@observatory - thanks for your input. I checked the document you mentioned, and googled for the difference between the two items, and this is what got:

Sundry Receivables
Definition: Small, miscellaneous amounts owed to the company by various parties for different reasons.
Examples: Refunds, small debts, reimbursements, etc.

Prepayments
Definition: Amounts paid in advance for goods or services that the company will receive in the future.
Examples: Advance payments for goods, services, rent, insurance, etc.

Anyway, in the latest Q, the receivables have reduced to RM123.5 mil from RM151.4 mil a year ago. So, this is no longer a concern.

@lionel_messi and @Sardin -

For a company to pay a decent (and, hopefully, growing) dividend, it needs to have a decent and growing revenue. In the case of Innoprise, its dividend payout ratio of 0.88 is rather high, leaving very little room to further increase the payout ratio should revenue suffer for any reason. This high payout ratio also suggests that the company might not have significant growth opportunities requiring reinvestment of earnings.

I also looked at the company's net income and accounts receivables for Q1-23 and Q1-24. In Q1-23, net income was RM9.1 million and accounts receivables were RM2.28 million. For the latest quarter, receivables have more than doubled to RM4.67 million, while net income has only slightly improved to RM11.8 million.

I also have questions about the increasing values assigned to plantation trees*, but this suggests (to me, at least) that the company could be a little too creative in recognising revenue.

Given all the above, I’d give this company a pass. I see little upside in the near future, and the dividend would likely be cut if the price of CPO falls below its current RM4,000 per tonne.

* The following is from its 2023 annual report: "Biological assets classified as non-current assets represent standing growing trees to be harvested upon maturity. These plantation trees are measured at fair value less costs to sell. Any gains or losses arises from changes in the fair value less costs to sell are recognised in profit or loss."

Dear All,

One of the items that stands out in Magni's balance sheet is its receivables. In last year's Annual Report, this amounted to RM151 million (Year 2022: RM112 million). The company recognizes this as one of the two major risks it faces, but says the risks are mitigated, presumably due to their long-standing relationship with the customer. On this, I have two questions.

1. Over 75% of the trade receivables are from just one customer (who buys the garments to sell worldwide), and yet in 2023, some RM16.4 million are classified as past due. Did all of these past dues arise from Magni's packaging business? Of particular concern is the RM1.8 million that is past due by more than 60 days.

2. Receivables also include sundry receivables, which have increased drastically from the previous year, rising from RM4.7 million to RM41.3 million. Does anyone know what this is? How did this arise?

Thanks in advance for your response.

P.S.: The receivables have since increased to RM179 million as of January 31, 2024.

@Sardin:
> There are at least 3 wonderful things about Inno. First, talk about the land. Land concession is until 2073. It had been extended before, and will be again in future. Company like UP needs to pay for the land as quite a lot of it are leasehold. This cost is recognized as amortization. Comparing this to the rental Inno is paying despite the fact that Inno owns no land, one will find that the "effective cost to use the land" for Inno is a significantly less (RM 1.83 per ha per year or RM 3.40 if you want to assign 0 cost to the land planted with laran trees and move all the cost to the oil palm plantation). The 2nd wonderful thing is this FY2024 EPS and DPS.

Innoprise is in a cyclic commodity business, yet it enjoys a rather decent PER. We have to ask why. I feel the wonderful things you mentioned above are already priced in. From their own reporting, we know that the company is highly dependent on the price of CPO, which, after almost halving a couple of years back, has been stable at around RM 4,000 per ton. So, any growth in earnings must come from either increased production or improved productivity.

As of the end of 2023, the company reported that only 0.5% of the trees were immature; the rest were already producing. (In 2022, 261 hectares were planted with immature trees; this reduced to 56 hectares in 2023.) Regarding the laran trees, they are expected to achieve maturity only about eight years from now. Overall, we do not see much room for growth.

Regarding productivity improvement, the company reported that oil and palm kernel extraction rates improved by 1% and 3%, respectively, in 2023. This, too, suggests a lack of room for growth.

My screener shortlisted this stock because of its strong financials, profitability, and its closeness to the 200-day SMA, but its lack of growth prospects gives me pause. Let me know if I've missed something. Cheers.

@probability --

I bought a bunch of banking stocks -- CIMB, Maybank, ABMB, RHB and AMMB -- when they were a lot cheaper a few years back. Almost all of them, safe RHB, have increased in price considerably since. At present, I am analysing all banking stocks again to see how best to rebalance my holdings.

1) You asked about ABMB. At the current price, it is very attractive (Price to Tangible Book is 0.89); however, its earnings growth is weak. Since mid-2022, the earnings are almost flat. (P/E to Growth Ratio or PEG Ratio is 2.16.)

2) PBBank, despite my comments above, is somewhat attractive. It has a high quality book, and therefore sells at a premium. (Price to Tangible Book: 1.5.) It is growing, albeit slowly (its PEG Ratio is also 2.16 despite higher P/E). I took a position in it recently, and may add more if the price drops well below RM4.

3) I find HLFG the most attractive among the banks at present. Its Earnings Per Share (EPS) has grown by 9.67% annually over the last five years. But the share price, for whatever reason (needs further investigation), hasn't kept pace. Its Price to Tangible Book is barely 0.74, and its PEG Ratio is 0.76. However, there are a couple of things that I don't like about the bank, and they are: 1) low dividend yield (of around 3%) owing to low dividend payout ratio; and 2) very low trading volume.

@1288Go - you are absolutely right. My bad. I've corrected it now. Thanks.

@itzmia:
> I started buying shares when CIMB was selling at around RM3.40 four years ago. I have sold whenever the prices went too high and bought when the prices dropped sharply. Right now, I believe CIMB is undervalued. I am not adding anything now, but would likely do so should the price drop another 15%. So, don’t fret. Even if the prices stagnate at this level, you’d still be enjoying CIMB’s decent dividend.

@Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥:
> Revenues and earnings continue to grow at low pace (4% annually). Dividends paid over the last 10 years grew from 11sen (2014) to 19 sen (2023),. growing at CAGR of 6%+. At price of RM 4.04: Its PE has shrunk from mean of 14 to 11.8 today. Its present DY is 4.7%.

PBBank reached its highest point in 2018, with a P/E Ratio exceeding 17. Now that ratio has reduced to 11.8, as you pointed out. The question is why?

Between 2018 and 2023, the bank's assets have grown from RM420 million to RM511 million (CAGR: 4.0%). During the same period, revenue has grown from RM22.0 million to RM25.4 million (CAGR: 2.9%), and profits have grown from RM5.6 million to RM6.7 million (CAGR: 3.5%). It is apparent from the above that the assets at the bank are growing faster than the profits generated from those assets, indicating maturity and a slowdown.

Comparing the above figures with those from five years prior — between 2013 and 2018 — we get a CAGR of 4.0% for asset growth, and 5.5% and 4.4% for revenue and profit growth, respectively. From this, we can clearly see that revenue and profits were growing faster than assets in the five years leading up to the bank's peak in 2018.

The bank prides itself on having the highest Return on Equity (ROE) of 13.0%. Although this number has slipped from 14.8% in 2018, it remains respectable. The thing about ROE is that it can be achieved either by increasing profits (the numerator) or reducing equity (the denominator). Sadly for PBBank, it is doing the latter. Between 2016 and 2018, the bank consistently increased its dividend payout ratio. As a result, the payout percentage grew from 43.0% to 55.5% during these years. This is yet another sign of maturity and slowdown.

In short, Public Bank needs to get aggressive about increasing its topline and bottom-line. It isn't sufficient to say the bank holds the leading position in the Malaysian market for residential and commercial property financing, passenger vehicle financing, and the private retail unit trust business (which, thankfully, has started growing again after hitting a low point in 2020).

Maybe the bank is already addressing this, as the gross impaired loan ratio (GIR) increased a few basis points in 2023, and the bank has publicly revealed its target for GIR to be less than 1.0. (Between 2015 and 2022, the bank's GIR averaged below 0.5. Higher values were seen in 2014 and 2013, when the numbers were 0.6 and 0.7, respectively.)

Besides the above, I'd also like to see the bank get aggressive about incorporating digital technology within its operations and reducing manpower. At present, the bank has over 19,000 employees. The financial sector is one of the biggest beneficiaries of new technology. When PBBank gets serious about this, it will likely result in job cuts. However, I suspect the bank is reluctant to take this step.

Interesting report, particularly when it is read along with the author's earlier report from Dec '22, which is found here: https://klse.i3investor.com/web/staticfile/view/484008

@Sslee:
> https://www.icapital.my/2023-10-02-icapital-biz-berhad-announces-innovative-dividend-policy-en-us/

ICAP now sells at almost 27% discount. In this condition, should the dividend policy be implemented, the dividend would be about 14 cents per share.

@JohnD0ugh:
> In the 2nd half of May 2024, COL and its gang of bullies sold hundreds of thousands of ICAP shares. As a result, the share price of ICAP was pushed down from RM3.44 on 14 May 2024 to RM3.16 as at 31 May 2024, breaking its rising trend. In less than 2 weeks, ICAP's share price fell 8.13%.

I fear you are misrepresenting TTB's position. At every AGM, TTB has been lecturing us on how COL and Co. are keeping the ICAP price depressed by accumulating ICAP shares on the cheap. Didn't he even file a suit against COL to prevent them from buying more and thus keeping the prices low? Now that COL is finally selling, TTB, of all people, would be the one celebrating.

@BlackDiamond:
> A good bank but run by a group of directionless fools!😭😭😭

Why do you say they are directionless?

@troy88:
> Ambank worth at least above 4.60

Ambank's tangible book value per share for the quarter ending in March 2024 was RM5.75. At the current price, it is trading at a price-to-tangible book ratio of 0.74. This value is on the lower side compared to Ambank's history over the last 10 years. Its tangible book ratio has ranged from as high as 1.73 to as low as 0.59.

@BLee:
> When Dividend goes ex, the share price drops by the same amount, is it positive or negative?? IMHO, it is just a ‘Zero's exercise, any profit made is declared as Dividend and given out to shareholders with $ deducted from cash flow ‘reserve’. Dividend Yield (DY) is just a ‘barometer’ indicating Price vs Dividend, i.e. fluctuation Price increase or decrease vs a declared fixed Dividend for the period.

1) In Malaysia, we are no longer taxed on the dividends we receive, which I consider a good thing. I prefer to have the money in my bank, instead of it being merely reflected as a paper gain in the company’s accounts.

2) Companies that pay dividends tend to be mature companies that probably do not have innovative ideas to invest their excess money. By paying out dividends, they reduce their equity and thus maintain a high return on equity (ROE). ROE measures how effectively a company uses its cash to generate revenue and income.

3) The key number to look at for dividend-paying companies is the payout ratio. For example, RHB's payout ratio is 61% this year, which isn't great but is acceptable. In comparison, HLB and PB have much lower payout ratios.

DividendGuy67:
> It's gung ho indeed if you can't cope, but if you can, do note institutional investors prefer to own much more than 50-100 stocks, due to their fund mandate and benchmarks.

Good for them. I fear I do not have that level of capability or bandwidth, let alone inclination.

DividendGuy67:
> My minimum number of holdings is at least 40 stocks. My experience is I only need to spend 2% of the time to analyze the big picture, and it explains 98% of the results over the long term. In short, I play the statistics.

I find owning too many stocks tiresome. In my younger days, I was a lot more gung-ho and held numerous positions. However, over the years, I have come to realize that I prefer owning stocks for the long term—at least 5 years—and favour those that are more predictable.

I aim to own around 20 stocks at a time, though there is often some overlap as I trim and gradually exit richly valued stocks while buying those I perceive to be undervalued. Generally, I try not to allocate more than 10% to any one particular stock.

Hi all -- While the FPI's share price has improved considerably in recently months, I remain concerned about its not so impressive top line number. As a result, FPI's PS Ratio now stands at 1.1, well above its historical norm of around 0.7. Is this a course for concern?

I added more when the price dipped recently after the x date. But, the above concern keeps me from adding more, despite FPI trading at such depressed PE Ratio, improving operating margin, and impressive ROIC.

EngineeringProfit:
> PEG ratio about 0.7 ? Over the past decade, Formosa Prosonic Industries (FPI) has shown notable growth. Analyzing the available data, FPI's earnings per share (EPS) have increased significantly, highlighting a robust performance trend.

May I know how you calculated the PEG Ratio? I got 0.24, based on the following:

PEG Ratio = PE / 5-Year EBITDA Growth Rate
= 5.73 / 24.3
= 0.24

Are you using a much lower growth rate? If so, may I know why?

> Overall, FPI has maintained a strong growth rate over the past decade, making it an attractive investment option within the materials sector.

I consider FPI as a hardware manufacturer. Not sure why you place it in the materials sector.

I remember Bursa publishing its daily and monthly ADTV, in its website. Is it still being published? I tried to search for it, but couldn't locate it.

KingV:
> The NSK grocer has its official opening in SUMMIT on 16/12/2023. Based on my rough estimates the opening should bring in an extra revenues / earnings of at least half sen per share (with additional parkings) for each calender year.

I have put together the following table based on publicly available information. The latest estimates are obtained from AmFirst Website.

Real Estate | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024E
Bangunan Ambank | 99.6% | 99.6% | 99.6% | 100.0% | 100.0% | 98.3% | 98.3% | 93.4%
Menara AmBank | 90.5% | 82.4% | 72.7% | 72.5% | 73.3% | 73.9% | 73.9% | 70.1%
Menara AmFirst | 62.0% | 58.7% | 68.5% | 74.6% | 74.4% | 66.4% | 0.0% | 0.0%
Wisma AmFirst | 78.6% | 66.6% | 97.6% | 91.2% | 89.8% | 87.8% | 89.8% | 81.8%
The Summit Office | 64.4% | 72.7% | 82.2% | 85.1% | 81.2% | 65.5% | 73.4% | 88.2%
The Summit Retail | 74.3% | 77.9% | 74.6% | 68.5% | 63.6% | 60.8% | 72.0% | 69.8%
Prima 9 | 0.0% | 100.0% | 100.0% | 100.0% | 41.7% | 43.8% | 46.7% | 46.7%
Prima 10 | 60.1% | 60.1% | 83.8% | 83.9% | 83.8% | 83.9% | 83.8% | 83.8%
Jaya 99 | 100.0% | 93.4% | 89.7% | 83.2% | 79.2% | 74.8% | 73.8% | 79.5%
Mydin Hypermall | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0%

Overall, we could see that there has been hardly any improvement in the occupancy rates over the last eight years. We even see reduction in both BAG and MAB, the original properties of AmFirst.

I first took a position in ARREIT back in 2011. Between then and 2020, I continued adding more shares until, at one point, ARREIT comprised around 10% of my entire portfolio. However, sometime in mid-2023, I concluded that something was seriously amiss at this REIT. I wish I had realized it sooner. I guess I was too enamoured with the company to accept reality. (See my post above from Nov-21.) Nonetheless, I offloaded the bulk of my shares at around RM0.51, keeping a few thousand shares as keepsakes.

Having read their 2023 Annual Report again, I couldn't see how the management could turn the Trust around. Their big strategy is to exit hospitality completely and focus on education and healthcare.

Long-time unit holders know that the ex-Holiday Villa Alor Star has been vacant since 2018! Instead of selling it first, ARREIT sold the 100% occupied Holiday Villa Langkawi — supposedly because of the 'new strategic focus'! Fine.

Besides the Holiday Villa Alor Star, the former Toshiba TEC building has also been vacant for over two years. There is hardly any discussion about what the management plans to do with this building.

However, these properties aren't the biggest problem in ARREIT's portfolio. The biggest issue is the very place the Trust is occupying—namely, Vista Tower, which makes up 38% of ARREIT's asset value. When the property was purchased in 2018, it had an occupancy rate of 70%. Since then, the rate has only declined every year, reaching its current 35% occupancy rate. I really hope the management does something drastic about this property soon.

Overall, the asset-weighted occupancy rate of ARREIT has declined by 18.9% between 2018 and 2013, from 84.3% to 65.3%. This is an issue that must be addressed.

Anyway, I will no longer be a unit holder moving forward and wish the management success in turning around this once promising REIT.

raymondroy:
> im planning to enter HLFG mainly due to its low PER, based on current qtr eps of 72.1c, this works out to T4 PER of 6.06x.... which is so low!!! Or shd I just get into Ambank and RHB

I increased my position in HLFG again today. It seems terribly undervalued. As per my estimates, it should be trading at around RM27. So, I really don't understand why it is selling at such a deep discount. I don't mind holding on to HLFG for the long-term, but with a dividend yield south of 3% (owing to a very low dividend payout ratio), I recognise it'll be pain. As to your question, both RHB and Ambank appear to be undervalued, as well. But RHB pays good dividend (payout ratio > 0.6). I have been holding on to RHB for four years now. No regrets.

Also, look at this forum. HLFG is one of the largest PLCs in Malaysia, and is part of the FBM KLCI, and yet, so few people post here.

Given the latest results, the TTM EPS rises to 68.2 cents. Should we assume its historic PER of 12.3 holds, the new target price would be RM8.38, a price that the stock last hit 11 years ago!

nikicheong:
> Do not expect to learn much, if at all anything, during tomorrow's AGM. I've submitted a handful of questions, let's see to what level of detail they provide answers/explanation.

Of late, I find your posts to be rather negative, or dejected. You were a lot more optimistic a year ago. Now, I see you lamenting about lack of growth. As I recall, growth wasn't the primary focus about a year or two ago. It was about the high tax burden the company bore, and we were (at least, I was) quite happy to see the company aggressively paying down debt, and moving out of its financial underperforming OSV business completely.

What has changed?

Dear investor -

Yesterday, I took a position in BAUTO, as it looked undervalued. However, upon closer examination, I found its revenue to have gone up by over 50% in a year. Anyone here knows why the sales shot up last year?

Also, Income from Continuing Operations appears to be significantly higher than Cash Flow from Operations. This suggests that a significant part of the company’s earnings might be based on accruals rather than actual cash flows.

I wish to take a stronger position in BAUTO, but the above gives me a pause. What am I missing? Any insight would be much appreciated. Thanks. :-)

neohts:
> The total number of shares is 86,800, hardly 0.0074%, and the amount in question is RM26k. The management is doing this to create a sense of ownership among a select group of employees, I suppose.

1288go:
> Is it true that it's not a large cap stock so institutions sideline Rhb?

RHB, a large cap stock, has a market cap of RM24 bil. It is the 21st largest company in Bursa and is part of the FTSE Bursa Malaysia KL Composite Index. In terms of banks, it is the fifth largest in Malaysia.

TheContrarian:
> Eh, @Thirai , you didn't know that John is TTB?

No, I didn't. Whoever he might be, I'd appreciate it if he backed up his claims with sound arguments and supporting evidence. Unfortunately, given his lack of response to the question posed, it seems we cannot expect such things from him.

DividendGuy67:
> If one is an average trader who sold at 4.50 and lost out on 39 sen dividend, the same Buy and Hold investor now sees his average cost reducing from 4.50 in mid 2022, to 4.11 today.

What you say is true. However, we typically move out of a position only when we see better alternatives. I liquidated my PBBank positions when it was trading around RM4.70 and used the proceeds to increase my position in CIMB, which, at that point, was trading around RM5.15. I based this decision purely on the PE Ratio, as PBBank's valuation seemed rich compared to CIMB's. In retrospect, this appears to have been a sound decision, as I regained the dividends lost with PBBank both as dividends and as DRP shares with CIMB.

Using the same strategy, I'm now gradually moving out of a couple of stocks that have performed very well in the last year or so and into PBBank and HLB/HLFG. My decision here is again based on my assessment of the growth prospects and valuations of these companies. This might seem like a poor short-term decision, given that the stocks I'm selling continue to increase daily, while those I'm buying are either stagnant or declining.

Btw, I read your chart-based analysis of PBBank. Even though I do not invest using Technical Analysis, I liked what I read.

1288go:
> Public bank shares has ballooned to about 20bn shares. It's share dilution. Of course buy more to make up for dividends.

The shares ballooned (if my memory serves me right) in 2020 following a 1:5 share split exercise. It didn't dilute the shares of existing shareholders. I believe the management did the subdivision to make the share more affordable to retail investors.

> To me, PBBANK is a Warren Buffett stock, where our favorite holding period should be "forever". This is because of the bank's long term historical track record of growing its EPS and DPS and as a result its NAPS.

While Public Bank is probably the best run bank in Malaysia (based on its Net Margin that is above 50 %, NIM of 2.86, ROE of > 12.5 %, and cash to debt ratio of 1.55), it has been recording a single digit growth of less than 5% for over 10 years now.

As to the dividend yield, it appears high now only because of the slump in its share price over the last two years. Until recently, it was the banking stock with the highest PE. (Historical median PE: 14.8.) No longer. I sold out in mid-2022. Now, I find Public attractive again -- compared to its alternatives.

> if investors aim for dividend + growth in share price for banking sector. RHB & MAYBANK are far better than public bank at this moment. Public bank yearly dividend cant even cover current margin interest compare to MAYBANK & RHB

Consider this: The PER, Dividend Yield, and Payout Ratio for the three banks in question are as follows:

1) Maybank: 12.87, 6.01% and 0.76
2) RHB: 8.43, 7.23%, 0.61
3) Public: 12.25, 4.53%, 0.41

Of these three, RHB is the most attractive. Public comes second. Maybank appears to be the most richly priced at present. While Maybank pays a decent dividend, its payout ratio is very high, almost twice that of Public Bank. (Note: I have positions in all three.)

> what you meant by "True, it is not that strong, financially, but so are other banks in Malaysia."?

Over the last ten years, the Revenue per Share of HLFG has grown from RM 4.24 to RM 5.47. During the same period, the Tangible Book per Share has almost tripled from RM 8.16 to RM 22.67. Which raises questions (to me, at least) about the quality of the assets that are being accumulated.

Now, I also look at the Cash & Equivalents over the same 10-year period and compare it with Total Liabilities. Between the periods 2014-2020, the group's cash position was between RM16.3 bil and RM24.8 bil. Total Liabilities on the other hand has tended to be below RM200 bil. However, if we look at the current values, the Cash position has dwindled to RM 11.1 bil whereas the Liabilities has ballooned to RM 278 bil.

Hence, my comment above.

Today, I finally took a position in both HLB and HLFG. Compared to other local banks, in which I've had position since Covid, HLB seems to be the cheapest. Over the last few years, the profitability of HLFG has increased; and, yet, the price seems not to have kept pace. I wonder why. True, it is not that strong, financially, but so are other banks in Malaysia.

JohnD0ugh, you say, or quote TTB saying, that “I expect the KLCI to rise to 2,500 to 3,000 over the next 3 – 5 years.” What is the basis for this increase? While KLCI is still undervalued based on PER, and reverting to the historical mean should push the index up, don't you think 60% — 100% increase is rather too optimistic?

>1. At current price it is expensive to buy?
Yes, and no. It is relatively expensive compared to where it has been for the last few years. However, RHB has not kept pace with the rest of the banks -- like CIMB and Maybank -- and its PER is still relatively low.

> 2. Wld the share price go up after ex-divd? under present sentiment where banking stocks are performing well?
Of course. Plus in this round, they also have DRIP; so expect the price to drop more than RM0.25.

> 3. Is RHB a better buy compare to other banking stocks?
Yes. It is a better value, except perhaps AmBank. But doubts about that bank lingers.

It’s a party of a criminal. Won’t survive. And, why should it? If Yang Tidak Berhormat Syed Sadiq has any integrity in him, he would resign his position as an MP immediately, and try to clear his name as a private citizen. Muar constituents shouldn’t be represented by a convicted criminal. And, we taxpayers shouldn’t be paying his wages along with his fat allowances.

DAP now has a credibility issue with the Indian community. It started with the appointment of V. Sivakumar and the elevation of V. Ganabatirau. Not only are both from the minority Telugu community, both cannot go beyond paying lip service to the concerns of the community. To make things worse, Sivakumar, the only Indian Malaysian in the PMX cabinet, having appointed his domestic partner and her son to key positions in MOHR, has been caught with his hand in the cookie jar, becoming a national embarassment in the process. That said, it is good that they retired P. Ramasamy. While he did well in the early years, he has become more and more divisive and resentful. His continued role as the Penang Hindu Endowment Board chair also has, I believe, created uneasiness among many Indian voters.

In Mr. Bullshit Buffett's world, right is left, more is less, up is down, China is never wrong.

FPI is an interesting stock, which, as highlighted by others above, appears to be trading at a deep discount. The stock has paid a dividend every year without fail at least since 1994. And, has increased the quantum of dividend paid since 2016. Based on TTM, and a PER for 10.5, the price should probably be RM 5.20 now. That said, I do have one concern, however. Despite improving earnings, the OCF and FCF appears to have dropped quite a lot last Q. Does anyone know why?

@furball: "is getting 8% return on consistent basis from self investing in the stock market possible or a reasonable expectation?"

Investing is fun. If you do not find it so, better leave it to professionals. As to returns, what you get, ultimately, depends on how the benchmark like FBMKLCI performs over a long-period. And, the index unfortunately has not done well for a while. We achieved our highest point eight years ago, in 2014, and we have been going downhill ever since.

So, could you achieve an 8% annualised return by investing in KLSE? Yes, provided you have the ability to 1) identify (through fundamental analysis) a bunch of reasonably well-run companies that potentially could give consistent performance over a long period of time, say, the next 10 years; and 2) be patient and wait for an opportune time -- i.e. when the price of a stock is well below your estimate of its value -- to invest. Easily said than done.

Let's take Tenaga, as an example. I believe most of us here invested in the stock because it is a monopoly, and we cannot imagine a future where Tenaga doesn't exist. So, in that sense, it is a company with a wide moat. Its management, however, is questionable. (I am damn happy that it got rid of its dimwitted Chairman recently. Hopefully, the new guy, whoever he or she is, would hold the SLT's feet to the fire.) If you had invested in the stock in May 2018, you'd have seen the stock literally halving in value (not inclusive of dividends) over the next four years. But, if you had confidence in the stock, you'd have invested in it every time it hits a new bottom, like earlier in the year, when it tested the RM8 mark twice.

This is the question I ask before I take any position in a stock: "Would I be happy if the price of the stock takes a 20% dip in the next month?" If my answer is a firm YES, then I go ahead and commit my funds to it. If NO, I stay away. Simple.

Having looked a little deeper into HEB, I found that the recently concluded quarter was its best since Q3-2018. Its profit margin had for the first time since the earlier period crossed the 10% threshold. The earnings per share, too, is the best since the earlier period.

Should HEB were to maintain a similar performance moving forward -- I think this is highly likely given its recent big wins and its performance over the years paying down debt -- at an annualized EPS of, say, 3.2 cents, and a PER of 28 (based on past performance), we get a target price of RM 0.89. If we were to conservatively price it at 15 (for the so-called Peter Lynch Earnings Line), we'd get a target price of RM 0.47.

So, at RM 0.355, HEB does appear to be selling at a discount of 25% to 60%, depending on how conservatively we price the business. To me, it's a buy.

Hi matt88 - I am not overly concerned about the major shareholder's sale of 2 mil shares, which, according to the same Bursa announcement, makes up barely 2% of her (MADAM SHANTAMALAR A/P C.SIVASUBRAMANIAM) holdings. So, I wouldn't link it with private placement exercise announcement that was made a few days later on Aug 17.

Anyone here in the know re the proposed private placement, beyond what was announced? Thanks in advance.

@Investor818 - the biggest problem is the profit margin. At c.10% it is well below pre-pandemic levels. So, I don't think even the current PER is sustainable. I suspect Harta will test RM1.50 soon.

If you had attended the recent AGM, you'd know why TNB is in the current state. The Chairman, a sitting MP from Rompin, is a charity case. The CEO is an engineer without a money mind. And, the CFO thinks it is normal for a stock to continuously shed its market cap. In 2015 or thereabout, the company introduced LTIP, I presume at the urgings of KNB, and has awarded millions of shares to its senior management. What do they have to show for? Zilch.

I feel for TNB to do well, we need a proper government that thinks long-term. At the least, KNB (Amran, I'm looking at you), which is the largest shareholder, needs to do the thinking for the government. Until that happens, we have no choice but to settle for the dividends.

With its historical PER of 10.4, based on a TTM of 46 cents earnings, the TP could be RM4.74. Interesting.

The YOY quarterly results are sure good, improving the TTM earnings to 37 cents, and with that the TP to RM4.44 at a PER of 12. So, there is quite a bit of upside there.

That said, I wonder why the topline has reduced by 6 percent Q on Q? Any idea anyone?

Ah, I missed the first part of the AGM.

Why does the analyst think the Revenue will continuously decline for the next three years? And, that the PE will remain well below 4.0 throughout the period? The analysis is generally positive; but no so the financial summary.

Two items mentioned during the AGM caught my attention: 1) Armada Sterling V will finally go into production in Q4 of 2022; and 2) the usage of a Combine Cycle Gas Turbine (not sure where).