I have never hold any stock for more than 5 years . My CAGR ( Capital gain +dividend ) since 1998 is 18 % . The best stock I have ever invested is supermx which give me 5x return from 2009 till 2011. Others like Elsolf , Inari , WCT, Pbank ,Airasia ,Kossan ,Coastal, TSH and KM Loong also gave me fairly good return . Dividend gave about 3 to 4 % annual return . The rest comes mainly from capital appreciation . Hope Henyuan will be the next 2 or 3 bagger for me .

I mean double digit annual compounded growth

Many stocks in KLSE have delivered double digit growth if you had hold it long term when you buy these stocks at low PE ( below 10 and preferably below 5 if you can get it ) . THe stocks must have growth too be it organic growth of 5 to 10 % per year or those with high growth. Good examples are Glove makers like Top Glove , Hartalega, Kossan , Supermx and Semicon stocks like Elsoft, Inari , Vitrox, Panamy , JHM , Penta . With current advanced information technology , it is getting more and more difficult to get such stocks with low PE and you are early birds . Can Hengyuan be one of the rare one with PE below 5 at current price assuming Q3 and Q4 eps at more than 100 sen ?

Plantations stocks are cyclical stocks . The earnings depends very much on prices of palm oils .However ,the market prices of most of the plantations stocks has grown 5x to 10 x compared with before year 2000. The semiconductors stocks are also cyclical stocks . Looks at those stocks which are connected with semicon business like Vitrox, Inari, Globetronics , Elsoft , JHM, KESMI ,Penta , MMSV. The stock prices has grown a few x comparing with prices just a year ago . Even if you consider PetDag , Petronm and Hengyuan as cyclical stocks although it is not that cyclical , PetDag has consistently deliver growing EPS for more than 15 years . One key point to note is the devaluation of our Ringgit which has benefited those counters which export products like Gloves , Semicon, Furniture . Since crack spread is also quoted in US dollars .In my opinion, the 20 % lower Ringgit since 2014 has also benefited PetDag , Petronm and Hengyuan when you convert the US $ margin into Ringgit . This is my macro view .

If Q3 17 result show a predicted 100 sen eps , then it is the first time Hengyuan/Shell deliver 4 consecutive profits since 2008. This will be an important milestone . The total eps for the 4 consecutive qtrs will be 290 sen . Assuming a reasonable PE of 5 ,then the price should be around RM 14.5 . If Q4 is also profitable , then it will be 5 consecutive months of profits . During the golden period of shell in 2007/08 when it deliver 6 consecutive qtrs of profits , a PE of 6 was given to Shell when the rolling 4 qtr profits was around 200 sen and the market price of 12.00 .

If you look at the 10 years quarterly results for PetDag , Petronm and Hengyuan , PetDag has performed very consistently and never lost money in any single quarter . The EPS has been growing consistently organically .PetDag has also been paying dividend consistently . Such company deserve to have a PE of more than 20 . Petron is very similar to Shell/Hengyuan with very inconsistent quaterly result in the last 10 years . Since Esso changed to Petron more than 3 years ago , it has been making profit consistently for the last 10 quarters although it has yet to prove that their P &L can be as consistent as PetDag.
I think Petron deserve a PE of 10 to 12 with its last 10 months consistent performance . As for Hengyuan ,it has never shown consecutively for 4 qtrs of profit since 2008. If the coming 3rd quarter result show profit which I am quite sure it will , this will be the first time Shell/Hengyuan has shown profits for 4 quarters consecutively since 2008. For such performance , I think a PE of 5 to 8 is reasonable . For Hengyuan to deserve a PE of more than 10 , it has to show at least 8 quarters of profits consecutively. With proper hedging strategy and the oil trends , I believe Hengyuan will be able to achieve that .

Profit is a function of

Product margin ( crack spread ) , yield , manufacturing cost , tax rate , inventory gain ( if oil prices are trending upwards ) or inventory loss ( if oil prices are trending downwards ) . As long as the CEO and the management teams are the same peoples , the above variables will not be different even though it is not 100 % owned by a single shareholder . What has changed comparing 2014, 2015,2016 with 2017 ? Oil prices was on downward trend since 2014 and stopped at middle of 2017. There will be inventory gain if oil prices keep going up . Crack spread has been much better since 2nd half of 2017 The management team has also changed I supposed when Hengyuan acquired the majoirity stake .

First I must express my thanks to the stock market gurus OTB, Stockraider, Icon 888, Davidlim and others who had shared valuable information about Hengyuan . I and my family members had been buying HRC since August 2017. The business and market information plus valuations of HRC and oil refinery business from these gurus had enabled us to make a good judgements to buy into this stock . Our purchase has earned 34 % within 3 months . Thanks again to the sifus who talked with facts amd figures .

Penta also did not give dividend for the last 9 years but its share price has gone up for more than 10 x in the last 3 years when its eps improved every year since the last 3 years

The Devil is in the details . Great analysis

I started buying Airasia when I saw the article from ICON 888 last year .
I bought at RM 1.73 . I think Airasia ia a great company with a lot of potential for future expansion . For a world number 1 low cost airline which receive 8 best low cost airline award consecutively , the PE of less than 8 at current price is a steal . Besides ,its load factors are mproving .the oil prices has stabilised at about US 50 per barrel and the Ringgit is strengthening from RM 4.5 to 4.3 . All these are positive factors for Airasia. I am adding more Airasia stock in my portfolio .

mkh result was out . Lower revenue and profit compared with last year corresponding qtr but higher revenue and profit compared with preceeding qtr , Unbilled property sales also lower at 600 plus millions compared with 700 plus million last qtr .

will MKH result be were out today ? Hope the result will be good since the average CPO price for Jan,Feb and March 17 were higher than the average for last 3 months of 2016 .

Thank you Icon888. I bought AA after reading your analysis about a year ago . I have been investing in stock market for the last 20 years and I found many good analysts in i3 .