 14 of 2020 Q4 report?

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3073067

On Nov-24 of the same year, it was the turn for the Chairman Datuk Ng to resign, initially giving no reason.

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3107685

But interestingly, an amended announcement was published a week later on Dec-1, with Datuk Ng’s resignation reason updated as “difference in opinion”.

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3110297

This was followed by the resignation of Darin Siah Li Mei on 3-Aug 2020, citing “health issue” too. Datin Siah joined the board only a year ago.

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3074128

Was serving the ICAP board not conducive to personal health? :)

The previous round of INED resignation happened in 2020.

On 24-Feb 2020 Madam Leong So Seh resigned citing “personal and health issue”

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3026283

Another independent director resigned.

Datuk Mohd Nasir, after serving merely 28 months, tendered resignation “due to his other commitments which require his attention and time”

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3419228

Really? Such a busy person?

@Patient investor, well, everyone is free to air his opinion. You may continue to promote yours, and hopefully it could boost confidence and sustaining the price.

I enjoy reading this forum, but I shall continue to stay away from value traps and keeping my investment on more solid ground. Good luck to anyone wishing to sell at above NAV!

Haha, indeed. The brand value has been cultivated over many years through newsletters and annual events. Unfortunately, it's non-transferable. If COL musters enough votes to shake up ICAP, the "Fan Club" goodwill will evaporate overnight.

Why will COL pay a premium for ICAP if the maximum value it could extract is merely the NAV per share, minus expenses?

@Patient investor, maybe many small cap companies have been knocking at ICAP doors of many years. Yet ICAP was still sold at a discount for at least a decade.

You may also argue that COL does not want to liquidate ICAP. COL is willing to pay a premium over ICAP’s NAV as it sees so much potential (although COL’s purchase records over a decade show otherwise)

Some businesses do sell at a premium over its book value. Think of Heineken, Carlsberg, Nestle. The businesses have competitive advantages in the form of brands, product portfolios, distribution network and so on.

But for a fund like ICAP, what competitive advantages does it have? It’s just a collection of other company shares and bank FDs.

Of course TTB may say he IS the competitive advantage. He is THE REASON of the premium.

But if COL treasures TTB so much, they would have handed their money for TTB to manage in a separate fund instead of engaging in a decade old feud.

COL will never pay premium for ICAP shares

“For iCap shareholders who want to sell, take advantage of the situation by queuing at high price as close as possible to NAV, or even at a premium.”

Such opinion assumes COL is willing to pay a price up to, or even exceeding NAV per share.

But what is the maximum value that COL can realise if, a very big IF, that it gains control of ICAP?

Unfortunately, the maximum value per share in liquidating the fund will be no larger than NAV per share.

In fact, given that ICAP's portfolio contains some pretty illiquid stocks, any disorderly disposal will cause share price to collapse. So in practice, the liquidation value is less than NAV per share.

If COL is rational, why should it incur losses by buying above NAV per share?

Anyone can place their sales order at or above NAV. Just that the orders will not be fulfilled.

The fund manager wrote in the latest quarterly report
“As I wrote in the iconic i Capital publication …”
“… I gave a rare presentation on Malaysia’s longer term investment outlook”

Iconic! Rare! He put Warren Buffett to shame.

AIG got into trouble because it recklessly sold “insurance” to other hedge funds betting against the housing market. Such situation does not exist in Malaysia.

Check the types of investments owned by Allianz Malaysia in Note 8 of Annual Report.

“Active shareholders may attempt to realise the full value of the CEF by proposing a share repurchase, conversion to an open-end structure, takeover or liquidation.”

Well said.

Story of Benjamin Graham shaked up Northern Pipeline
https://www.businessinsider.com/benjamin-graham-was-the-first-shareholder-activist-2016-6

I hope Malaysia could emulate US investing scene. We should have activist investors to shake up complacent and self interested management for the benefits of all shareholders.

The father of value investing, Benjamin Graham, famously asked in 1932 “Is American Business Worth More Dead than Alive?”

The same question applies to ICAP today.

observatory, 
you got the rights to challenge the board as long you are shareholder, looking towards it. Ain't the discount happens before the 6.6 million charges?

__________________________

I don’t have the right to vote and challenge the board as I’m not a shareholder. Anyway I have no intention to be a shareholder in this value trap.

But I do have the right to air my opinion here and point out the inactions and failures of the board. And I look forward anyone showing me, with facts and logic, why I’m wrong.

The failure of the board to stop him from charging the RM6.6m was even more outrageous. The board should have asked themselves who pay their salary, the fundholders or the fund manager?

Shortly after this incident, several board members did resign, including the Chairman, and a newly elected board member, though they invariably cited “personal reasons”. What could you infer from their actions?

If I have the votes in AGMs, I would definitely vote against these pliant board members. I would be more than happy to vote in any new faces to shake up the place, be it Lo Kok Lee or any others. Not to mention from internet I can see Lo Kok Lee has a good rack records and background.

The only attractive thing about ICAP is some of the good comments here. The only reason I continue to pay attention to this value trap.

I was once attracted by ICAP seemingly deep NAV discount.

But the RM6.6m dual listing expenses charged to ICAP fund holders shows why it was justified to trade at huge discount.

First, no shareholders’ approval. Second, anyone with some foreign stocks experience knows dual listing does not narrow NAV discount as claimed. Many stocks traded at a discount in their secondary market as investors there are not familiar with the stock. Is the ICAP fund manager ignorant? Or is it a diversionary tactic in the face of criticism on the widening discount?

Why it took him so many years to “study”? And after all those wasted years with widening discount gap, he had the cheek to pass the bill to the fundholders!

Intelligence? Integrity? Haha.

Global asset managers are investing in infrastructure funds
https://www.reuters.com/business/finance/blackrock-quarterly-profit-rises-strong-assets-under-management-2024-01-12/

What is the implication for AGIC if it eventually win or lose its case against MyCC?
https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3415175

Good sharing. As a principle, a person should not be able to claim more than his actual expenses from his medical insurance policies. Any extra benefits should come from other types like critical illness policies. Isn't that how it should work?

Thanks for the explanation. Your point that medical inflation is not projected by actuaries and not reflected in CSM is important one.

@wsb, how big is the medical business contribution in terms of premium and profit? How might MOH policies affect it?

https://www.bnm.gov.my/insurance-takaful

I'm not familiar with banks. But I don't think banks can freely define their non performing loans, which are classified as those overdue for >90 days. Remember banks are heavily regulated by the Bank Negara.

The LLC mentioned here excludes regulatory reserve. Otherwise it would be even higher.
Besides, since RHB management claimed their loans are well collateralized, they don't need so much provision.
However, bad loans are not static figures. When economy turns sour, it could rise fast, and the coverage ratio will drop. Heavy provisions will be needed which hit earnings. Maybe this is why some other banks are prudent by maintaining their LLC at high level.
But this is just one of the many variables. Among local banks RHB has the highest CET-1 ratio.
Honestly I find it hard to understand banks' earnings. They have many levers to adjust and smooth their earnings through provision, write back and so on. Unless one can understand how the different pieces work together, otherwise it's hard to compare the profitability of one bank with another over a short term basis.

RHB management said they were comfortable with lower LLC because their problematic loans are well collagenized.
However, there are only two banks where LLC as of 3Q23 is lower than the pre-pandemic 4Q19. For RHB it's 75% vs 86%. The other is BIMB which is 127% vs 174%.
Public Bank, for example, has increased to 187% from 124%.

All is relative. Assuming RHB management is right, and the economy continues to improve, RHB will not need to do extra provision. Profits will not be hit.
Meanwhile other well provisioned banks will have the option to write back their earlier provision, giving their profits extra boosts. This option is no not available to RHB.

Anyway, there are many factors to consider besides LLC and dividend yields. It's unclear to me which banks will outperform. The simpler approach is to distribute the bets.

Not just RHB but other bank stocks also experienced selling pressure lately. As for EPF, despite lots of activities, its shareholding is maintained around 41% , +/- 1%. Long term shareholders could simply ignore EPF actions.

It's possible that Airport major shareholders make mistakes. But for whatever reasons that they accumulate Airport shares, I'm quite sure it's not for the purpose of price support or charity to minority shareholders.
Beside it's difficult to compare RHB with Airport as they are in different industries with different competitive landscapes.
Better to compare RHB with other banks. Why is RHB a better buy than say Maybank, Public Bank, Hong Leong Bank, and Ambank?

Under normal circumstances, what could major shareholders gain from providing price support?
You may look at the historical loss suffered by Airport during the pandemic period. But they may well be looking at the future prospects of post Covid recovery and favourable government actions.
For the same reason, these managers also look beyond the historical profits and dividends of RHB.
Interpreting their actions from the framework of price support is misleading.

Why should EPF support the share price? What are the benefits for EPF and EPF contributors in maintaining a high share price level, only for other investors/ speculators to take advantage by dumping their shares to EPF?

HLI disposed HLI Trading Limited to a related party. This came after the disposal of Hume Cemboard Industries 6 months ago

It's difficult to predict winners, especially on a short term basis

The dividend adjusted return over the period of
(1) 10 years
Hong Leong Bank 85%
Maybank 75%
Public Bank 64%
CIMB 10%
RHB 9%

(2) 5 years
RHB 38%
Maybank 35%
CIMB 24%
Hong Leong Bank 6%
Public Bank 2%

(3) 3 year basis
CIMB 48%
Maybank 28%
RHB 21%
Public Bank 10%
Hong Leong Bank 10%

(4) 1 year basis
Maybank 12%
CIMB 8%
RHB 3%
Public Bank 0%
Hong Leong Bank -3%

For long term investors, just enjoy the dividend and don't be overly concerned about share price. If management is capable and company fundamentals are good, it will show in future results and share price shall follow. Time will tell.

Dividend seekers choose Maybank and RHB. For asset quality, Public Bank and Hong Leong Bank. For growth, Hong Leong Bank. For those who are not sure, just take a small position in each bank when valuation isn't demanding.

If you believe in the collective wisdom of analysts, this is the latest concensus for the six large and mid size banks.
Maybank, 8 buy/ 11 hold/ 2 sell, consensus TP RM9.38, upside 4%
Public Bank, 14 buy/ 5 hold/ 2 sell, consensus TP RM4.73, upside 11%
CIMB, 16 buy/ 3 hold/ 0 sell, consensus TP RM6.31, upside 10%
Hong Leong Bank, 14 buy/ 1 hold/ 1 sell, consensus TP RM22.50, upside 17%
RHB, 6 buy/ 8 hold/ 3 sell, consensus TP RM6.08, upside 11%
AM Bank, 12 buy/ 3 hold/ 0 sell, consensus TP RM4.37, upside 8%

Yes, I only picked up the negative aspects because I tried to explain why the market might not be giving RHB a higher price despite the earning and dividends you mentioned

According to Annual Report, Wessex Water RAB value at year end was £4.1 billion (RM24.4 billion).
However, we need to take debt into account, as the assets are funded by both debt and equity.
For example, Hong Leong assumes 1.2 times Enterprise Value/ RAB, and puts the equity value after debt at RM11.5b (yes, it's still a large sum versus YTL Power market cap of RM18.6b). But whether it's 1.0, 1.2 or 1.4 times are also subjective, depending on historical transactions and current market conditions.
Lastly, we also have to consider that a high EV/ RAB value can only be realized during disposal. We can't directly unlock the value. Therefore such assets are usually traded at a discount, though the level of discount is again debatable.

@dragon328, thank you for your always useful explanations!

For telecommunication, he expected regulated return of 9%, but did not elaborate. I don't understand that. Unlike Wessex Water or Tenaga, there is no regulated return for YES. What does the 9% mean?
He said second 5G network would not impact YES since government has promised both DNB and the second network will offer the same wholesale prices. Really? If there is no differentiation, why would Maxis push hard for the second network?

MSWG asked about sustainability of Power Seraya's strong earnings. The company is confident about short term prospect, but beyond that it depends on market condictions which they can't control.
I didn't hear very clearly about his response to shareholders' questions on whether they expect earnings to revert to norm based on latest contracts.
Can anyone who attend share his response?