I posted the above recommendation on 1 Oct to my investment group on 1 Oct when no one want to invest in Astino

Financial

In recent its Q4 announcement for the quarter ended 31 July, the Co reported a revenue of RM127 mil (FY 2020 RM521 mil) with a PBT of RM9.63 mil (FY 2020 RM28.1 mil) and net profit attributable to shareholders of RM 7.3 mil (FY 2020 RM22.3 mil) .

The EPS for Q4 was 2.69 Sen and FY 2020 EPS was 8.2 Sen. The Co also proposed a first and final dividend of 1.5 Sen for shareholder approval at AGM. The dividend yield is 2.5%. The Co has been paying dividend

PERFORMANCE REVIEW

Under difficult MCO environment, for the financial year 2020 (unaudited), the Group achieved higher revenue of RM521 million with a lower profit before tax (“PBT”) of RM28 million as compared to RM584 million turnover and RM32.5 million PBT achieved in Financial Year 2019. The FY 2020 EPS was 8.2 Sen (FY2019 8.7 Sen) and for Q4 the EPS was 2.69 Sen


Cash Flows And Liquidity
The Group’s cash & bank balances had increased by RM44 million to RM65 mil and bank borrowing was decreased by RM8 million to RM66 mil as compared with financial year 2019 mainly due to decreased in inventories of RM37 mil and receivables of RM17 mil as compared with previous financial year.

The operating cash flow from operation amounted to RM72 mil (FY 2019 RM 47 mil)

The Group’s net debt to equity ratio is nil at the end of the current financial year. The Group’s strategy is to maintain a low gearing ratio via strict and cautious control over its capital resources in order to achieve long term business objectives and to maximise shareholders’ value.

Prospect Statement by the Board
The volatile steel price and foreign currency has caused uncertainties in our pricing policies. In this regard, we will continue to closely monitor the changes in steel price in order to ensure that our profit margins are reasonably protected as well as our selling prices remain competitive. Barring any unforeseen circumstances, the Group will continue to strive for a commendable performance to maintain the Group’s competitiveness in the long term.

Brief Company profile

The Group is involved in the manufacturing and sales of metal building materials including metal roofing, c-purlin, small c-purlin, truss and batten, piping, scaffolding, slitting and levelling coil, agro facilities and its related products. The Group consists of ten subsidiaries and one associate company. The Group’s products are sold principally through its network of dealers in Peninsular Malaysia, Sabah and Asia Country. The Group’s products are mostly sold domestically (88%) where exports merely contribute 12% to the Group’s revenue. The Group’s mission is to supply our customers with Top Quality and Innovative Products at reasonable cost, in line with the nation’s aspiration of zero inflation and satisfying customer requirements through personalized, efficient and reliable services, and establishing a mutually rewarding relationship. Thus, the Group has set-up nine manufacturing plants to better service the increasing customer base. The plants are set up strategically at Sungai Bakap, Bukit Beruntung, Melaka and Temerloh to provide services for customer at different locations. The various plants also enable cost savings in transportation, effectively reducing cost of sales.

Company’s Products (Watch Corporate Video for understanding of Co Products)
• Core Roofing Products – Metal Roofing Sheet and Building Products
• Multi Truss and batten
• Agro-House Multi System for Poultry Industry – Plastics Poultry Slab & Ventilation System https://www.astino.com.my/products/astino-agro-house-multi-system/

• Green House System for commercial agriculture https://www.astino.com.my/products/astino-green-house/

• Truss Pallets

• Metal Roofing Sheet and Building Products

Investment Merits – Continuous 20 Years of Profit Track Record since FY2000

• Since its listing in 2000, Astino has always been making profit. From our research based on available records in Bursa, for last 17 years, since FY 2013, Astino has always delivered annual EPS of more than 7.22 Sen (which is the lowest in FY 2015) other than FY 2009 during Global Financial Crisis where the EPS was 7.08 Sen.

• Strong management with good corporate governance

• Strong balance Sheet with good operating cash flow of RM71 mil for FY 2020 (FY 2019 RM47 mil)

• Cash balance of RM65 mil (FY 2019 RM21 mil) which is equivalent to 23 Sen per share

• Net borrowing almost Nil, RM595K


• NTA of RM1.48 (Share price 59 Sen) and management in 2018 guided us that NTA based on revaluation of land and building could easily be more than RM2.00

• Land and buildings and vacant land at 31 July 2019 amounted RM173 mil stated at HISTORICAL COST. Land and building acquired prior to 2008 amounted RM133 mil (Ask yourself what is the valuation today? Price of Industrial Land in Penang had easily increased by more than 150% since 2008).


• Land held for future expansion and investment acquired from 2014 to 2019 amounted to RM40 mil included in above RM173 mil.

• New World class (1,700,000 sq ft) Plant in Changkat in Penang completed in 2018 and poise for expansion


• 9 Manufacturing Plants strategically located in Malaysia – Penang, KL, Malaka & Temerloh

Corporate Video: https://www.youtube.com/watch?v=0iVGt82fNdg

Investment Merits – Continuous 20 Years of Profit Track Record since FY2000and trading at attractive PE of 7.2 with 50% upside

A stock to watch or take position at below 65 Sen level depending on your risk appetite with its 20 years of consistent performance delivering profits. Management’s confidence in its share price is reflected by the continuous share buybacks and purchase of shares by controlling shareholders in recent months.

At 59 Sen, it is trading on an attractive PE 7.2 based on FY 2020 EPS of 8.2 Sen (FY 2019 EPS was 8.71 Sen) despite 2 months of MCO affecting operation and business for FY 2020.

Based on Q4 EPS of 2.69 Sen achieved despite being affected by MCO, we estimated the FY 2021 EPS in the region of 10 Sen to 11 Sen. Using a prudent forward PE 9 to PE 12, its valuation based on 10 Sen EPS, could range from 90 Sen to RM1.20 and based on 11 Sen EPS, its valuation could range from 99 Sen to RM1.32 (using PE 9 and PE 12) respectively.

An attractive Co to buy in before Mr. Market notice it.

It is a very thinly traded share with only 271.9 mil shares issued. The top 30 shareholders hold about 186 mil shares or 68.6%. Do not chase as it would push up the price. Just buy on market weakness and accumulate investment overtime to keep for long term.

Where are all the pro AT writers writing on behalf of operators. I told you from my earlier posting this is goreng on Glove theme and they do not know the glove business. Buy Pearl Glove is like buying a lorry service centre and want to convert to servicing Mercedes and BMW as the profit is far much better due to shotage of servicing centres. Does the PG have the skill set? The major shareholders are Asiabio and are linked back to Fintec. The modes operadi is to goreng up the shares Asiabio invested in like Focus Dynamic, Vsolar and other listed Co in so at qtr end Fintec can report the fair value gain from original cost of investment. Retail investors are taken for a ride

How could a Co doing salary cut across all manager level from 10% to 30% and head count cut be doing well. Co is fighting for survival

Texchem is goreng.

This Singapore Kia Calvin Tan is misleading the Market and simply said Texchem got 10 Factories can ramp up chemical production for Glove Co and other glove manufacturers. Texchem has only 1 small chemical manufacturing factory in Butterworth producing chemical and solvent. The others are injection moulding and thermal forming factories. For the face shiled thermal forming PPE, ask yourself how extensively is it being used in the market and there are few hundreds thermal forming Co who also can produce it. This shield no need FDA APPROVAL OR Medical Certification to produced

For sanitiser, Engkah is also producing it and market is flooded with every tom dick and harry doing it from my discussion with Engkah CEO not much profit. I was telling Engkah boss, this qtr your result would be fantastic for him and he toned down my expectation.

As the for the glover material from my communication with my Luxchem source and another big chemical supplier to all glove CO, zest of it summarised below

My communication with an industrial supply market leaders

Mr Tan, good evening
Do you know that we declined the audit of Top Glove?!
Top Glove is the worst glove customer that we have. We almost wanted to tell them we want to stop supply to them! There is absolutely no credential to quote TG as your customer
Texchem still do not know TG yet.
Cleaning chemicals are just simple things and no rocket science to produce it.
They employed one guy from TG about 2 years ago, with the hope of entering glove industry

More than 20 years ago, Texchem used to the leader of chemicals and nitrile for glove industry. Texchem is nowhere to be seen in the glove industry, Luchem and many others had taken over its position. The Co even lost the agency of a surfactant from USA

Cleaning chemicals and release agent are very competitive, with something like 10 to 15 competitors who have been supplying to the glove industry for more than 20 years
What makes Texchem think that they can squeeze in?
Anyway, I wish them all the very best.

Restaurant Business

Calvin Tan has ignored the huge potential losses coming form it Sushi King and Hosino Coffee Outlets

The MCO from April to early May will cripple the restaurant business with 1.5 mths of heavy losses for Q2 30 June. The subsequent new ruling of social distancing could easily reduce sales by 50% easily. Ask any F&B operator or talk to Shopping mall manager, can you make profit with the social distancing seating arrangement.

In Q1 2020, the peak qtr for the Restaurant reported revenue of RM57.6 mil with LBT of RM6.258 mil loss (Q4 2019 Revenue RM 76.4 mil and PBT 271K and Q1 2019 with Revenue of RM77.9 mil with RM3.315 mil profit ).

If you analyse the Restaurant Segment, profit had been declining over the recent 3 years. I am not surprise to see Q1 loss of RM6.258 mil being occurring in Q2.

If you analyse Texchem without looking at all the 4 divisions, then I will lose respect for the analyst or is the analyst being paid to write about little positive development without seeing the damage of a bigger picture

If you are in for goreng, good luck till the Q2 come out end of July if previous timing is adhered to.

Calvin Tan, Buying Texchem is like buying Supermax at at 1.73. Are you joking and on what basis? You have to look at all the 4 divisions to analayse techem

There is no publicly available information on its prospect to justify RM2 billion valuation and and its current business will never quantum leap in top and bottom line . The share price is high as it could be a cornered shares. Operators are churning the shares volume from left to right pockets with high volume.

Why raise capital thru PP again when Fintec can unlock its investment in Focus which is valued at about RM 279 mil. As shareholders we should question the Board

Interested parties are the one who pushed the shares of Focus and churning it from left to right pockets to push it up. In March when the Market collapse, it defied gravity and went up and closed 31 Mar 2020 at 68 Sen compared to 31 March 2019 of 13.5 Sen . This generate the fair value gain of RM 242 mil gain reported in the Q4 FY 2019 account. Fintec two other listed co investment AT and Vsolar were in paper loss position at 31 March.

Focus is another Malaysia Boleh Co. At RM1.01 the market capitalization of RM2.065 billion. It has poor financial performance for both the top and bottom line in the last 5 Financial Years.

The net asset or total equity of the Co as at 31 March 2020 was RM41.5 mil though its paid up share capital was RM86.97 mil. The CO has accumulated losses incurred since its listing of RM46.8 mil. Surprisingly, the share price kept creeping up dubiously. Howe could the market so illogically valued it at RM2.065 bil compared to its net asset of RM41.5 mil.

Poor investors could get burn to ashes when reality check come and noted its financial cannot justify the share price. Price being goreng up and cornered by the main players with self interest could only explained the illogical price of RM1.01

I am amazed Focus is valued at RM2.065 bil. I noted the key shareholder is Fintec with 25.3 %. Studying list of 30 top shareholders and changes in substantial shareholders noted most shares are all held thru Credit Suisse Dublin and HK plus other reputable overseas Nominees without naming the beneficiaries to let the market think big names are holding the shares.

I WONDER WHY WOULD INTERNATIONAL INVESTORS WOULD WANT TO INVEST IN SUCH POOR FINANCIAL CO. I think this is certainly unlikely but most probably proxies of interested parties or operators who has interest in pushing its share price up and misleading the market with international names buying the shares.

From the 31 Dec 2019 Annual Report, it turnover was RM39 mil and reported a net loss of RM1.89 mil. Look at the financial summary below for the last 5 financial years and note that except for FY 2017, the Co reported losses for last 5 Financial years from 2015 and turnover for the Co has been less than RM39 mil.

Review the Q1 31 March 2002, the Group’s revenue decreased marginally from RM9.95 million in corresponding quarter of last year to RM9.28 million in the current quarter, representing a decrease of RM0.67 million or 6.72%. When compared to the preceding Q4, the Group registered a decrease in revenue to RM9.28 million from RM9.95 million in the preceding quarter, representing a decrease of 6.72% or RM0.67 million. The Group registered a PAT of RM0.75 million as compared to LAT of 3.03 million in the preceding quarter due to impairment loss of financial assets of RM2.16 million, Interest of Right of Use Assets (“RUA”) of RM0.56 million and depreciation of RUA of RM1.30 million during the quarter with the adoption of MFRS 16 for FYE 31 December 2019.

The question investor got to ask is the Co worth RM2.065 bil. The share price is 1.01 and for FY 2019 and 2018, it reported loss earning per share of 0.09 Sen and 0.16 Sen respectively. Q1 2020 earning per share 0.04 Sen

Focus shares transaction to me it is not Credit Suisse buying the shares but clients who open accounts with Credit Suisse overseas. It can be anyone or operators doing it to impresse investors. A lot of investors being misled that Credit Susse a big name is buying Sharesd

This is another Malaysia Boleh Co. At RM1.01 the market capitalization of RM2.065 billion. It has poor financial performance for both the top and bottom line in the last 5 Financial Years.

The net asset or total equity of the Co as at 31 March 2020 was RM41.5 mil though its paid up share capital was RM86.97 mil. The CO has accumulated losses incurred since its listing of RM46.8 mil. Surprisingly, the share price kept creeping up dubiously. Howe could the market so illogically valued it at RM2.065 bil compared to its net asset of RM41.5 mil.

Poor investors could get burn to ashes when reality check come and noted its financial cannot justify the share price. Price being goreng up and cornered by the main players with self interest could only explained the illogical price of RM1.01

I am amazed Focus is valued at RM2.065 bil. I noted the key shareholder is Fintec with 25.3 %. Studying list of 30 top shareholders and changes in substantial shareholders noted most shares are all held thru Credit Suisse Dublin and HK plus other reputable overseas Nominees without naming the beneficiaries to let the market think big names are holding the shares.

I WONDER WHY WOULD INTERNATIONAL INVESTORS WOULD WANT TO INVEST IN SUCH POOR FINANCIAL CO. I think this is certainly unlikely but most probably proxies of interested parties or operators who has interest in pushing its share price up and misleading the market with international names buying the shares.

From the 31 Dec 2019 Annual Report, it turnover was RM39 mil and reported a net loss of RM1.89 mil. Look at the financial summary below for the last 5 financial years and note that except for FY 2017, the Co reported losses for last 5 Financial years from 2015 and turnover for the Co has been less than RM39 mil.

Review the Q1 31 March 2002, the Group’s revenue decreased marginally from RM9.95 million in corresponding quarter of last year to RM9.28 million in the current quarter, representing a decrease of RM0.67 million or 6.72%. When compared to the preceding Q4, the Group registered a decrease in revenue to RM9.28 million from RM9.95 million in the preceding quarter, representing a decrease of 6.72% or RM0.67 million. The Group registered a PAT of RM0.75 million as compared to LAT of 3.03 million in the preceding quarter due to impairment loss of financial assets of RM2.16 million, Interest of Right of Use Assets (“RUA”) of RM0.56 million and depreciation of RUA of RM1.30 million during the quarter with the adoption of MFRS 16 for FYE 31 December 2019.

The question investor got to ask is the Co worth RM2.065 bil. The share price is 1.01 and for FY 2019 and 2018, it reported loss earning per share of 0.09 Sen and 0.16 Sen respectively. Q1 2020 earning per share 0.04 Sen

It is not Credit Suisse buying the shares but clients who open accounts with Credit Suisse overseas. It can be anyone or operators doing it to impresse investors

Fintec hold shares in AT, Vsolar and Focus Dynamics. Every Qtr end and Year end 31 March push the share price up to take up the fair vaule gain. All NTA a bit Doggy .

How could Focus.Dynamic Market Cap RM1.7 BIL. when NTA is only RM38 mil. I was puzzled that Focus Dynamic market capitalisation is RM1.47 bi given it total equity or net asset is ONLY RM38.7 mil. It just do not make sense to me. The Co also do not own any unique intellectual property or patent of value to commercialise it based on 31 Dec 2019 balance sheet (its FY is 31 Dec and Annual Report is still O/S) It had been making losses since 2014 based on FY 2018 Annual report.

Comment by Glove Industry with operational experience


It takes minimum 6 months to fabricate and commission a new line. Thereafter 2 months for 1 line. This depends on the fabricator.
Registering with FDA takes anything from 6 to 12 months.
This AT Systemization is definitely looking into suckering public money. Not advisable to purchase the shares 1 line costs about RM 4 million now, with output at around 30 000 pieces per hour.
They have no experience in this glove industry. And the people in Pearl Glove do not have any experience in manufacturing medical gloves, although the GM, in his early days worked as a chemist in an MNC which produced medical gloves, but NR gloves, not NBR gloves. Technically AT or Pearl Gloves simply do not have the technical capability to produce NBR medical gloves.
Ask your fellow investors to give this a miss.

Pearl Glove had been making losses for years except for FY 2018, it made a profit of RM282k. The networth of the Co based on audited account to 31 Dec 2018 was RM1.2 mil. AT is going to paid RM20 mil and my fellow investors here said worth RM100 mil.

This is one of the few Co had done 3 Private placements and 2 Right Issue exercise since FY 2016 and still cannot turnaround the Co into profitable position.

Far too many Issue of Shares thru Private Placements (PP) in small quantity and the two Right Issues in recent years with no positive impact on the result due to poor execution. This also reflect on the inability of the Co to raise finance thru the banking system due to probably unfavourable credit rating by banks otherwise you would not raise small amount by PP.

Recently the Co just completed it Right issue exercise on 22 May and raised RM34.7 mil for the purposed stated attached.

The Co share price from 13 April to 22 May on completion of the right issue was from 4 Sen to 5 Sen.

The share price started to trend up after completion of the right issue on 22 May to a high of 19 Sen in 11 June before retracing to 8 Sen on 26 June and closed at 11 Sen.

The announcement of acquiring Pearl Glove and venturing into medical glove industry to me is just another THEMATIC PLAY to GORENG up the share price. Investors need to ask the following questions on the press release on acquisition of Pearl Glove dated 26 June and get convince before you take position, otherwise sell your AT and take profit

1. Has AT turnaround to be profitable? No. I believe it will be reporting a loss for Q4 31 March.

2. Any positive development in AT business generating quantum leap in profit causing its share price to move up from 4 Sen in April to 19 Sen and now at 11 Sen? No

3. Has AT got the cash fund to acquire Pear Glove (manufacturing of industrial glove)? No from the Co Balance Sheet at 31 Dec 2019.

4. Will the Co bankers finance the acquisition? The answer is NO as it is equity financing and there is no visible take off cash inflow for repayment.

The current AT Balance Sheet is already stretched without the right issue and the Co had to do 3 small quantum of PP and 2 right issues within the last 4 years since 2016 make me conclude that AT had hard time raising banking facilities then.

5. Can the Co use the right issued fund for acquisition? No unless it goes back to the authority to change the purpose of utilisation which do not goes well with SC

6. Does it make business sense to acquire an industrial glove player and gradually convert to medical glove business? No business sense as industrial glove player do not have the skill set for manufacturing medical glove which is completely different industry

7. From KLSE Screener: ATS estimated it would require RM180mil for the expansion.
"As a start, the Group intends to allocate approximately RM36mil to install and commission a total of 4 new production lines for the manufacture of medical grade nitrile examination within the next 4 months upon completion of the acquisition," it said. The four new lines will have a capacity to produce 600 million pieces a year.

Can you commission a medical glove production line in 4 mths? Guarantee NO.
It could take 6 mths to 9 mths to set up a line with trial run to commission it. The Co also need Medical Certification Approval after commissioning of production. The Audit by Sirim or International Certifying Body may take 2 to 3 mths to qualify.

8. It would take more than 1 years before u can see medical glove coming out from Pearl Glove “oven” and by then Covid 19 could be over.

9. AT said the expansion plans will be funded via a combination of internal generated funds, bank borrowings and/or fund raising exercises to be determined.
I do not see the Co has internal fund to stomach the acquisition. Bank WILL CERTAINLY RELUCTANT to lend to finance the acquisition. Do not tell me AT is going for another round of right issue or PP??????

I will not buy into AT and be a sucker unless I am in AT just for the Goreng Goreng and play with the market operators.

If I am holding AT, I will take my profit by selling AT

Pearl Glove is just manufacturing Industrial Glove and not medical glove, how and and what basis you can valued it at RM100 mil by to of above contributors. Would the vendors of Pearl Glove sell a Co for RM20 mil when it is worth RM100 mil?

The issue we have is that the Auditors signed off the Audited Account on 30 April without any red flag and the auditors would have got the management and the Board of Directors to represent and confirm that subsequent to the financial year end at 31 Dec 2019 to 30 April 2020( the date of Auditors Report), there is no material information or adverse business development affecting the audited account which may affect Auditors opinion and make changes to the Account.

15 Days later on 15 May the Board issued Q1 2020 Qtrly announcement with RM11.6 million. impairment

Did the Board of Directors hide impairment information from the Auditors? Perhaps hearing explanation from the Audit Committee Chairman may enlighten us.

We should held the Board of Directors for lack of Corporate Governance .

All shareholders should go to Co website and sound this issue to the Co

Go to Minority Shareholders Watch Group

Use the online complaint form and filled in you complaint

https://mswg.org.my/complaint

PBT exclude the impairment is RM500k and not RM4 mil

Krono

Out of the blue made impairment of RM11.6 mil on PPE on the EDM Managed Service. Adjusting back the impairment of RM11.6 mil, its core profit before tax is only RM511K compared the corresponding Q1 2019 of RM4.015 mil and that of the preceding Q4 2019 of RM5.112 mil.

Though a good business model, the management has never delivered the profit expected for the amount of capital employed.

The share price had continuously being played up before qtr announcement and then reported a poor result and share price went south after the qtr result.

MAIN CONCERN
I also have issue that the Auditor issued a clean report dated 30 April a clean unqualified report or expressing any reservation on valuation of PPE and 15 days later on 15 May, the Board issued a qtrly report with impairment of RM10.8 mil on PPE.

We shall hold the Auditors PKF Charted Accountant responsible if there is any audit procedure falling short or shoddy auditing work.

Either the Board of Directors looks bad in not disclosing all material subsequent events or negative development that affect the PPE that may warrant an impairment in the FY 2019 Account or the Auditors' work had been shoddy. Is the Audit Committee of the Co sleeping on this issue of concern

Those who had lost money when share price nose-dive in Krono who had used the Annual Report as a basis for judgment may want to consider avenue to sue the Board or the Auditors.

PLEASE WRITE AS MANY COMPLAINTS TO SECURITY COMISSION and AUDIT OVERSIGHT BOARD TO INVESTIGATE THIS SHORT COMINGS.

I WILL CERTAINLY FILE COMPLAIN TO THE AUDIT OVERSIGHT BOARD TO INVESTIGATE THE MATTER AND ALSO THE SC

I do not hold any Krono share

"CEO" mean behind the scene pulling the puppet string with so much vested in the Co do not know what is going in the Co. KYY just a top 30 shareholders also have access to info per his write up

Cautious on over valuation

SELL HIGH IF YOU CONCUR WITH ME

I noted the disposal of 2.3 mil shares in the open market by owner Dato Lau Eng Guan on 30 April and 6 May at the price of RM1.40 for 1 mil shares and RM1.60 for 1.3 mil shares respectively.

From 8 May to 12 May, Dato Lau sold 670K shares as follows:
8 May sold 250k shares at RM1.65
12 Mar sold 250k shares at RM1.93
12 May sold 100k shares at RM2.02
12 May sold 70k shares at RM2.14


The DISPOSAL COULD reflect the fair value price of Comfort share to Dato Lau.

As a substantial shareholder and Director, Dato Lau has within 3 market days after the dealing has occurred to give notice of his dealings in writing to the company secretary and the company must immediately announce such notice to the Exchange. Below are the summary of the announcements.

On 14 May announced that on
7 May sold 500,000 shares at RM1.60

On 13 May announced that on
6 May sold 500,000 shares at RM1.60
6 May sold 800,000 shares at RM1.63625

On 6 May announced that on
30 April sold 1,000,000 shares at RM1.4038


Since 6 May closing price of 163 (3 market days passed by), the operators had pushed the share price to a high of 275 and spiral down to 221 closing on 13 May with a 19.6% drop. 14 May closing was 238 after it nose dived to a low of 119.

IMHO, Dato Lau was unlikely or could not be wrong to sell Comfort shares at RM1.40 to RM2.14 as the “CEO”, he knows the business prospects and projected profit based on operating full capacity of all plants.

The above recent disposals of shares by owner Dato Lau in open market in my humble opinion could reflect market price being more than fair valued at 160 then. From 8 May to 12 May DS Lau sold another 670k shares show above.

The CFO is financially acute to sell 77.4k shares at RM2.60 on 13 May

Market could have wrongly priced Comfort shares and had probably misled by operators pushing the share price up daily with current “GLOVE THEME PLAY”

Fantastic result for Q4. Share price should rise with its improvement in performance with FY 2019 EPS of 39.9 Sen compared to FY 2018 of 32.05 Sen, an increase of 24.5%

For the quarter ended 31 Dec 2019 (4Q19), the Group registered a revenue of RM231.6 million and a net profit of RM18.7 mil (EPS 11.2 Sen) as compared to RM219 million and RM17.7 mil (EPS 13.37 Sen) respectively recorded in the corresponding quarter of 2018 (4Q18). Though higher net profit for FY 2019 but EPS is lower due to conversion of warrant resulting in dilution.

FY 2019 the company recorded sales of RM935 mil and a net profit of RM63.9 mil compared to FY 2018 of RM862 mil and RM45.3 mil with an improvement of 8.46% and 41% respectively despite a non-operating share option expense of RM2.8 mil incurred in FY 2019.

Valuation of RM4.75 to RM5.69 is based on PE 10 to 12 using the projected FY 2020 EPS 47.45 Sen. At this valuation range, using historical FY 2019 EPS 39.91 Sen its PE range is from 11.9 to 14.25

Current Share Price at 411 is trading at an attractive historical PE 10.3 based on FY 2019 EPS of 39.91 Sen and its dividend yield is 2.19 given a proposed dividend of 9 Sen

Compared to its smaller peer SLP which is trading at 108 with FY 2019 EPS of 6.69 Sen is trading at PE 16.25 with a dividend yield of 4.17%

Genetec expect price gap up for a fantastic Q3 result with Q3 EPS 20 Sen and 9 mth YTD EPS of 18.1 Sen

Valuation of RM2 to RM2.50 with PE range of 8 to 10.

Genetec is due for rerating given its improvement in top and bottom line in Q3 and also its recent announcement on 4 Feb 2020 on securing new orders of RM38.5 mil for its new financial year ended 31 March 2021.

At 163 Sen, it is currently trading on historical PE 11.8 based on FY 2019 EPS of 13.82 Sen and forward PE 6.52 using a projected EPS 25 Sen for FY2020. Based on our projected FY 2020 EPS of 25 Sen ( 9 mth YTD EPS is 18.1 Sen) , using PE 8 to 12 would give GENETEC a valuation range of RM2.00 to RM2.50.

For 9 mth YTD FY 2020 the Co recorded a revenue of RM72 mil (9 mth YTD FY 2019 RM82.8 mil) and a net profit of RM7.3 mil (9 mth YTD FY 2019 RM9.7 mil) with an EPS of 18.1 Sen (FY 2019 23.45 Sen).

Note that in FY 2019, there was an impairment of RM5 mil goodwill written off in Q4 FY 2019 turning it into a net loss after tax of RM 3.7 mil for Q4 and FY 2019 result with a lower profit of RM6 mil with EPS 13.82 Sen


REVIEW OF PERFORMANCE

For the current quarter Q3 ended 31 December 2019, the Group recorded a revenue of RM40.1 million, an increase of 16.2% or RM5.6 million as compared to a revenue of RM34.5 million recorded in the preceding corresponding quarter ended 31 December 2018.

The Group recorded a net profit before tax of RM8.1 million (NPAT RM8.1 mil with EPS of 20 Sen) for the current quarter under review as compared to a net profit before tax of RM5.0 million (NPAT RM5.0 mil with EPS of 12.4 Sen) in the preceding corresponding quarter ended 31 December 2018.The increase in net profit before tax was mainly attributable to higher sales volume achieved and improved operational efficiency.

Vincent Tang, Your Sifu just do not understand the business and the business model of the Co and its core competency. He also asked his followers when Dufu was 140 in 2018 to sell as no prospect below 75 MA line, sell down occured. I was telling the world to buy at RM1.10 region, the share went up to RM4. Tguan still go leg to go

Tguan (21 Nov 2019)

Investment merits
Vision to be RM1 billion enterprise is achievable and will attract institutional investors in due course with a premium valuation.

Sustainable 4 qtrs of net profit after tax with ongoing expansion over the last 18 mths

Rolling 4 qtrs to 30 Sept 2019 PBT, Net Profit, EPS are RM77.285 mil, RM62.906 and 42.08 Sen respectively and share price now 315

In its previous glory day back in 2017 for the qtr ended 30 Sept 2017 Rolling 4 qtrs PBT, Net Profit, EPS are RM69.621 mil, RM58.142 and 33.51 Sen respectively and share price then was 424 at 30 Nov 2017. From 30 Aug 2017 to 30 Nov 2017 the closing share price range 418 to 424.

With current rolling 4 qtrs net profit of RM69.621 mil and EPS of 33.51 Sen to 30 Sept 2019 compared to the LOWER 4 rolling qtrs to 30 Sept 2017 with net profit of RM58.142 mil and diluted EPS of 33.51,
MR MARKET WILL WAKE UP TO ITS UNDERVALUATION AND RM4 will be there shortly if Mr Market study history of its share price

Penta current price 450

My 2 sen opinion Penta at 450 is overvalued. My valuation based on PE 15 is only 251 and PE 20 is 335.I will never give Penta PE 20.

For a Co with net profit after tax for the last 4 rolling qtrs with profit after tax ranging from RM29 mil to RM33.6 mil with EPS range of 3.6 Sen to 4.52 Sen where the growth in EPS does not deserve a PE 20.

LAST 3 QTRs net profit is almost constant and does not warrant high PE 20 as we do not expect exponential growth given last 3 qtr are stagnent

The EPS is determine using profit attributable to shareholders ( which is net profit less non-controlling interest that is minority share of profit)The profit attributable to shareholders for last 4 qtrs range from RM18.3 mil to RM21.8 mil. EPS range from 3.6 Sen to 4.52 Sen.

Note that included in the profit till Sept is an interest income of RM7.6 mil. Thus, core business profit is much lower by RM7.6 mil

You do not give PE 20 to interest income
Even with PE20 its valuation is 335..

My projection for Penta FY 2019 EPS is about 16.75 Sen. I incline to conclude Q4 top and bottom line will be lower than that of Q3 given the closing inventory of RM78.7 mil is the lowest for the last 2.5 years when I compared to all quarters.

In this nature of business , a decline in inventory, is an indication next qtr sales not so good. I have monitor Penta for more than 4 years. Low inventory mean low wip of incomplete equipment in progress for next qtr.

Just ask yourself if the Co can earn 16.75 Sen per year do you want to pay RM4.50 for?
It takes 26.9 years to pay back. I will sell at 450

Penta has been played up by operator and do not deserve so high a valuation

My view could be different from other IB Analysis and only time will tell

Not reporting the mthly production figure is is a negative step backward and lacking transparency. For good corporate practice and investor update, the Co should seriously consider continuing current mthly reporting. Not reporting it could mean the management is hiding information of production and could subject to manipilation of production quantities as the Co has 3 mths to manage the qty to report.

I am no an expert to comment on share price movement.Let us see the coming Q1 result in late Aug and Q2 in late Nov and by then we could already have clear indication of BV deliveries in profit

Do not be concerned with the mth to mth fluctuation in output given operation is running smoothly. I am not aware of any major issue arising from my source. Including the updates presentation to Institution funds on 2 July in KL. The Co is only processing the top layer of soil at the moment and when they hit the rock or oxide soil, the gold content will be much higher. Generally. in open pit mine in most gold mining area the top soil gold content is low and not feasible to mine. However, in BV the gold content is high and economically feasible to mine. The story I heard was when Optiro (Gelogist) was initially engaged for preliminary survey few years ago (prior to the official appointment to survey the Wullersdorf 28 Hectares of land out of total acreage of 306 Hectares), Optiro was shocked at the low-hanging fruit of gold available in Muntri Hill, Tawau. The current gold output at top soil proved Optiro initial findings.

Mining top soil has its problem when torrential heavy rain occurred continuously for few days, will result in poor access road condition hindering logistics movement and excavation of the soil. Processing also slow down as earth turned into sludge though modification to the processing had been improved. Also bear in mind, in gold mining you cannot have consistent mthly output like a manufacturing operation. If you excavate the earth with higher gold content during the mth, the gold production output will be higher.

Let me throw this vision I have of BV getting a JV partner with an established gold mining Co with expertise and capital to mine it a more aggressive extraction on a profit-sharing arrangement. If I am Datuk Lo, I will seriously think of this strategy. No additional risk of extensive investment in Capex on PPE, BV profit will quantum leapt. What would be the profit generated???. I would say sky is the limit. Datuk Lo is already 62 and I am sure he is a man hurry though the lease period is 34 years to go.

Let us as investor be patience with the management as they are also going thru a learning curve to achieve its corporate vision.

If you are in BV for its gold mining potential and holding for 3 mths to 6 mths time frame, I believe current entry price is ideal.

BV would probably be reporting corporate record PBT for coming Q1 FY 2020 ending 30 June given aggregate April and May gold production was already 131.1 Kg.

Last AQ4 for 150Kg sales Co had reported a revenue of RM26.9 mil with PBT of RM11.3 mil and profit after tax profit of RM9.5 mil when gold price was hovering around less than USD 1300 per ounce or RM171.3K per Kg at exchange rate 4.11.

Current qtr the gold price for last 2 mths average about USD1,400 per ounce which is equivalent of RM185K per Kg. Given April and May sales of 131.1 Kg, the sales revenue for the 2 mths April and May would be RM24.25 mil. If June min production is 50Kg, the additional revenue would be another RM9.25 mil. Gold sales revenue could be RM33.5 mil.

I am not saying June production is 50Kg, it could also be 70Kg to 80Kg from previous mths track record of productions.. If above 70Kg, it would be a bonanza in profit. Do your own logical analysis either to buy or sell.

Bahvest – Recommended Buy if below 65

Though on TA, support at 65.5 was breached. Next support level is 60.5. I believe it is the operators washing it down to pick it cheap before the next announcement of gold production out.

Why let the operators push it down. TH is not selling cheap. My source told me certain investors offered to take over TH remaining shares but TH want above 70 Sen then.

Is there any negative news in the market? No
Is gold price holding? Yes at USD 1,296 per ounce
Is the gold production increasing trend Yes
Proven delivery of increasing monthly gold production since August 2018. Monthly gold production outputs:
Aug. 6.406 kg
Sept 23.69 kg
Oct. 12.96 kg
Nov. 21.58 kg
Dec. 31.52 kg
Jan 19 41.23 kg
Feb 19 61.38 kg

For March 2019 output, market is expecting the output to be above Feb output of 61.38kg. Any shortfall below market expectation, BV share price will be punished.

Monthly output production ups and down makes the market isn’t it?

As long as the production don’t have hiccup and teething problem, I am happy.

Don’t expect the figure to double every month it is not realistic
BV started at a very low base. Currently plant running at 80% capacity.


We also have to understand,BV is dealing with natural resources unlike factory production where mth to mth is consistent but in gold mining mth to mth may fluctuates.

Just buy and keep wait for it to explode like Dufu when time is right.

Review of 9 mths YTD FY 2019 vs 9 mths YTD FY 2018 (9 months period ended 30 Sept)
For the YTD 31 Dec FY 2019, the Group recorded a revenue of RM82.8 mil compared to RM72.0 mil for YTD FY 2018, which is an increase of 15%. Gross profit margin has increased to 21.3% compared to 18.4% for 2018.

The Group recorded a net tax (PAT after Non-controlling interest) of RM9.426 mil for the YTD FY 2019 as compared to RM3.702 mil in the corresponding 9 mths for period ended 31 Dec 2018, an increase of 255. The increase in profit was mainly attributable to improved operational efficiency. Refer to Excel Table Attached.

REVIEW OF PERFORMANCE Q3

For the current quarter ended 31 December 2018, the Group recorded a revenue of RM34.5 million, an increase of 25.5% or RM7.0 million as compared to a revenue of RM27.5 million recorded in the preceding corresponding quarter ended 31 December 2017. The Group recorded a net profit before tax of RM5.1 million for the current quarter under review as compared to a net profit before tax of RM3.7 million in the preceding corresponding quarter ended 31 December 2017.The increase in net profit before tax was mainly due to higher sales volume achieved and improved operational efficiency.

Genetec has a strong balance sheet with a nil net gearing. Its current assets is RM73.7 mil compared to current liabilities of RM 26.1mil. Its Share Capital is RM62.2 mil making up of 40.2 mil shares with a net asset of 191 Sen per share.

GENETEC – Target price 256 to 284 based on estimated FY 2019 EPS of 28.45 Sen (YTD FY 2019 EPS 23.26 Sen) using PE range 9 to 10.

Fantastic corporate profit record for Q3 with a net profit of RM4.991 mil (with EPS 12.42 Sen) attributable to shareholders and 9 mths YTD net profit of RM 9.346 mil (with EPS 23.26 Sen) A dividend of 2.5 Sen was declared making YTD interim dividend in total of 5 Sen,

Target price 256 to 284 based on estimated FY 2019 EPS of 28.45 Sen (YTD FY 2019 EPS 23.26 Sen) using PE range 9 to 10. I am expecting Q4 to be moderate as the Directors of the Group anticipate that the Group will achieve satisfactory performance for the remaining quarter.

The Company has announced yesterday it has secured contracts of RM46.1 mil comprising RM32.5 for automotive and RM 13.5 for Semicon, electronic and HDD for FY 2020 , see attached announcement. Market talk is another contract of RM40 mil could be finalised in due course.

I have stated in my earlier posting
You cannot judge Genetic performance Q on Q as its business model involved design (for acceptance by customers), construction and installation of industrial system and equipment for its clients in HDD and Automotive industries which take 6 to 12 mths from design to completion and billing.

Agred with Tracy Lim. below is what I posted on my analysis in my investment group

BAHVEST Why PANIC and LET OPERATORS RUN YOU DOWN

• Proven delivery of increasing monthly gold production since August 2018. Monthly gold production outputs:
Aug. 6.406 kg
Sept 23.69 kg
Oct. 12.96 kg
Nov. 21.58 kg
Dec. 31.52 kg
Jan 19 41.23 kg
Feb 19 61.38 kg

In Feb, we have Chinese New Year break and the key people are not around and Co may not be operating 28 Days but churning out 61.4 kg of gold.

I took the worst scenario and tweak my estimate and calculations to a lower average monthly production of 70 kg of gold for my FY 2020 31 March projection below:

1. 70 kg of gold with an annual output of 720kg for FY 2020.

2. Production capacity increased by 50% from 1 Oct 2020.

a. April 19 to Sept 19 production of gold =70kg X 6 = 420Kg,
b. Oct 19 to March 2020 production of gold = 105 X 6 = 630KG
c. Thus, with increased in production capacity by 50%, the output 1,050kg for FY 2020

My valuation of BV with the worst scenario using Feb 19 production as base and assuming the plant capacity expansion is implemented on 1 October 2019, with an annual gold production of 1,050kg is target price of 93 Sen to 124 Sen using PE 15 to 20

In an unlikely scenario of no increase in capacity the TP range from 55 to 74

Recommendation BUY

I wrote the report, sorry to mention that Cash Only copy from one of the telegram group which I had posted my recommendation on 15 March 10 am before share price run up from 67 7072 and close at 71

Barring any unforeseen circumstances, we are optimistic that the strong earnings trend will be sustainable,
premised on our fairly sizable order book of RM3 billion to last us at least until 2023. Notwithstanding the
volatility in oil price, we remain upbeat on the company’s future prospects as Dayang has emerged stronger
after going through one of the most challenging period over the past few years. We are confident that our
balance sheet will continue to be strengthened as the impressive financial performance in 2018 has clearly
demonstrated.
After securing a larger portion of the Pan MCM contracts estimated at RM1.5-2.0 billion from multiple
production sharing contractors in Malaysia this year, Dayang has also started to look at international
expansion to further grow the company.
In November 2018, Dayang together with Gujurly Inzener, its local partner in Turkmenistan, via a joint
venture company, were awarded a contract for the provision of facilities maintenance support for Petronas
Carigali (Turkmenistan) Sdn Bhd. The value of this contract which is estimated to be around USD100 million
covers a three-year period effective from 01 January 2019 to 2021 (with an option to extend for a further
period of one year). This contract is expected to contribute positively to Dayang’s profitability.
As for our subsidiary Perdana Petroleum Berhad (PPB), the proposed debt restructuring scheme with the
financial institutions under the Corporate Debt Restructuring Committee (CDRC) of Bank Negara Malaysia is
still in progress. Once this restructuring is finalised, PPB and Dayang Group should emerge stronger than
before. We are hopeful that Dayang will return to its glorious days in the not-too-distant future as we
carefully execute our long-term business plans. The Board will remain vigilant and continue to exercise due
care and prudence in the running and administration of the company’s business.

Prospects
We are proud to deliver our highest-ever quarterly revenue in the fourth quarter of 2018 which is typically a
seasonally weak quarter due to the monsoon weather. However, for this current quarter, offshore activities
were ramped up and works continued to be issued to us under time write (unit rates) and lump sum work
orders. This remarkable achievement came on the back of the robust work orders issued for the PCSB
Maintenance, Construction and Modifications Contract (MCM) and Topside Maintenance Services works
under the Pan Hook-up and Commissioning Contract (Pan HUC) as well as the newly minted Pan MCM
Contracts which were rolled out in the fourth quarter.
As a result of the strong operational performance in the fourth quarter of 2018, Dayang has also recorded one
of the highest quarterly profit after tax in our history. This is largely attributable to better cost control,
improved efficiency and streamlined project management. It is also evidently positive that vessel utilisation
came in stronger at 73%in the fourth quarter, compared to a utilisation rate of 51% for the fourth quarter a
year ago. Our fleet utilisation has been gradually improving since the first quarter of 2018 when it was as low
as 27%. We are particularly delighted to note that the synergistic collaboration between Dayang and its
subsidiary, Perdana Petroleum has indeed worked out satisfactorily and this should reinforce our position to
be the leading integrated MCM player.

Dayang Valuation TP 198 to 222

Has the business environment which Dayang operates turn negative? Certainly no.

In a recent briefings to Institution fund managers two weeks ago, the management was very positive on its prospect going forward to sustain it current profit level.

The panic sell down is the 2 adverse IB reports by Kananga and HLB causing panic. Margin call on accounts also compounded the waterfall.

Look at prospect going forward represented by management in Q4 31 Dec 2018 below

I would take the latest 3 qtrs average adjusted EPS of 6.18 Sen represent its core profit after add or less non-recurring income and expenses. Last 3 qtrs adjusted EPS 18.54 Sen. Avg EPS per qtr 6.18 Sen.

FY 2019 projected is EPS 24.72 Sen. Using PE 8 to 9 my valuation of Dayang is 198 to 222.

BUY – TP 82 to 110 (with expansion of 50% plant capacity by 1 October 2019) using PE 15


Target Price 82 to 110. TP @15 x PE on PAT at RM66.4 mil (if no increase in plant capacity) to RM89.9 mil (with expansion of plant by 50% capacity commencing 1 Oct 2019) based on FY 31 March 2020 estimated EPS.

I am using only monthly average 80.4 kg gold output to project the income to support 82 Sen TP and with expansion to commission on 1 st Oct 2019 my output is avg 100.5kg per mth to TP 110.

Bahvest production output

Aug. 6.406 kg
Sept 23.69 kg
Oct. 12.96 kg
Nov. 21.58 kg
Dec. 31.52 kg

31.52 kg of gold translate to 1013.3 troy ounce and @USD1,280 per ounce at exchange rate 4.1, the value of sale would be RM5.318 mil per month. The monthly mine operating cost is about RM2.5 mil to RM3 mil per last qtr report..

COMFORT (TP 103 to 124 based on FY 2019 EPS of 6.9 Sen with PE range 15 to 18

I look at the results Q2 FY2019 released. Acknowledged that the result of Comfort could have been better for Q2 if not for the following non-recurring expenses

1. Share based payment RM1,524,000

2. Non-recurring one off logistics expenses RM4,400,000

The expenses is probably relating to shipments being held in US in March 2018, when the products had technical issues with US FDA for compliance which had been resolved but would have affected April sales to US.

Given that the Co had faced the impasse on the technical compliance requirements of FDA of US in March 2019 and resolved it satisfactorily, going forward we would expect shipments to normalise and sales to increase.

Another key factor is the weakening of RM against USD from 1 July of 4.05793 to 4.13993 on 30 Sept, with an average rate of 4.09893 during this period compared to average rate of 3.96129 in Q2, an increase of 3.5% would increase Comfort profit margin

I am projecting FY 2019 EPS to be around 6.9 Sen compared to FY 2018 of 6.43 Sen. Thus my valuation of Comfort using FY 2019 EPS of 6.9 Sen (1h 2019 my adjusted EPS is 2.9 Sen) with PE of 15 to 18 would range from 103 to 124. You may have to wait for next Q3 results for market to realise my valuation.

For the quarter Q2 2018, the Group recorded revenue of RM 760.0 mil, more than 70% increase from its revenue of RM 446.0 mil in the corresponding quarter last year. This had contributed to the Group recording a healthy net profit after Non-Controlling Interests of RM 21.0 mil (with EPS of 2.72 Sen) from RM 6.9 mil (with EPS of 0.9 Sen) in the corresponding quarter in 2017.


For the 1st half Year 2018, the Group recorded revenue of RM 1,553 mil, about 204% increase from its revenue of RM 763 mil in the corresponding 1st Half last year 2017. The Group recording a healthy net profit after Non-Controlling Interests of RM 50.3 mil (with EPS of 6.5 Sen) from RM 16.4 mil (with EPS of 2.12 Sen) in the corresponding 1st Half year in 2017, a jump of 306%.

Gross profit margin in Q2 has improved to 11.24% compared to 10.61% in Q1, however when compared to FY 2017 of 12.43%, it is lower due to weaker RM vs USD resulting in an exchange loss of RM6 mil for Q2 and RM5.5 mil for 1st Half 2018. I reviewed the core Oil and Gas profit before interest, before share of results of Associates and JV entities and exceptional income and expenses, its core profit for Oil and Gas has improved from Q4 2017 of RM34.4 mil to RM37.2 in Q2 2018.

When compared Q2 2018 profit before tax against Q1 2018, Q2 PBT has dropped from RM35.9 mil to RM28.9 mil. However take note that there is profit on disposal of PPE of RM8 mil in Q1 and Q2 Profit on disposal of PPE is RM1 mil. If you adjust the gain on disposal of PPE out, core profit before tax has remained the same at for both quarters at RM 27.9 mil despite Q2 suffering Forex Loss of RM 6 mil.