A more relevant macro factor could be how our DPM's threat of palm oil "trade ban" against EU play out? Although UP products may meet whatever ESG standards out there, could it still be affected by the fight? What is the level of dependence on EU market?

Having said that, in my opinion, don't let macro view to have too much influence on investing in UP.

First, UP management actively smooths price volatility through hedging. If you have conviction on CPO price direction, it is more rewarding to focus on other plantation companies that don't hedge, or better still, the commodity contracts.

Second, no one can predict the outcome of Ukraine War with good confidence. Some may believe Ukraine's victory is near. Others may believe an outright Ukraine's victory could lead to a nuclear response from Russia. What will happen to CPO price then? If anyone has good insight, could it be better to bet on gold, energy, defense stocks and so on?

Amid the disappointment, EPF has crossed the 5% reporting threshold. EPF held 15 million shares in Mar 2022. It has increased to 23 million.

In 2019 YTL Cement acquired the company from Lafarge at RM3.75 per share. At the time of acquisition, the company already experienced 10 continuous quarters of losses. Right now the company is in a much better position.

I like reading ICAP reports.

In the report just released, the manager trumpeted " icapital.biz Berhad has achieved a superior NAV and share price returns of 15.74% and 9.35% respectively for the two years ended 11 January 2023"

Normally investment funds will present their 1, 3 and 5 year return. Seldom we come across fund managers boasting their 2-year return, and also not consistently reporting their performance.

In ICAP case, it could only mean one thing, that the 1-year return is bad!

So it's not a surprise when I found out:
12-Jan-20222, NAV RM3.55, share price RM2.18
11-Jan-2023, NAV RM3.38, share price RM1.97
The one year return of NAV and share price are - 4.8% and -9.6%

As a rule of thumb, even good funds underperform one in every three years. Nothing to be shamed of. But moving the goal post to hide negative returns speaks volume about this manager's insecurity!

In light of Hong Leong Industries's ambition to expand its cemaric manufacturing capacity, I checked out a few global leading companies.

Apparently Mohawk Industries is the world largest flooring company. 2022 revenue was about USD12 billion (about 1/3 contributed by global ceramic segment). Past 5 year operating margin and ROE are about 10% and 11% respectively.

In our region Thailand SCG Ceramics is number 3 in the world. Past 5 year operating margin and ROE are about 5% and 4% respectively.

From the casual check, ceramic tile business does not seem to be overly exciting. My guess is it also ties to global housing producion. Next few years will not be an exciting period, to say the leasat, given housing market has cooled in many countries due to higher interest rate.

Yes I believe Spain manufacturers will suffer from higher energy price. However for time being European gas price has returned to pre-war level. Of course higher energy prices may return later this year. But European energy crunch may sort itself out by the time HLI completes its manufacturing expansion.

Perhaps a more important consideration is the coming EU's carbon border adjustment mechanism. A high tech low energy consumption plant may offer advanatges against older plants by competitors.

But overall I'm not terribly excited by ceramic tile business as compared to the already proven motorcycle business. It's better for the management to return the RM400m cash to shareholders if it cannot achieve a double digit return.

The company has clarified in a follow-up announcement today:

"We refer to the announcement made on 10 January 2023. Unless otherwise stated, all definitions and terms used in this announcement shall have the same meanings as defined in the previous announcement.

After consideration of the MIDA’s approval, UTB wishes to make further announcement as follows:-

The approved "Design, development and manufacture of configurable presence and distance sensing time-of-flight (CPDS-ToF) technology (“the approved technology”) is currently being adopted in the production of some new products beginning January 2023 for our customers.
Barring any unforeseen circumstances, UTB expects that more than 1/6 of the Group's revenue will be generated from the new products categorized under the approved technology and profit generated will be tax exempted. The profit from the remaining of the Group’s revenue will be taxable at the statutory tax rate of 24%. Thus, the effective tax rate of the Group for the current year is estimated to be higher than the preceding years.
Uchi Opto will also adopt the approved technology into other new products and the effective tax rate for the Group shall improve over time.
In the meantime, Uchi Opto wishes to clarify further that the other 3 Applications submitted were not approved by MIDA and Uchi Opto endeavours to look into new applications for incentives.
This announcement is dated 12 January 2023."

Effective tax rate will go up. At least in the short term.

Spike in 2023 earnings due to IFRS17 adoption, or also driven by real business outperformance?

"...out of the 4 applications submitted, MIDA has granted Uchi Optoelectronic (M) Sdn Bhd (“Uchi Opto”) (a wholly owned subsidiary of UTB) pioneer status for the activities of " Design, development and manufacture of configurable presence and distance sensing time-of-flight (CPDS-ToF) module" for a period of 5 years from the production date which will be fixed by the authorities at a later date."

How many applications were successful?

@Thirai,
Net cash from operating activities in Q1 to Q3 were minus RM10m, RM58m and RM14m. Working capital continued to grow (by RM31m, RM10m, RM33m) in line with growing revenue.
Subtracting purchase of PPE, which was just a few million, quarterly FCF was minus RM10m, RM56m and RM14m.
Compared against previous years, both OCF and FCF hold up well.
TTM EPS of 49 sen can be misleading as it greatly benefits from forex gain. Excluding such gain, core 12m EPS is only about 35 sen. Then the current share price is about 9 to 10 times historical PE, which is close to the past 5-year average.
Besides the market may be worried about economic outlook at developed markets like US and Europe. Recession may trim demand and therefore revenue, which has grown a lot over the last few years. Decrease in revenue may reverse the operational leverage and compress margin.
In fact the share price of many exporters are also not doing well too. That is despite some have continued to report good earnings until now.

Is there an irrational exuberance? It depends on whether the current level of dividend is sustainable.
I'm not sure whether there is a metric that indicates the level of cash that can be prudently returned to shareholders, something like free cash flow. AIA publishes its Free Surplus and Underlying Free Surplus Generation (UFSG) figures. However Allianz's disclosure is rather limited.
Therefore I will rely on the payout ratio (though earning may not be representative of the true picture, , at least before IFRS17).
We already know that 2022 full year dividend is about 177*0.85 + 169*1.02 = RM323m.
During 2019-21 period, net profit was about RM500m per year. I forecast 2022 full year profit to be around RM450m. So the 2022 payout ratio will be in the range of 65% to 70%.
Such payout level means the company is unlikely to be fast growing in the future as it sets aside less capital to fund its growth. However 65% to 70% is not excessive either. Given the stability of the business, current dividend level should be sustainable.
At today closing price of RM14.64, TTM dividend yield is 0.85/14.64 = 5.8% (ICPS is even higher). As long as dividend is sustainable, current share price from dividend yield perspective is still attractive. Other valuation measures we discussed before like embedded value, P/B and M&A all lead to similar conclusion.
I continue to hold my shares. I focus more on the dividend and will not be too bother with the share price for now.

@dragon328, yes, the changes that Scientex introduced are detrimental to minority shareholders’ interests. Scientex has instructed to stop investor presentation purportedly to let management focus on running the business. However, the true objective is to further reduce interest in Daibochi share as analysts will have to stop their coverage. Scientex wants to put pressure on other major shareholders namely Apollo, Samarang and Public Mutual to sell their stakes in the future privatization attempt.

The RM100 million capacity expansion has mostly completed. FY22 revenue increased about 30% YoY (partly contributed by increased ASP). But utilization is only 60% due to the much-expanded capacity. There is ample room to grow the business in the next few years without heavy CAPEX. With good operating cashflow from this business, helped by the prospect of improved margin (raw material and freight costs are coming down, and there is time lag of passing cost increase to customers), and with greater adoption of sustainable packaging, both margin and free cash flow should improve. I believe the next few years is the harvest season after earlier investment.

While I’m confident on the business, the question is whether Scientex will let Daibochi to share the fruits with shareholders. Note the 30% payout was the previous dividend policy that had been in place for several years already. It was actually scrapped after the failed privatization attempt. At that time I expected Scientex might frustrate minority shareholders by stopping future dividends.

But interestingly Daibochi still announced two distributions after the change in dividend policy. The latest dividend is payable next month. This brings FY22 full year dividend to 5 sen with 38% payout. In this aspect, Scientex’s interest happens to align with other shareholders. Scientex can’t afford too much cash accumulating at Daibochi given it needs to fund other businesses, especially land acquisition for its property division. When Scientex instructs Daibochi to distribute the excess cash, the cash will unfortunately (for Scientex) be distributed to all shareholders proportionately and leaked from its control.

It’s also in Scientex’s interest to let and drive Daibochi management to run the business well. After all, Daibochi results are consolidated under Scientex. Within its various commoditized plastic businesses, it’s Daibochi that offers the greater growth potential due to its unique positioning and portfolio of MNC clients. If Daibochi does not grow, I don’t see how Scientex could achieve its aim of doubling in every 5 years, which it’s struggling to do now.

However, while Scientex wants Daibochi business to do well, I have no illusion that it wants the share price to languish. Anyone holding the share has to be long-term oriented, hoping that the business growth will eventually be reflected in future share price or future privatization offer.

As mentioned before, I only has a small holding in Daibochi, which I acquired at previous downturn and before the privatization attempt. I continue to hold because it offers diversification benefit from a portfolio perspective. Of course, when those funds eventually sell out to Scientex, I will have to follow at whichever price they agree with Scientex. I’ll let them do the worrying. I just tag along.

Despite declaring an interim dividend of 16 sen for the first time recently, the final dividend of 69 sen is still higher than 63 sen in FY21. Full year dividend 85 sen is 35% higher than last year. The dividend yield is 6.1% at today closing price! It's even higher for ICPS. However on the flip side, does it also mean less growth prospect since less capital is needed?

EPS, PE, ROE, all will change with the MFRS17 implementation starting next year. Only the dividend provides a better clue on next year performance.

Just found that it has come to the attention of Minority Shareholder Watch Group. MSWG CEO Devanesan Evanson
has written about it in the latest newsletter --> https://www.mswg.org.my/sites/default/files/2%20December%202022%20MSWG%20Newsletter%20%28final_v2%29.pdf

A virtual AGM will he held next Wed via the Tricor platform. Investors can sign up and put forward questions.

I checked the Apollo Asia Fund (the second largest shareholder) website and found the manager Claire Barnes had shared her view on shakeup of the Board -->
https://www.apolloinvestment.com/F221128.htm

Revenue at RM47m is roughly the same as last quarter and a year ago. This is due to "resheduling delivery of shipment from certain customers". I suspect some of their customers have inventory problem.

Wellcall has also fully impaired its investment in the JV with Trelleborg. This happened after posting 12 quarters of losses probably due to depreciation. I suspect the JV has not generated any revenue.

One good thing is the company returns all unused cash to shareholders. Payout ratio was above 90% for most of the years. It reached 102% in FY21 and 105% in FY22. Current dividend yield is 5.8%.

However the flipside of high payout is limited growth. Excluding the effect of foreign exchange, net profit has been fluctuating in the range of RM30m to RM37m since FY2015.

As CoL has stopped buying, the NAV discount has widened. This is contrary to TTB’s prediction and is common sense.

The evidence can be seen from the Bursa announcements. The last purchase by CoL was on 7 Apr 2022. The NAV on 6 Apr was RM3.36, share closing price RM2.15, implying a 36% discount.
https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3249780
https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3249196

The latest NAV on 23 Nov 2022 was lower at RM3.28. The closing share price was even lower at RM2.00. The NAV discount has widened to 39%.
https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3309148

The small-scale purchase by TTB is rather useless in stopping the discount from further widening.

With no other investors pressing for change, there will be lack of pressure for management to change for the benefit of unit holders. ICAP remains a value trap.

ICAP has just completed its 2022 AGM. Below is the trend on the votes on director's reappointment:

Year For Against
2022 43,756,291 33,170,514
2021 43,623,877 31,099,317
2020 42,332,043 30,267,507
2019 43,829,446 27,963,500
2018 46,261,889 28,389,753
2017 44,554,250 24,832,500
2016 57,089,178 23,646,300
2015 60,198,263 20,281,250

The support for company directors’ reappointment has declined from about 60 million shares in 2015 but has since stabilized at about 44 million shares. The Against vote has increased to 33 million shares in 2022.

As CoL has stopped further share purchase pending ICAP's appeal against High Court's ruling, the Against votes is unlikely climb much further, not until CoL resumes purchase assuming a favorable court outcome.

RCE has a dividend policy of 20% to 40% payout. Despite the increasing payout ratio in the last few years, and in fact payout exceeded 40% in FY22, it has accumulated too much equity capital given the business has been growing quite slowly.
Take for example, over a period of 4.5 years from end Mar 2018 to end Sep 2022, shareholders’ equity has increased 76% from RM519m to RM912m. However total financing receivables only increased 21% from RM1.5b+ to RM1.8b+.
This is probably to motivation to return underutilized shareholder’s equity.
Maybe this is the request from its major shareholder. Still the management deserves praise for being responsible to shareholders.

There is another article about RCE on The Edge Saturday. There are a few key points:
1. Interviewed analysts believed loan loss provisioning due to many civil servants leaving their jobs may have peaked. In fact, provision for the latest quarter has come down.
2. Maybank expects RCE earnings to normalize because 2Q earnings were boosted by early settlement income as customers wanting to lock in lower rates before rates move higher.
3. RHB pointed out that given most of RCE’s funding is on a fixed rate basis, the impact of higher funding rate affects only new sukuk issuance.

It's true that the good results of 1Q21 was skewed by lockdowns in 2020. So a YoY comparison with 2022 may not be appropriate.
NBV for 9M22 is RM208.4m.
9M19 figure was not reported in the quarterly presentation then. I worked backward from 3Q20 presentation which mentions "New business value (for 9M20) was RM 165.9 million, declined by 11.8%."
It means NBV for 9M19 = RM165.9m / (1 - 0.118) = RM188.1m.
The increase over a 3-year period, from 9M19 to 9M22 = 208.4/188.1 - 1 = 10.8%. CAGR is 3.5%.
It's fair to say that ALIM business has recovered back to and above pre-pandemic level. But the growth rate has yet to return to the double digit growth of 2018-19.
Of course, the EV at RM3.6b is larger today than 3 years ago.

@dragon328, thank you for providing the breakdown, and showing the effect of interest rate hike on Wessex Waters.

The Singapore business (now under power generation segment) has shown good results. However I'm less sure about two other items. One is that the telco business continues to bleed. PBT loss was RM84m in current quarter. Anyway the underperfoming telco has been discussed before.

A new concern for me is finance cost has increased from RM240m a year ago to RM332m in the current quarter. Given the amount of borrowing (borrowings on the balance sheet are about RM2.8 billion), a substantial portion of the operating profit has been eaten up by interest payment.

Is the borrowing a bit too much given the rising interest rate? With hindsight should the proceeds from ElectraNet sales be used to pay down borrowing instead of getting into new projects?

Does it also mean the company is unlikely to raise dividend any time soon due to the heavy burden of interest payment?

The general insurance business GWP has registered 12.3% growth for 9M22, versus 10.8% for industry and 20.6% for Takaful (page 19). Given AGIC's dominant position in motor insurance, it has likely benefited from the strong recovery in auto sales this year.

However, the general takaful segment is growing much faster. According to Maybank Q3 presentation (page 49), in the combined market, Maybank Etiqa's share has expanded further to 15.5% whereas AGIC merely maintains at 11.1%
https://www.maybank.com/iwov-resources/documents/pdf/quarterly-report/2022/Maybank-3Q-9M-FY2022-Analyst-Presentation.pdf

AGIC will probably return to slower growth mode in 2023 (after benefiting from the low base effect this year). Hopefully by then ALIM NBV growth could recover to its pre-pandemic pace.

Despite the economic recovery so far, ALIM has yet to resume its NBV growth.

According to page 3 and 21, for 9M22, "New business value was RM208.4 million, decreased by 1.9% due mainly to lower sales volume from agency business". For comparison, before the pandemic NBV grew at 30% in FY19 and 17% in FY18.

https://www.allianz.com.my/content/dam/onemarketing/azmb/wwwallianzcommy/pdf/investor-updates/2022/2022_Q3_AMB_Analyst_Briefing.pdf

I'm not pouring cold water as I like FPI and believe it's well managed. However 3Q is a good quarter for many other companies too. Below are the some of the headlines from today The Edge paper

MSIC 3Q net profit more than doubles ...
Kelington's 3Q net earnings double on healthy order book ...
Dayang Enterprise 3Q net profit surges on increased work orders
SP Setia's 3Q profit surges over six times ...
Mega First posts 34% rise in 3Q profit...
Higher gross profit, finance income lift Gas Malaysia 3Q net profit by 53%

I guess many companies have performed well because of low base effects due to severe lockdown a year ago. The Malaysian GDP grew by 14.2% in this quarter.
The test will come in the next few quarters as successive rate hike amidst high inflation dent the global economy.

Record quarterly revenue and profit.
FPI's revenue is set to exceed 1b in 2022. FPI has been fast growing. Revenue has almost tripled since 2016, and net profit has grown many times over due to improved margin.
However, some caution is warranted given that
1. Traditionally Q3 is a strong quarter anyway (though the pattern failed in 2021, probably due to lockdown effects)
2. Forex gain is a record RM18.3m . After excluding such non-core profit, this is a great but still not a record quarter.
3. What is the market outlook with Europe and probably US too getting into a recession? The management mentions the downward revision to demand outlook

AIA shareholders' equity, EV and NBV are also resilient against swings in equity prices, interest rate and other volatility. It can be found it page 68-70 of its 2022 interim presentation.
https://www.aia.com/content/dam/group-wise/en/docs/investor-relations/2022/AIA%20Group%201H%202022%20Analyst%20Presentation%20Final.pdf

Its disclosure is top notch. I hope Allianz Malaysia will provide greater disclosure too so that investors have better insight and confidence.

AIA has recently reported growth across all segments in Q3. Specifically for Malaysia, "The strong momentum that returned to AIA Singapore and AIA Malaysia in the second quarter continued through the third quarter with both businesses again delivering double-digit VONB growth. In each market, both our Premier Agency and partnership distribution channels grew VONB, supported by our ongoing investments in TDA. In Singapore, an increase in active agent numbers and a more favourable product mix drove growth, while we delivered excellent results from our exclusive partnership with Public Bank Berhad in Malaysia."

Hope this momentum is also shared by Allianz Malaysia.

Yes, I missed out page18. The calculation would have been a lot simpler by just taking the originally stated RM5.09 and add the interest accrued as announced on Oct13.
I'm glad that by posting my calculation it attracted correction. It looks like I can afford to sit on the share a lot longer.

Csan, welcome back. Haha, of all people, you're the one advising others not to be sarcastic? But still I appreciate your earlier warning that the deal may fall through and Litrak may have to dispose at a lower price. Despite the scenario never came true, caution was still warranted.
No, I'm not in denial. What for? Both denial and pride are just unnecessary emotional baggage.

@Dragon328, again appreciate your sharing. It's certainly worth a more in depth look, despite my impression of its controlling shareholder.

Good reminder. Page 19 of the circular has provided the breakdown - RM1.62m for disposal expenses, and RM8m for general corporate expenses.

Page 16 shows the expenses will be be deducted from the originally estimated RM2,731m (now RM2,739m, after extra RM9 or about 2% p.a. interest income as disposal date was delayed for two months)

The company will pay special dividend RM4.57 * 539m shares (as of Jun 30) = RM2,463m

The estimated amount left for final distribution to shareholders (exclude future interest income) = RM2,739m - RM2,463m - RM9.62m (though expenses could be a bit lower if completed earlier) = RM266m

Estimated final distribution per share (before future interest income) = RM266m/ 539m = RM0.49

As for interest income, as mentioned before, it's better to get tax free FD income ourselves instead of Litrak's taxable interest income.

Did I miss something?

Yes, the cash in bank generates interest. So is money parked in FD instead of chasing after Litrak shares. Moreover companies pay 25% corporate tax for their interest income while our own FD interest is tax free.

Even a holding company still incurs expenses. Up to probably a million a year for directors’ remuneration. There is also staff cost, though it could be minimal. They may also engage advisors/ consultants in winding down the company. This overhead has to be spread over a company which is now only a tenth of its previous size. The cash return will be smaller after offsetting the various cost.

This is why I feel that a few percent discount, to be realized within a 12 month period, is merely fair instead of attractive. Any gain in arbitrage has to be measured against the opportunity cost incurred.

@dragon328, thank you for your sharing. Yes I read about your analysis on SEM.

I did follow the share price since the talk about potential sales of Caring. The gradual share price run up over a 3 week duration and the subsequent dumping looks very strange to me.

On the business side, given SEM has 2,400 stores nationwide, it probably take many new 7-cafe to move the needle?

CIMB has downgraded to Hold in anticipation of weaker earning outlook due to weaker consumer sentiment. However Starbucks still plan to open many new stores. What is your view?

You've also deducted payment of lease liabilities RM17.9m before arriving at the final operating cashflow.
However, this item is the "payment of principal portion of lease liabilities". Given it's the principal portion, it's for capital lease where the company could own the asset eventually. Shouldn't principal payment not be deducted in the operating cashflow? (The depreciation of the fixed asset has already been accounted for)

@dragon328, thanks for sharing your calculation. Yes, interest payment RM6.348m should be deducted before arriving at the net cash from operating activities. I missed it.
While most companies assign interest payment under Operating Cashflow, BJFood has parked it under Financing Cashflow. What might be the reason for this discrepancy in practice?

The management talks about rising cost. "The lower pre-tax profit was mainly due to margin compression as a result of the higher operating costs incurred and the weaker Ringgit Malaysia."
Operating margin has indeed declined from 24% in the previous quarter to 19.4%. However after adding back depreciation, the EBITDA margin remains unchanged at 35%.

Cash from operating activities at RM78m will be over RM310m if annualised, close to last year level.
Investment has run up to RM25m in current quarter, including RM5m for JV (Paris Baguette’s?). Annual CAPEX was RM70m in FY22. Assume FY23 CAPEX is RM100m.
Assume the current gearing is already optimal, the free cash will be 310 - 100 = RM210m or 12 sen per share.

However RM33m has been used to pay down borrowing in the current quarter. In FY22 the company paid down RM80m of its borrowing. If we assume another RM80m is paid down in FY23, the free cash after CAPEX and debt repayment will be 310 - 100 - 80 = RM130m, or 7sen per share.

Taking the middle point, free cash will be about 9 to 10 sen per share, still close to 10% yield. Are the assumptions reasonable? Can the current good margin sustain?

According to company announcement on Oct 13, LITRAK Holdings’ portion of total equity holders’ proceeds RM2,739m. After full exercise of ESOS the number of shares will be 538.263m. Value per share = 2,739/538 = RM5.09.

Before today's ex-date, the share price has traded around RM5, which was about 10 sen or 2% discount before transaction cost.

After ex-date the remaining value is about 5.09 - 4.57 = RM0.52. The volume weighted average price up to this moment is about RM0.50, which is about 2sen or 4% discount.

It seems a fair discount. There is little attraction to buy or sell at this price.

However relative to its size, Harta war chest isn't as large as Kossan or Supermax, not to mention Intco, though much better than Top Glove. The management should preserve cash to outlast competitors incase anyone (especially outside Malaysia) engage in a multi-year price war. Moving forward can't expect much dividend. The 60% payout policy is based on earning which will be minimal at best.

The RM1.8b net cash can sustain RM400m+ annual staff cost for 4 years.

Kossan result reminded all on the weak demand and over capacity issue. It brought the recent glove stock rally back to reality. There isn't much surprise left when Harta result is out.
Both Harta and Top Glove are almost certain to be dropped from KLCI. This is a much anticipated event. Let's see what will happen to their share prices when the moment comes.

2Q22 quarterly report mentions decline in sales volume by 27% YoY, and by 33% QoQ.
My own estimated shipment quantity for Q2 is 4.8b to 4.9b. Based on previously mentioned annual capacity of 42.3b (could be lower now as they take out some old capacity), utilisation is only around 46%. However the poor utilisation is kind of expected based on previous management's guidance on market outlook.

I actually still retain a portion, opting to receive special dividend instead of selling the entire holding which incur transaction cost. I just treat the remaining portion as cash, to be deployed if new opportunities arise. I also keep an eye for price after ex date, just in case the price gap becomes attractive.

Natsuko, good sharing. I enjoy reading the entire article.

It's funny to read that "her local colleagues who informed her that neighboring countries Indonesia and Malaysia were burning rain forests to make palm oil." It's funny to know how the story just get twisted from a misguided Singaporean colleague and eventually fit into the anti palm oil stereotype.

But make no mistake. I believe there are real money betting on palm oil replacement. I also believe it can become successful one day.

Applying biotech to change the world is not new. There are companies working on plastic eating microbes, as well as microbes that produce green aviation fuel to combat climate change. I'm quite confident all of them will succeed one day and make the world a better place. The question is how long will it take to scale up to make commercial sense.

I suspect this palm oil alternative, if ever successful, will for a long time remain a niche application, perhaps first used in the most expensive cosmetic which already commands a premium and their customers don't mind overpaying.

But don't expect the mass market Western consumers to pay 10X or even 100X for their environmentally friendly shampoo or chocolate, no matter how environmentally friendly they are. Not to mention most of the palm oils are sold to price conscious developing countries.

I also foresee little impact from the investment point of view. UP is mostly valued as a dividend stock. Applying a dividend discount model, most of its value will be derived from the first 10 or 15 years of dividends, discounted to present value. The synthetic palm oil, if ever successful, will not make a dent on the global palm oil demand for at least the next 20 years.

I would rather pay attention to foreign labor issue, Indonesia export, Ukraine War etc. But interesting story nonetheless.

If interest rate hits 8% the stock market will be decimated.. There will be many stocks selling at 3 times PE or above 10% dividend yields, yet most of us will be too terrified to buy :)

The 25X historical forward PE I mentioned earlier is based on 5 year record. It has been skewed upwards by 2020 bull run. The 10-year mean used by Affin is a better measure.

Affin has a Sell call. Its rationale:

The equity market, which turned bearish in 3Q22, will likely remain subdued in 4Q22 and 2023, as we anticipate more market turmoil and fund redemptions for both bond and equity markets. Our equity and derivatives market assumptions for 2022E/23E/24E as follows: i) equity market ADV at RM2.0bn; and ii) derivatives volume at 17.5m/12.4m/12.4m p.a.

Reieterate SELL, as we maintain our Price Target from RM6.74 to RM5.20, based on a P/E target of 22x (at 10-year mean) on revised 2023E EPS of 23.6 sen

Despite being in a small pond, Bursa is a monopoly which needs little capex and returns >90% of its earnings to shareholders. Its valuation is never cheap.

Historically Bursa's average forward PE is around 25 times. Current forward PE at "only" 22X has offered support.

The share price may tumble if analysts cut earnings, or it suffers a derating, for eaxmple due to
1. a general stock market crash
2. Malaysian economic recession
3. Government imposes capital gain tax for stock trading

They are structured warrants issued by investment banks. They've taken opportunity to cash in on speculators bullish on rising CPO price just a few months ago.

Yes. The distribution has been defined in the circular. By declaring a special dividend of RM4.57, Litrak would have distributed about 90% of the RM5.08 sales proceed within 45 days of completion date. The remaining RM5.08 - RM4.57 = RM0.51 will be distributed within 12 months, plus maybe 1 or 2 sen of accrued interest.

Litrak should not trade above RM5.08 tomorrow. After ex date of 10 Nov, it should not trade above RM0.51.