WTK LOG & PALM OIL HARVEST

DESCRIPTIONS APRIL-JUNE 2013 APRIL-JUNE 2014 REMARKS
Timber (MT) 107,648 114,570 Increase by 6.43%
FFB (MT) 2,883 4,992 Increase by 73.1%

Log prices have increased by 10-15% due to export ban by Myanmar since 1st April, 2014. WTK 2nd quarter earning is looking good.

up_up_up, thank you for pointing out the mistakes. Yes, the directors (affected persons) who notify the Exchange of their “INTENTION TO DEAL DURING CLOSED PERIOD” not necessarily intend to buy more shares. It can be cases where the affected persons intended to dispose of part of his holdings too, e.g. Notion & YFG.

Such announcement does not indicate a buy or a sell by the affected persons. A buy or a sell can only be confirmed in the subsequent announcements of “DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS):DEALINGS OUTSIDE CLOSED PERIOD” and “CHANGES IN DIRECTOR’S INTEREST”. Of course, if you want to have a quick answer, you can always check with the company Investor Relation Department.

Hi KC & ccs999,

Please find below what I understand about “INTENTION TO DEAL DURING CLOSED PERIOD”.

1. The announcement of “INTENTION TO DEAL DURING CLOSED PERIOD” is only made upon request by the buyers who are normally the directors of the company.

2. This announcement contains basic information such as the buyers’ names & their present holding. In this case, the buyers are Dr. Chiu Hong Keong, Khoo Yok Kee & Chiu Wei Wen and their respective holdings are revealed.

3. This announcement is to inform the present shareholders (retailers, local & foreign institutions) that the said directors are keen to purchase the shares they do not own not via open market. Shareholders who intend to dispose of their holdings via this approach shall notify the buyers (in this case the directors) of the number of shares and the offered prices. The concept of willing buyer-willing seller is applied. Note: The directors may receive offers with varying prices. The prices the directors pay for each dealing could differ from one to another, largely dependent on price action at the date the offer is made.

4. If there is a deal, two(2) separate subsequent announcements would be made in the Bursa, i.e. (i) The announcement of “DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS):DEALINGS OUTSIDE CLOSED PERIOD”; and (ii) The announcement of “CHANGES IN DIRECTOR’S INTEREST”. The former would disseminate the information of the dealings, i.e. the number of shares purchased and the agreed purchased price. The latter would show changes in the director’s holding post-closed dealing.

5. The primary purpose of this “Dealing during Closed Period” is to minimise the price action during the trading hours (in the open market). Another advantage is that both parties do not require to pay the brokerage fees.

6. The announcement of “INTENTION TO DEAL DURING CLOSED PERIOD” can appear several times if the directors have still not received any offers or they intend to purchase more via this method, e.g. Unisem.

7. Normally, the announcement of “INTENTION TO DEAL DURING CLOSED PERIOD” will only be made when the directors perceive the stocks as undervalued and intend to buy more from the existing shareholders. Prices are normally uptrending after such announcement, e.g. Unisem, Notion & Digistar.

8. Hope the above helps. Happy trading!

Uncle Koon, it is okay for me. When I re-visited the questions I posed, I’m all but agreeing with you that they were a bit silly. I was asking too much as if you owed me a favour. Having said that, I encourage you to continue to write.

Hi Uncle Koon, thank you for posting the above article.

Works completed in accordance with technical/employers’ requirements are imperative or resources would be unnecessarily spent on rectifying the defects. Since the India Project was the 19th plant constructed by Mudajaya, I can safely assume that the delay was not due to the technical defects/failures.

Your comment of 03-07-2014 has undoubtedly helped to restore its share price to where it was. Your direct access to the insider information has benefitted us immensely – thank you Uncle Koon.

You have elaborated that the India plants are able to provide estimated recurring profits of RM70mil for 25 years. Mudajaya’s Anto Joseph has on 23-06-2014 confirmed your statement, he told The Edge that the India power plant is expected to contribute between RM60mil and RM80mil to its bottom line from 2015/16. Now my question to you – Is this profit before or after tax? Do Mudajaya require to pay taxes in India, Malaysia?

Mudajaya’s Ng Ying Loong told a press 7 years ago or so that he saw the India Power Plant as a stepping stone to securing more projects in India. But has this taken place?

Infrastructures are booming in this country. The Government are really spending serious money for the MRT, power plants, highways, etc. Why Mudajaya have failed to replenish its book order? Recent letdown for Mudajaya was losing out the co-generation power plant civil works tender (RM300m-400m) for Rapid. CIMB Research House have on 28-05-2014 reported that the group are no longer keen on pursuing the RM500m civil works for Track 3A. Kidex is unlikely to materialise anytime soon. No news on Track 3B power plant civil works is causing a lot of concerns for investor. Uncle Koon, can you please shed some light on this "depleting book order" problem?

I appreciate your comments. Thanks.

Johnny Cash, this is not mudamati, this is tuagagal

What the hell is happening here? Why huge drop?

No free lunch in this world. I'm RM1.5k poorer after getting enticed by the free warrants. Lesson learnt: Never ever trust China companies.

Ebenezer, where did you get the above analysis, from which source?

Say an investor purchased 10k shares of xinquan at RM0.960 pre-free-warrant periods. After the ex-date, he will receive 5k free shares of xinquan-wa. Let's see how his investment has performed:

Pre Ex-date for free warrants
10k shares Xinquan @ 0.96, i.e. RM9,600.00
Investment Cost: RM9,600.00

Post Ex-date for free warrants (based on today values)
10k shares Xinquan @ 0.760, i.e. RM7,600.00
5k shares Xinquan-wa @ 0.17, i.e. RM850.00
Net value for his investment in Xinquan now is at RM8,450.00

Hence, the losses resulted is RM1,150.00 or 12%.

cpng, I need to correct your sentence. It is not LPPL, it is clearly worse than that. But I refuse to blame anyone for the losses I have incurred. Take the above as a paid lesson.

When to sell a stock? Adopt the following tried and tested strategies.

1. Sell when the stock is overvalued, i.e. the price exceeds its intrinsic value. Ptaras have an intrinsic value of RM6.50, which is worked out with conservative variables by kcchongnz, see this thread http://klse.i3investor.com/blogs/kcchongnz/54146.jsp.

2. Sell when the fundamental of the stock has deteriorated. Ptaras’ book order as of today is RM330mil. Had Ptaras not added another RM330mil to its book order in the next 1 year from today, its intrinsic value should be adjusted accordingly. If the stock price at that point of time is still undervalued, then hold Ptaras. If the stock price is otherwise overvalued, then sell.

3. Sell when the management actions are misaligned investors’ liking. Ptaras have recently cashed out of one of their three investments. Vast amount of cash may spur the management to make poor decision instead of making prudent investment. It would be interesting to know how the cash is spent. If the cash on hand is spent to fund expansion, investors would be happy to hold.

The above strategy is elaborated in this video. http://www.youtube.com/watch?v=UVG1FUHGIpM

ASB ceased to be substantial shareholder. http://www.theedgemalaysia.com/business-news/296999-amanaraya-trustees-ceases-to-be-ytl-powers-substantial-shareholder.html

Guys, our kcchongnz would soon be conducting an investment course via internet. A golden chance to sharpen your stock pick skills. Many have benefitted immensely from kcchongnz. I'll be participating, and hopefully I would one day be able to contribute to i3investor. For more details, please see this thread http://klse.i3investor.com/blogs/kcchongnz/55070.jsp

KC, thanks for the reply. One more question, I’m interested to know how to spread your portfolio? Say your fund is RM1mil and you are buying into 10 stocks. Do you put 100k into each stock?

Clearly your investment strategy is able to consistently yield the impressive return. That cannot be due to luck or coincidences.

After “trips” to your postings, many would naturally be feeling inspired to learn more, and I think this is just scratching the surface. Be that as it may, it really changes the way we are doing things now.

I’m determined to make sure that all the pieces are there and all the engines are firing in the right direction. I look forward to participating your investment course this July.

KC, like others, I read the above with interest. I have a few questions.

(1) The magic formula suggests that a portfolio should exclude utility and financial stocks. Can you please share with us the reasons why the magic formula is not applicable to these stocks?

(2) The performance of your portfolio is indeed impressive – Congrats! Do you follow the “Greenblatt’s ritual” in investing, i.e. accumulate 2-3 positions per month over a 12-month period, re-balance your portfolio once per year, selling losers one week before the year-mark and winners one week after the year mark, etc.?

(3) What is the maximum level of debt in the balance sheet that is considered comfortable to investors?

(4) As per your description, the Earnings Yield = EBIT / Enterprise Value. Is the EY equivalent to the inverse of the P/E ratio? Please advise.

If our investment decision is heavily dependent on recommendations by research houses, then we should not confine our reading to reports put up by Hong Leong Bank only.

Let's take a peek at the following salient points raised by CIMB recently.

(1) Jtiasa share price has run ahead of fundamentals.

(2) Jtiasa's FFB yields achieved at its estates have been consistently below
CIMB forecasts in the past five quarters, leading to weaker-than-expected
plantation earnings. Hence, there are lots of concerns about this trend.

(3) The average 15% OER rate achieved at its palm oil mills are consistently
below the industry average of 20%. This continues to depress its CPO yield
achievement and profitability of its estates compared to its peers.

The above is enough to paint the picture how the company is being run. I'm not buying into this stock as a result.

Mlax, you can expect to receive the free warrants this Monday, 8.30am.

The price action really provokes retailers into selling. Patience is the key for this stock.

Ptaras is on runaway success! RHB intensifies coverage. http://klse.i3investor.com/servlets/staticfile/242837.jsp

Mr Koon, thank you for your response.

As I mentioned in the above, the corruption in the construction industry in Malaysia is not uncommon. We grew up in this environment, and many accepted the fact that this is not going to change anytime soon. To survive in such culture, many took short-cuts and resorted to this practise.

Clearly you have not committed that in the past, or it would have come back to haunt you.

WHISTLEBLOWER PROTECTION ACT 2010 was introduced in Malaysia to combat corruption and other wrongdoings by encouraging and facilitating disclosures of improper conduct in the public and private sector, and to protect whistleblowers from detrimental actions, i.e. actions causing injury, intimidation or harassment, interference with the lawful employment of any person, including discrimination, demotion, suspension, disadvantage, termination or adverse treatment in relation to a person’s employment.

Many are not willing to blow the whistle this because they are worried of the consequences. We often hear that the whistle blowers end up being harassed, and fired (may be on trumped-up charges).

To blow the whistle, ones must first collect enough evidence of the problem they are trying to expose, build support among colleagues and others, remain anonymous, and report to the enforcing Authority.

Now my question to you Mr. Koon – have you ever blown the whistle during your tenure in IJM & Mudajaya? I’d glad if you can share this with us.

In Malaysia, reciprocal actions in the construction industry are not uncommon. These actions can be construed as helping each other and giving each other advantages.

In some extreme cases, it morphs into uncontrolled situations. For example, a consultant and a contractor work closely to “deceive” the Client. Consultant put up an evaluation report to convince the Client to award a project to the contractor the Consultant has favoured. Upon receipt of the LOA, the Consultant may make a request for a commission from the contractor. To fulfill this request, the bottom line (profit) of the project will be affected. This may prompt Contractor to induce the Consultant to allow the use of substandard construction materials in the project, to verify claims although works were done in shoddy manner, to sign off T&C functional checklist although the completed projects have failed during the inspection, to fabricate “Variation Orders” for a scope of works already stipulated inside the contract, etc.

Now my question to you Mr. Koon – have ever done the above during your time in IJM & Mudajaya? Please be very frank. Thanks.

Kcchongnz, I have yesterday sent an email to you with regards to the investment course you conduct. I have still not received your reply. Did i send to the correct email address ckc14invest@gmail.com? Please advise.

Shocking revelation by stkoay. Next time we buy when he called for a sell.!

The power plant is expected to make profit contribution to Mudajaya to the tune of some RM60~80mil per year upon the full commissioning of the power plant. This amount is equivalent to EPS of RM0.125/share. This is significant given that this contribution would continue for a period of 25 years.

Thanks kcchongnz, please provide your email address. I'll be in contact with you. Thanks.

I would like to share with you a true story that took place 40 years ago or so. A shoemaker ventured into a tin mining business. This shoemaker had the required financial capacity to undertake this new business. The consultant reports showed that this was a sure-make money venture. This poor shoemaker had no knowledge about mining, completely relying on his managers and workers to carry out day-to-day operations. Losses were recorded in the first year operation. And this continued in the second year. Into the third year, the shoemaker reminded himself that this tin mining business was not sustainable and decided to put the mining area for sales. Surprisingly, the buyer was the shoemaker’s manager who handled the mining activities over the years. This manager was able to rake in handsome profits as soon as the first month of operation! In the past, this manager used the resources his boss provided to pave the way for this future. When he discovered the areas with high tin density, he put a mark on it, and moved on to other areas doing the same. That was why he became instant millionaires immediately after he purchased the mining rights from his ex-boss.

That is why I hate companies venturing into businesses they do not know.

Hi kcchongnz,

I totally agree with you that what is prescribed in the text book is not practical in real life, i.e. seeing/making a trip to the companies we want to invest in would not come to fruition. Even if the management is willing to meet up, they may just talk the things we want to listen, growth stories may be fabricated to entice us, which is very dangerous. We may have already put in a small amount of money into the company. After the meeting, we may decide to buy the story and put in a larger amount of money. As an analogy, we were trapped in a small pit, we jumped out from this small pit, and ended in a deeper pit.

Relying on annual reports is one of the realistic ways to make an investment decision. Declaration of dividends is an endorsement that they actually make money. Good management would only do things that they are good at. I prefer to companies that are growing organically. Any acquisition (in organic growth) should be at least 60% similar to the businesses they are now running. Recent news on water company Salcon venturing into Broadband, citing the needs for diversifications. Broadband and water works have zero similarity. If I have owned Salcon shares, I would have run away upon hearing this news.

My personal experience in corporate world taught me many things. A crook will always remain as a crook. They are not going to repent even you have given them another 10 years to do so. Yes, we can only trust those with good track record!

Hi kcchongnz. You have rightly pointed out that many retailers are ignorant of investing – that include myself. I have started to appreciate “value investing”, and the trading experiences you have been sharing with us in the i3investor have benefitted many immensely – thank you. Learning this isn’t easy, and, for me, that is a long way from here. I’m determined to pick up the knowledge at my own pace.

Like many forumers, I read your above posting with interest. Can you further describe the metrics of price-earnings growth, price-to-sales and price-to-CFFO? How to derive these metrics? What are their purpose/significance?

Calvintaneng, please do not turn i3iinvestor into a casino. Enough is enough. Do you know who is Mr Koon? Please go google to find out more information about Mr Koon. I'm thrown when you extended an invitation for this bet-who-will-win contest. Be real, kid! This is not a circus.

Keep mulpha out of this thread. Only comments on plantations stocks are welcome. The property upcycle has already ended. Create another blog to discuss property stocks.

The above table was produced by RHB Investment Bank's Alvin Tai & Hor Lee Leng.

If RHB Research House is so bullish on Jtiasa, then the next pertinent question is why RHB has issued the call warrant Jtiasa-cb at this juncture? To allow retailers to make handsome money by buying into Jtiasa-cb?

A smart investment bank (I think RHB is smart enough) would only issue call warrants when they are confident that the mother share price would not get any higher in the next 1 year. I'm sure those who have bet on call-warrants before would admit that they would eventually lose their pants because their bets in the long run are always reduced to zero value (toilet paper).

Please use some commonsense. Before RHB Investment Bank issued the Jtiasa-cb, they have already done their homework so that they can win big. Don't get trapped.

Mr Koon, as what is always underscored by Professor Glen Arnold, the investible companies shall have solid growth prospect, no question, Jtiasa clearly are able to meet this investment criteria. In addition, Prof. Arnold also places an equal emphasis on the management quality, i.e. companies must be operated by honest and competent people.

Unfortunately, Jtiasa have been consistently unable to translate the projections on paper into realised quarterly earning results. Persistently poor OERs since their venture into plantation are a serious matter. Is it due to poor management? Or is the missing OERs transferred to private pockets? Jtiasa is being run by Sin Chew family, and their integrity is always questioned in the street. This noise is too loud to be ignored.

You have attended Jtiasa AGM, and met with the company top guns. Are you able to smell something? Please advise.

Tanco NTA is RM0.5783/share. Average losses per year is RM0.05/share. The net value is huge, i.e. RM0.5783/share. But this value leaks out at the worrying rate of RM0.05/share. This means the NTA of RM0.5783/share will be completely depleted in the next 11.5 years. Do you think the company can be turned around? Be real! No way it can turn around given that it is still being run by a bunch of idiots. If they can turn around, they should have already done that! The property upcycle has already ended.

Just ask yourself, have you ever travelled with AAX before? If you did, then the next pertinent question is how frequent? Is it as frequent as you have been travelling with airasia? If you were to go for a holiday, do you prefer short distance (China & ASEAN?) or long haul(Australia, Europe, Japan, Korea)? Most people go for budget travelling. Do you think the budget travellers can afford for Australia, Europe, Japan, Korea? You cannot therefore compare Airasia and AAX. The two are different animals. The room for growth AAX is somewhat limited. In addition, AAX would feel the brunt as fuel was a significant cost component. Every US$1.00 increase in the crude oil will result in RM20mil increase in their operating cost per annum. Forget the airlines counters.

Ptaras has legs! All time high and the uptrend is intact!

Thanks lawrencelim for the thread for the above news.

Uncle Koon, for god sake, please retract this article. As you can see in the above comments, the forumers are damning one another. What is the purpose of posting your articles in the i3investor? I seriously think thar nothing can be achieved here, more harms will be created.

Well said kukuman. We cannot keep complaining this and that. We are living in this country, and must thrive to understand the context and its limitations. For example, if you were born in a poor family, you want to complain you don't get this and that? Try to learn to accept the reality and endeavour ways to improve yourself.

Congrats smartly

http://m.youtube.com/watch?v=0iF8KsNDUO8

Ytlpower back off of Project 4A is Mudajaya's gain? Anyone can share some thoughts on this please?

Confirmed! Ytlpower backs out of the Project 4A! Mampus, lari.....http://www.theedgemalaysia.com/business-news/294992-flash-ytl-power-backs-out-of-johor-rm3b-project-4a-power-project-.html

YTL Power’s downside risk increases after staying below the 50-day MAV line. Traders may liquidate if the stock stays below MYR1.50, while supports are anticipated at MYR1.40 and MYR1.35. The stock’s inability to stay below MYR1.50 may reverse the weakness, while an upward bias can only be taken seriously upon a close above MYR1.65.

Source: RHB 18/06/2014

BFM89.9 just reported that the withdrawal is on the card, thus paving way for open tender. If you noticed, nobody come to defend ytlpower.

Of course, ytlpower would not want to withdraw from the Project 4A, given that they put in lots of energy to secure this deal. However, those who were left out or those unable to get a slice of the cakes would not sit still. They will go all out to use the Tnb unions, the oppositions as the platforms to pressure the government to back track and adopt the open tender. Please use some common sense to make your own judgement.

Calvin, this one how many bagger?

Calvin, luckily I saw your comments if not I would have followed the emotion by selling ytlpower. Thanks.

YTL Power board to meet today, and likely to withdraw from Track 4A power deal - http://www.themalaysianinsider.com/malaysia/article/ytl-power-board-to-meet-today-discuss-track-4a-power-deal#sthash.bYkUMcmR.dpuf

There is a short supply in this industry, i.e. piling contractors are presently overwhelmed with jobs thanks to the massive spending on infrastructure works by the Government. The BFM89.9 this morning interviewed Econpile Holdings Bhd's Raymond Pang. Insights/prospects for the piling works in Malaysia were discussed at length. http://www.bfm.my/breakfast-grille-raymond-pang-econpile.html