@abangmisai - expanded earnings should comes in by 2Q. OCK has been a laggard. Should wake up by 2H17.

TQ sifus for unselfish sharing.

free warrant was given 1 free warrant for 2 shares if I remember correctly.

For Bornoil to go to a higher level, need to beef up their IR or provide clearer direction, although, credit must be given when they make an effort to explain its various activities in the Annual Report.

For investors to understand better, perhaps, explaining sample of biz model for mining of gold & limestone, or even how market value "gold stock" based on its reserve, production capacity/utilisation and inventory. There are not many listed mining counters to compare with in Malaysia.

Gold inventory remains high at 48,918 oz or about RM250m.

Pre Bonus sold at RM2.90 + sell foc warrant (half) RM0.24 + Dividend RM0.07= RM3.21
Now buy at RM1.11 (or RM2.78 pre bonus/warrants/div). He made 43 sen or 15% per share (assuming the amount he sold is equivalent what he buy back), in a couple of months, not bad.

Perhaps, he is trying to tell, Gadang may be getting new contracts soon? The number he buys back at the moment is small (<5%) vs amount he sold.

8 out of 11 contractors for MRT1 were awarded the viaduct contracts. 3 more contractors yet to get it, you guess it right, Gadang is one of them. Hmmm....... Will one MRT2 contract better than Kwasa Land, Puchong Land, Damansara Perdana & Solar energy contracts? Apparently yes.

How much does AAC contributes last 3 years?

Kwan Food investing on RM150m plant (a bit of delay - norm). Need to know the payback period for this type of biz. All depends on utilisation rate, demand, margin & productivity. If we assume 5 years payback (which is good), then, it will gave a average return of about RM30m. Plus the earnings from the existing biz, you can calculate projected PE, can compare with competitors.

1. Bornoil is traded at about RM500m @ 17 sen.
2. Liquid assets = Net cash (52m) and gold inventory in Dec 2016 (261m) = RM310m.
3. Trade price/market cap - liquid assets = RM290m
4. Question is how much is being generated for the net price you pay, RM290m from the LIMESTONE MINING, GOLD MINING + FOOD FRANCHISING BIZ (Co has invested RM100m in LIMESTONE biz (Jan 2017), RM120m in GOLD MINING biz (2016) and >10 years of biz in Sugar Bun.
5. Second, the company can always reinvest its liquid assets of RM310m into some other biz, and how much can it generate? Plans are not clear at the moment on how to use the liquid assets.
6. Earnings will come in slowly in 2017. More in 2018. And more if they invest remaining liquid assets wisely.

RHB TP105, UOBKH TP100-134

March 2016 - 18,900 oz
Dec 2016 - 48,900 oz

Within 9 months, GOLD inventory increased 30,000 oz or equivalent to about RM170 million. Not sure if we can find many company with market cap of RM500m, can increase RM170m in gold inventory.

overbought at the moment based on RSI.

The company is trading at RM518m. If we cash out the GOLD inventory (261m) plus net cash (51), what you paid for the company is about RM200m, for its GOLD mining, LIMESTONE mining, and FOOD FRANCHISING biz.

The last I recall, they have invested about RM120m in gold exploration, development and working capital and about RM118m in LIMESTONE biz lease, which the return is yet to be realised, and an established FRANCHISE biz with turnover of RM100m. Making an assumption of 7 years pay back period, I believe the LT stabilised earning yield is not too bad.

exactly

MD mentioned results will be better than previous year - good news. Myanmar and Vietnam will bring in additional RM110 m revenue, in time to take over Cambodia biz. First have of 2017 will see great improvements in earnings.

Lately, the warrants volume up >18m, normally 1-2m. Hmmm.... I wonder who is coming in. Welcome aboard. A bit of trading won't harm.

@weiii, Telecom mast operator Indus Towers today said it has achieved a tenancy ratio of over 2, which means the company now has an average of two operators per site across its portfolio. ... Tenancy ratio refers to the number of tenants (operators) who have put up their antennae and other active infrastructure on the towers.

SmartInvestors@ attended the AGM and its management mentioned competition from China, long term investors should monitor this development closely. (short term participants should be ok, financial looks decent).

I have observed over the years, China competitors can actually negatively effect the local manufacturers, such as Ekowood. (May be others that I may not be familiar with).

1. Gadang 1H results is not bad, about RM46m, consistent with management guidance of more than FYE2016

2. PE is traded on the around 7x (MCap is 670m), the lower band of 6-12x. Total cash is RM247m. Net cash RM67m.

3. Market perception (still negative on Gadang) because property contribute about 56%, while construction is 40%. However, the fact is, Gadang is going into property at "lower cost" - land provided by others,
1) Laman View
2) Puchong
3) Kwasa Land
4) Capital City (sunk cost of about 30m)

Total GDV of about RM3.5b to RM4.0b with Minimum "land costs & sunk cost" (most developer must have spent about RM300-400million to buy land for such GDV). Semenyih land is RM100m.

4. End of the day is the EXECUTION is crucial. There is no point having large GDV but unable to SELL. So, we have to evaluate Gadang property carefully if it is SALEABLE. So far, so good (as per management). Similarly, there is no point of having large construction order book if the cost overrun.

5. Moving towards utility is the right move, earnings can only be realised later.

6. Gadang is not well liked at the moment because everyone in town got the MRT2 project, except Gadang. "Kwasa Land" and "Puchong Land" contracts are property contracts, some investors don't like it.

7. As mentioned earlier, if we look at IJM Corp profits, do we actually know how much % are construction, property, toll roads, plantations (over the last 10-20 years), it evolved. At the moment, no one cares, it is trading at PE of 21x. IJM was once upon a time is like Gadang. It evolves.

Result likely to be tomorrow. Expected to be better.

who will adjust for bonus issue? how?

zai zai, regardless the data is correct, Mr OCK bough about 4.126m shares @ about 78.5 sen (RM3.2m) from Dec 8, 2016 to Jan 4, 2017.

Mr OCK purchase of OCK Group shares (although small at 0.5%) is deemed as positive and confident on the Group in the medium and long term.

(I also notice the directors of Innoprise bought their own company's shares around 70sen, now is about 130 sen (peak at 140 sen) in less than a year - reference - not related at all)

brahmal may have unloaded?

For Information, Axiata sold its towerco portion at EBITDA Multiple of 12.5x (based on regional reference).

@tksw, I was shocked when I read the minutes of the AGM (as shown by your link), thinking that tksw must have got it from wikileaks. To my surprise, this is the first time I see a PLC published its AGM's minutes. If all PLCs do that would be great.

When I wrote about Gadang Part 8, I did not know the said minutes was published in their website. As I did not attend the AGM, I called up the management to seek clarifications on some of the issues (to avoid assumptions).

COMPARISON
Scientex EBIT for FYE16 is 188:120 for Property:Manufacturing or about 60%:40%.
PAT is about RM232m and Market Cap is RM3,100m. PE is about 13.4x. (so how much PE should be given to manufacturing and property)
Investor don't seems to mind their property portion which grows faster than the manufacturing. In fact the property division has improved its ROE from 14% to 20%.

WHAT IS GADANG UP TO
Gadang investment of close to RM200-300m into utility/plantation/solar/hydro out of total shareholders fund of about RM550m is a good diversification into sustainable biz. And its natural transition part its biz from fully construction to property, makes more sense than a manufacturing going into property, because, property requires construction expertise, and it also improve ROE of the Company. I believe this is a great integration of biz, which using the expertise of engineering, construction and development (water, hydro, solar or plantation).

Isn't it how gradually IJM Corp, Gamuda and other big players started with 20-30 years ago?

@Flintstones, as per the Circular for acquisition on the Vietnam deal, the audited past 3 years turnover is RM46-49m and profit after tax of RM7.2-7.6m, that works out to be about 15.6% PAT margin @ tenancy ratio of 1.25 times. (Management will try to improve this margin)

I guess they are using different tenancy ratio as their example. Thanks for the info.

Shareholders' Fund @ 31/8/16

RM550 million

Sustainable Growth Projects
Est. RM'm
1) 4 Water Concession 80 (on going)
2) Plantation (2100 ha) 52.4 (RM25/ha x 2,096ha - as per TA - fair value for young palm oil)
3) Mini Hydro 100 (2018/9)
4) Solar Plant 100 (still waiting for details, estimates)

Total 332.4m (average of EBITDA of RM50-60m)

(It is more appropriate to evaluate concessionaire projects using comparison of EV/EBITDA, normally initial year has higher PE of 12-18X)

Not forgetting JV for property development deal

1) Kwasa Land (LT) - estimate of RM700m
2) Puchong Land

At current EV (Market Cap less net cash) about RM590m, and EV/EBITDA of say about RM130m (as per TA) of 4.5X deemed low.

Based on the following article:

http://www.mbipv.net.my/news1/2011/February/Malaysia%20first%20solar%20power%20plant%2025%20Feb%202011.pdf

Based on my reading the cost per MW for solar plant is about USD4.0 per MW. So, this project is about RM100 million. Good news, if it materialises into strong sustainable tariff (way better than one-off construction contracts). Another sustainable engine for growth?

Tx again. You are right, most investors' clubs will concentrate on high ROE, high income yield, low gearing, low PE, P/BV (which is nothing wrong), and neglect some high growth stock with steady recurring cash flow (like a toll road with growth potential). You are one of the few that speak substance.

The inability to differentiate between "productive debt" and "unproductive debt" could be another factor.

An analyst said, every 10% increase of tenancy ratio can boost OCK Yangon's annual turnover by 21%.

Thanks for the insights. Looks like you have done more in-depth research + definitely more knowledgable in this sector.

For me, if the biz model is good (high EBITDA), financially strong (not over-geared), reasonable management, it should be recognised sooner or later, despite many players around. (unless it is over priced).

Comparing their pricing, edotco purchase cost in Myanmar is about USD224,000 per tower vs OCK about USD76,000 per tower, perhaps, edotco tenancy ratio is good, i.e as you have mentioned 1.9x tenancy ratio. Some report also estimated that Myanmar tenancy ratio may go as high as 2.9x by 2020.

Btw, why do you think OCK is overlooked?

Frankly, the premium on warrant of about 15-20% with 4 years of expiry is low, with a pretext of a stocks with CAGR of about 20-30% next few years (if I remember correctly, was mentioned by one of the analysts).

Thanks Zai Zai.

Using, edotco or MIG tenancy ratio as reference, upside for OCK will be pretty good. Not sure why many analysts did not project high tenancy ratio, could be concern of execution and new kid on the block "perception".

Any idea what is the norm of tenancy ratio in Vietnam?

Admin should update the NOSH (no of shares) for Gadang at 646.558 million shares. The market cap is only about RM670m. Based on expected earnings of about RM100m FYE17 (disregard new contract secured), PE of 6.7x is on the lower end of the PE range 6-12x.

@Flinstones, if I remember correctly, analysts said Myanmar revenue is about RM60m (at tenancy ratio of 1.0x), and Vietnam revenue about RM40m (existing tenancy ratio). EBITDA of 60% and 50% respectively. IRR (equity) = 16-20%.

Myanmar tenancy ratio can go higher than 1.5x over next few years. Most analysts are very conservatives. I remember UOB KayHian said, if ratio at 1.15x, the fair value of the company is about RM1.30 per share (based on DCF).

The 2Q is likely to exceed the 1Q results. Partly will come from Capital City/Laman View, and partly from construction. In fact, as mentioned by the management, FYE17 results will be higher than FYE2016, "disregard" securing new construction contracts, likely before end of 1H of 2017.

Under appreciated stock. why? EBITDA for Myanmar is 60% + Vietnam is 50%.

@tksw, you are right. Else, doctor for chairman of a construction company? Free medical for staff?

For those who kept Gadang, prior to dividend and the bonus/warrant issue, today, you get back today about RM3.00 per share (after considering dividend and free warrants). Less doomsayers lately.

Actually nothing much happen to Gadang this year other than getting the KwasaLand deal. Investors must differentiate between information (on company fundamental) and influence (normally temporary, on share price), and investors also suffer from cognitive biases due to "social media"

Someone said successful investing is 1% about what you know and what you buy, and 99% about how you behave. Sure or not?

Besides "Misappropriation in 2014", investors must be mindful of:

1) Total debt increased 572m vs 336m
2) ROIC is about 7% only
3) Yes, current DY is 5%, but prior to 2014 average DY is 9-11%.

(limited review only)

Kkevin2625, Keeping both. One with a lifeline of 4 years to expire, due to the risk in warrant, expectation of return is also higher. Depends on your risk appetite.

zoomboom, Myanmar's engine is 60-65% working, Vietnam's engine is 100% by mid Jan 2017, hence, my expectation of 2017 Christmas for it to launch is not a 'hope', is a reality. Let's get some popcorn this year to enjoy the launching "experience".

Hi Mc_Wei,

Finally, appreciate your help to add me in, thanks:

http://klse.i3investor.com/servlets/pfs/71132.jsp

Dear Mr Tan

If still acceptable, please include me (1st time);

1) OCK-W 30%
2) Gadang 30%
3) Inari 20%
4) Kossan 10%
5) Gamuda WE 10%

Thank you.

sosfinance

Keep OCK-W till next Christmas. Likely will have a wonderful surprise. Let us see what will happen to 21 sen in next 12 months. Put it under the Christmas tree, with a condition, to open in Dec 2017.

Upside for OCK (77 sen) & OCK warrants (21 sen) is good, about 80% & 220% respectively, based on current price. Not much interest at the moment based on volume.

Mr OCK is buying 3.5 million shares (8-20 Dec) at 79 sen each. Brahmal came in during the PP at 81.5sen.

Updated in my blog - SOS Will OCK ripe for picking in 2017? - Earnings is coming in gradually in 2017.

1. Time is a friend of a wonderful business and enemy of the mediocre, WB. Why?

2. Focus on the engine(s) of sustainable cash flow (and ROIC or ROE) in the business, any adverse changes to the biz since the last time you bought it. (Remember, you are not timing the market (no one is perfect, sometime you got it right, sometime not, you bought it because you have done your research & background check, its estimated intrinsic value is worth more than the market price before you bought it)

3. OCK is expected to deliver about 600-700 towers by end of the year. And another 220 towers by end of first quarter next year. (RI, PP, Loan, Partnership, all completed in End 2015 and 2016)

4. Vietnam deal is completing by end of Jan 2017.

5. Normally, (my personal strategy), if funds available (keep 30% of it), I will average if it dropped >25% from my average price. Of course, provided no major negative effects on the "engines".

6. Yes, investing does involve "a bit of luck when comes to timing". One year from now, I believe, you will have a more positive remarks. Ask yourself, do you give up on your own biz because temporarily the market do not favour the market price (not the biz, as biz is doing well)?

MD continues to buy shares (from 8-16 Dec) total purchase is 3,500,000 shares @ about 78.5sen average. Small sum, but is vote of confidence.

Positive news:

1. MD bought about 3.1 million shares at average price of 79 sen [RM2.5m] on 8 & 9 Dec 2016

2. Placement made couple of months ago to Brahmal (close to 5%) at about 81.5 sen [paid about RM32 m].

3. Edotco placement (INJC) & Sale of Edotco shares (Khazanah) worth about USD600m. Axiata will remain majority shareholder. Will be interesting to see the details soon what is the valuation given to Edotco.

4. Those who "can" accumulate now (mother 77sen or warrant 20.5 sen) is "fortunate" as most of the execution risks of the Myanmar and Vietnam deal is "removed". Just waiting for the cash flows and earnings to come in next year.

Rationale to sell warrants at 25.5sen, and to purchase mother share at 90.5sen. (premium is about 45%). Looking at the current situation, the price will only move after securing a new contract or announcement of a lot better 2Q (in late Jan17).

Meanwhile, if it comply with "your plan" (i.e. price dropped 25% or more from your average price), then can buy some, as it is still consider "undervalued" (PE <6x for FYE2017) even without contract announced.

Earnings is likely to be better in FYE2017 (although more may come from property sector).

Go for medium to long term. 1-5 years. Earnings from the investment in Myanmar and Vietnam will only comes in significantly 2Q and 3Q 2017. Accumulate a bit at 21.5sen.