DY last 5 years average 10% p.a., just keep for the yield. By the 5th year, if you reinvest your dividend, your RM1000 will become RM1580. Not bad at all. This is a good DY stock. Keep for long term (5-10-20 years). Can use some EPF money to keep some.

Before 2013, it is traded below 50sen (market cap of RM21m). The stock start moving from Sep 2012 if you look at the chart. It moves from 2.30 in Feb 2014 and touch 4.00 on 10 March (2 weeks), now it just went back to RM2.70 (today market cap is RM124m). Already went up 5 times.

Thanks titus. Would be helpful. However, it would be great if we know the Technical Analysis as well. That way, we do not need to wait for years (sometimes).

This is interesting news. PP of 50m shares assuming @ RM1.60, can raised about RM80m. As for bonus issue, there is no economic benefits to the Company, but retail investors love it. They felt that if the pie is cut into smaller pieces, they can eat more, just a psychological advantage the felt.

Like it or not, Protasco has been the talk of the town lately for its moves.

Ecoworld just announce bought a land RM471m (about RM35psf) in Shah Alam, with a GDV of RM8 billion. Cost of land/GDV is about 5.8%. Assuming someone wants to have a development with a GDV of RM6billion, the cost of land is about RM348 million. (of course it depends when was it bought and at what location, it can be as low as 3% of GDV).

Question is, you can only gives value to the Company if it has already bought the land like Ecoworld (assumed completed), also, the company must have deep pocket to role out such a huge project. Where to get such money? Private Placement? Enough or not? Rights issue?

Company need money to make money. Of course, you can get loan from banks, if the banks like you.

This stock under performed CI. No catalyst. My own experience, cutting loss is ok as long as you find another potential stock that can outperform YTLP. If not sure, cut 50%, put the other into say what Mr Koon recommend, Mudajaya? Lets take a look a few months later.

Lately the family bought lots of IOIPG. It is trading below NTA. Earnings growth is double digits. Lets see whether this stock moves by May.

Silk market cap is RM300m. Based on an analyst report, the Highway Toll DCF (based on latest projection in 2014) is RM390m and the OSVs charter business (contribute about RM30m), should have a market cap of about RM300m. So, you buy the OSVs business, you get the Highway business free. Hope it does''t go up too fast, at least have some time to accumulate.

Besides its impressive growth over the last 5 years of >10% (Engineering and SPV divisions), CBIP also has in its associates (their effective ownership - 7000ha planted with palm oil) & also their land bank of 76,500 ha in Kalimantan (included recent negotiation of 11,500ha) where 6000ha is planted. This is the size of what TSH Resources has in Indo. And they also hope to plant 6000ha per annum. At market cap of RM1.1b now + PLANTATION (very long term) - with that size, easily worth RM2.8b in 10 years time. But, who can invest for so long? Well it the price tripled in 3 years, about CAGR of 11.5% p.a. + dividend say 3% = 14.5% Hope the price does not goes up so much.

Issue at low price is good for the taker of the RI but not for the company. So, the share price will drop.


issue at the high price is good for the Company and expensive for the taker. So the share price will goes up.

In theory. In real life, nobody can tell.

I was referring to bonus and split (no additional in economic value)

However, rights issue and private placement, will provide additional economic value if the returns from the funding exceed the dilution of the shares.

Yes, when business expands, it needs more money from rights issue and private placements, but if the business does not bring in additional earnings as expected, then, it may have a negative effect (just like raising money say, to go into exploration, and the exploration failed, money then wasted).

The questions should be, is there a lot of upside for Yinson, if there are a lot, then by all means, accumulate. If it close to the fair value of the company, then don't accumulate. What PE is Yinso doing now at RM9.00. Just rough calculation, let say its profit tripled from 17 sen to 51 sen, it is doing at PE of 17x. Is this consider high? Well, depends which side are you on.

Then Protasco has 3 things positives attributes, one, its fundamental (growth from property development), two, technical analyst said Protasco & Yee Lee is moving upward, and third, a venture capitalist company. So, not bad if the company grow from PE of 9x to 18x, supported by chartist and venture capitalist. If not, this counter will be flat, giving about DY 10%. We have to see if the property development really turn into earning growth. If they allocate their resources better, i.e. the additional cash can attain an ROE of 15-20%, well, it would be a growth company in the making.

More and more analysts are covering this stocks. K&N, and others. Another positive for the share prices. I know one fund management house recommended this stock for medium term.

Any experts on property developer out there care to share. In order to develop a RM6b project, how much is the land cost? Say 3-5%? So, land cost for RM6bil project will be RM180m to RM300m. Wow, that's a lot. Say, they can make 20% (conservative figure), wow, the project can make about RM1.2b (perhaps in 5-10 years). What about the construction cost? Does the developer has to pay for it?

Well, of course, you can launch the project, can get the money from buyers (if it is sold well). But, to come to a stage of launching, surely you need to incurred a couple of approvals (6-12 months). Anyway, it would be great if some experts care to share, so we will know how to calculate the base value of the shares.

Please see limitation of formula in Mudajaya (i commented on 19/3/2014 @ 8.46am). With the support of technical analysis, it is even better.

Some of the conditions on the IV by Benjamin

1. adequate size of co (market cap and liquidity)
2. strong financials - low gearing
3. No losses for last 10 years
4. 10 years growth of at least 3% p.a.
5. Price of stock <1.5 of book value
6. Price must be less than 15x PE for last three years
7. Consistent dividend for last 20 years

If you use this in Bursa's stocks, I don't think you can find many. So, please, the formula is just a reference. Example, if an analyst assume growth of 10% growth of EPS for next 2 years, the growth rate we used for calculation should not be more than 3%.

titus, where can we find buffet calculator? I don't mind try out a few method, if the IV is close, it can be used as a guide or reference price.

RHB's latest report TP of RM5.44 (another 9.90% upside). Not sure it is worth taking the risk for 9.9%. Of course, the growth of EPS used by RHB is 35% and 26% for FYE 2014 and FYE 2015. Based on historical PE, at 31 sen EPS, it is PE of 15x. The long term growth (10 years), must be at least at a CAGR 15%, to give the PEG = 1.0 (neither over or undervalue). Not many company can do that (10 years with CAGR of 15% p.a.) because normally after it increase one or two years, it stabilised unless every year there is a new catalyst to provide earning growth without additional capex or opex. Unless it is cornered, not sure if it is worth awhile for that risk.

Lately a lot of small and mid size companies were played up due to rights issue, bonus issue and share split. As far as bonus and share split, it doesn't add economic value to the company (other than lower its share price to attract retail investors). As for rights issue, it is just a fund raising exercise, the critical part is to how the utilisation is used (and at what PE is it issue).

It is like, buy one get one free. But in actuality there is no change in economic value of the companies. In fact, it is waste of resources. If it does add value, every businessman in town will do it.

mk88, nope. DCF is applicable more to concessionaire like toll roads, IPPs or water concessions, where it has 15 to 30 years of projected cash flows more predictable.

There are limitations in using Benjamin's IV method as well. For layman investor, it is sufficient, provided we use very conservative figures, at least we know the entry point (a sharp discount of IV) and exit point, can be 60% to 70% of actual IV. The whole idea of this formula, we have a reference point for entry and exit. There is no full prove formula out there, as long as you think and act like a businessman, invest rationally, I believe, in the long run, you will be doing better than the CI. Of course, we have to revisit the assumptions made on and off based on new data or information, to see if we are on or off course. Just like any businessman, they do not look at the share price everyday, they focus on the productivity, efficiency and competence in their business.

Of course, some shares are cornered by the major shareholders, then, there is no way any formula can help to determine the reasonable price.

I believe it is sufficient. Just assumed the EPS doubled in 5 years, the EPS will be 26sen. (I used RHB's report EPS of 13sen, based on the financials in i3investor, it is 16sen FYE2013). At price of RM1.75, we are looking at PE of 6.5x in year FYE2018 (RHB forecast it achieves it in FYE2015) Assume it is traded at perspective PE of 12 times, then the share price will be roughly RM3.00. The formula is not perfect, but it is easy enough for layman investors to understand and useful, and always, put a lot of discount to it. This stock has some similarity with Mudajaya, high growth. Half the growth used by analysts, calculate the IV. Then you will see, Mudajaya, have similar characteristics.

This is a good purchase opportunity for medium term investors (1-2 yrs). At 2.70, the margin of safety is great. Although the intrinsic value is RM7.70 (using half the growth rate), as I mentioned earlier, there is a lot of limitation to this formula, hence, must always give discount to it. Even, say half of the IV price comes through, it is about RM3.85, giving us an upside of about 42%. Not too bad for one to two years of investment. Risk of going wrong is limited.

Read RHB's target price with earning growth of 30% FYE14 and 40% FYE15. Let's calculate the intrinsic value using Benjamin formula IV= (8.5 + 2(growth rate)) x EPS, let us use 15% growth, half of what RHB's forecast.
IV = (8.5 + 30) x 0.13 = RM5.00 x 35% = RM1.75 [please note that there is a lot of limitation to this formula, because it assume long term growth 5-10yrs, ignore risk free interest, liquidity]. So, the purchase cost should be below RM1.75 in order to have a big margin of safety.

The intrinsic value is RM5.00 (on assumption it has a sustainable CAGR of PAT for next 10 years of 15%). At 15% growth, it means its earnings will double every 5 years. At RM1.75, it is only 35% of IV, I believe there is sufficient Margin of Safety, I have used less than half the growth rate. As for the target price, each investor will have their own target.

Based on PEG calculation, with PAT growth of 10%-12.5% for the next few years, it will have growth potential from today market price @1.65 of about 11-35%. If the growth exceed 15%, the price has potential of upside of 65%.

I can understand haikeyila's concerns of PE115x based on earnings FYE 30 June 2013. This is the narrow way of looking at the stock, hence, many miss out on the POTENTIAL. If we used the average earnings of past 5 years (about RM100m p.a.), you will have PE of 25x (still does not mean it is the most undervalued stock)

Lets look at the stocks from a business perspective, instead of just one or two financial ratio and deduce it is a very expensive stock. FGV pays RM75,000 per hectare for Pontian mature plantation. Assuming JTiasa (semi mature with growing potential) for discussion sake, RM50,000 per hectare, and with its holding of 62,700 ha, the market value of JTiasa plantation alone is about RM3.1bil. Currently, the market cap based on RM2.68 per share @ 900m shares, it is about RM2.4 billion. Say, when the trees becomes mature in 4 years time, say the value per ha increase to RM65,000 per ha, the market value of its plantation will reach about RM4.1bil.

What about the value of his Timber business with about 200,000 ha plus? Yes, timber price, like CPO goes up and down, but surely there are value to it concession right? Perhaps we give it a value say RM0.7billion (assuming RM3500 per ha - just a guess).

So, the market cap of JTiasa ranges

LOW - RM3.8bil (RM3.1b + RM0.7b)
MID - RM4.8bil (RM4.1b + RM0.7b)

Current Market Cap - RM2.4b (@RM2.68 per share)

From a business perspective, you will see a DIFFERENT picture. Some may say its RM800m loan is high, its Net Debt/SF = 0.5 times vs TSH (net loan also about RM800) = 0.8x. I believe it is reasonable for plantation which is expanding.

CONCLUSION

No one is right or wrong, it is just a different point of view using different sets of assumptions. Otherwise, I do not see why Mr Koon put RM90m in JTiasa if he is not TOTALLY convince. Since he is a businessman, his business view will be many times sharper than and CFAs around. That is why he doesn't need to work for CFAs or MBAs or CPAs, they work for him.

This ratio may used as reference: Market Cap/GDP of 2009-2013, 1.26, 1.65, 1.37, 1.56, 1.73 Looks like 2013 is on the high side.

Don't run. Benchmark with established players. Look at long term fluctuations (5-10yrs) of the past (if it is any help). Identify what are the key factors in this industries (is expertise critical, and does the management has adequate experience). After establishing the past, and do a simulation on the major factors (worst case) and long term prospects (after considering risk), if it is still highly undervalued (subjective), then invest. If upside is limited and downside is high, then reconsider. Assumed this is the last dollar inheritance you have before you invest. Investment is part science part art, part 'sentiment' and part 'luck', so, do your homework that is within your control, the one not within your control, use your experience and judgement to guide you. During good time, all prices goes beyond the TP, during downtime, all cannot reach their TP. What I am saying, think like a businessman (look for long term). What is the industry effected say 15% (like what petronas mentioned lately on AHT). Btw, our Bursa market cap is RM1.7trillion and our GDP (2013) is RM980 billion, or 1.73 times. What is the mean? Is this consider high? What is the last 10 years ratio?

Thanks lafx for the report. I am totally new in FPSO. Great report. Only a few concerns. The 49% of the ownership (do not enjoy the cash flow). The implied PE of 23X for FY2015 (although it is benchmark against peers), question is can it sustain for long term. The method of valuation is using SOP (a bit arbitrary)

AND risk mentioned by RHB, fluctuation of crude oil prices (who can be sure crude oil will not go down to USD70/tonne in next 3-5 years), cost overrun and reliance on other specialists that is outsourced.

Just a word of caution, the entire world was positive about KNM during one time until it is proven otherwise. Hope that Yinson has sufficient contingency. Best of luck to those who is the owner of Yinson.

Reminded me of KNM. If the maths make sense, go for it. For those who realised their profits, congrats. Anyone has calculated its Intrinsic Value? The project already secured at the attractive price? Can the customers default (like dry bulks, even good customers defaulted)? It is a bit risky just to assumed they are world number six. Global Carriers was once upon a time move from RM2 then to RM20 and now is RM0.05 per share. Please, do the maths. So far, I don't see many actually calculate its intrinsic value or at least a ballpark.

IOIPG - GDV(bi):MCap (bil) = 21:2.4
EcoWorld - GDV:MCap = 30: (3.4 x 50% adjustment for project not launched compare with IOI)
EcoWorld adjusted GDV:MCap = 30:1.7
Golsta GDV:MCap = ???
Assumption.
Golsta GDV:MCap = 3:0.17

Ecoworld Land Cost/GDV = 0.6/30 = 2%
Golsta Land Cost to be purchase to produce GDV of RM3bil = 3b x 2% = RM60m

On the assumption that Golsta suddenly have a GDV of RM3b, so its market cap is RM170million (or RM3.70 per share). Of course, Golsta need to have RM60mil first.

Please do the maths, at least have a rough basis on the calculation, failing which, how to know whether it is over or undervalued? Of course, if the stocks are cornered, all this calculation is of no use. It can go to RM4, RM8, RM12, RM24, like Segi, 900%. But don't forget Segi start from 22 sen x 900% = RM2.00

So, Golsta should start from 50sen x 900% = RM4.50? Or start from RM2.10 x 900% = RM18.90. However invest or speculate, do the maths. Or, might as well go to Genting Highland, could be better.

Average earnings (past 5 years) EPS = RM0.22, Using Benjamin Graham Intrinsic Value calculation (not adjusted for interest), the stock can only be RM10.70 if it can have a compounding growth rate of about 20% p.a. over the next 5 to 10 years. So the question is, can Yinson sustain such growth. If it can, then it should worth around RM10.70.

Ecoworld GDV RM30bil = Market Cap RM1.1bil (that is for Liew). Say, if the GDV is RM3 bio = Market cap of RM110m. So, Golsta is about RM156m, mathematically Golsta should have a GDV of about RM4.25bil. Hmmmm……. perhaps this is too simplistic. If stock market is based on mathematic, everyone will be very rich.

CAGR of EPS by CIMB for next 3 years is 18% p.a., I have used 9% CAGR to calculate the LT intrinsic value. Note, you only buy when it is traded not more than 35% of the intrinsic value (by Benjamin). Time will tell.

CIMB projected an average growth of 18% over next 3 years. The intrinsic value is about RM7.70 (using the growth of 9%, or half of what CIMB said), say if we follow margin of safety, we should buy below RM7.70 x 35% = RM2.70 per share (which trading at around RM2.70). Perhaps that is why Mr Koon invested so much in this stocks, and of course, he knows the management well. So, upside is a about 2.5 times. If it doesn't move, keep it. Just like Coastal, it stays undervalued for a few years around RM2.00, today it is around RM4.80. Just waiting for for the catalyst and the actual result to convince the sceptics. CIMB used 40% x RNAV = RM3.30 as its target price. Not sure if CIMB is looking at one year horizon.

If assumed sustainable growth of 5% over next 4 to 5 years, IOIPG intrinsic value should be around RM4.50. In addition, it will be designated as a Syariah stock in May, fund managers need to reallocate their portfolio, and it will be a positive for IOIPG. Is a great long term stocks.

What is coastal long term growth (next 10 years) from 2013? If it can sustain a 10% p.a. over next 10 years, I will value the intrinsic value of about RM8.80 per share.

At price of RM9.00, the market cap of Yinson is about RM1.7billion. OK, this is purely based someone said they have about RM7.5bil order book. Using rule of thumb of 10% (PAT), it is equal to earnings of RM750m, say divided by 8 years, average profit of RM93m x PE 20 = market cap of RM1.9 billion. Another 12% upside to RM10.10 per share. This is behind the envelope calculation. Please read analyst report to get more details.

Good luck punting. Golsta director sold 62,000 shares. Perhaps his original cost is lower than 50 sen.

ecoworld (1,214ha or GDV RM30b) vs golsta (0 ha or GDV RM0 b), ecoworld (Lieu) vs golsta (Hii), ecoworld market cap (RM1.1b) vs golsta (RM180m). Not sure it is comparable, you do the maths.

Today under UMA. Will it continue upward when they give a standard answer? Hmmm……..

They sold their treasury shares 17m @ RM1.47, and a few days back, they did a buy back 1,000 shares @ 1.54. One catalyst besides the road upgrading project is the oil & gas sector, which is suppose to provide growth in earnings in 2014. Some potential in this stocks.

Dear All, thanks for all the comments. Will use my EPF money to buy some. Risk is low.

Just read the latest quarterly. Catalyst, contributions from oil & gas & property development for 2014. However the Company sold all its treasury shares its 17 million shares at RM1.43 in late January 2014. A bit conflicting, not that the Company need cash. Looking at the purchase cost of the oil and gas USD22million (63%) revised from USD55 million (78%), not sure why, the acquisition cost is about RM73million, so the contribution, say very optimistic 5 yrs payback, the indonesia project will give cash return of RM14.6million + say depreciation say RM5m, the oil and gas can contribute about RM19.6 million. This will be equal to EPS of RM0.06 + existing EPS of RM0.16, so 2014 EPS will be around RM0.22. At RM1.60, it is trading at prospective PE of 7.3X. Not too bad.

Protasco was part of Intria Berhad Group, until Intria collapsed in the 1997 crisis. Past few years earnings was flat, but, looking at its past 4 years dividend yield, it is 8-14% but the price hardly move from 90 sen to 110 sen, until lately. Is there a catalyst for this stock, since then the DY has dropped to 2.5%, must be something on……………….. Say, you got it 4 years ago at RM1.00 + DY (37sen) + 62 sen (Capital Gain) = 99 sen gain or almost 100% in 4 years, another great company to invest in.

Yinson 2008 share price 52 sen. Today is RM8.70 (16.7x). Those who put say RM5,200 in 2008, today, he is will get RM87,000. In a period of 6 years. Where to search for another Yinson today?

Dear cindylim, you seems to know a lot on Golsta and other investments. Hmmm….Golsta is RM2.93 now. Any potential?

I agree with HL catalyst no (6), this will be very good for IOIPG especially for institutional stocks. Lately a lot of heavy selling from EPF. Based on HL and TA target price of RM3.85 and RM4.40 and the catalyst no (6), Syariah status, it is good to buy and keep this stock as the earning visibility is great, with a very conservative compounding growth of 15% to 20% p.a. in the next 3 years. At RM2.60, and be patient, RM3.60 is within reach over the next 2 years.

DY before 2013 was spectacular (8-14%) until 2013, due to price increase, DY dropped to 2.5%. Fundamentally, it is a solid stocks, but over the last 5 years, it has been trading at single digit PE. Recent turnover reach RM390m, first time indeed, hopefully more catalyst for growth.

Most analysts target price is RM3.60 to RM4.40. Just take a consensus say around RM4.00, the upside is good. Furthermore, assuming the earnings is 26 sen, it is trading at PE of 10x. There is room to improve, provided they have growth over the next few years. Hence, we should watch out for growth catalyst, if we are confident say growth rate is say 10% over next two years (for discussion only), it should worth at least RM4.00. Well, say it took 2 years to achieve that, gain of 54% in two years, I think is pretty good investment. So be patient.

If I remember correctly, this issue was also discussed in Mr Tong Kooi Ong's blog. First, lets put the structure right, get the politician out of Education (knowing how competent is our politicians in Education). Secondly, this is a very very old issue, as proven, the government of the day failed to discharge its responsibility, period (and pity all the new generation students). Just look at MAS, Perwaja, Proton, Renong, Port Klang, University Malaya standard, since when did our government learn from their mistakes? It is just sad that this issue was drag for 40 years and we can't find a solution. Just look at our neighbour and learn (Singapore, HK, Korea or Taiwan system). And Malaysia was one of the top in Education after independent. What went wrong?