Charlie. People will be rushing to join the boat tomorrow. I haven't loaded enough tickets due to lacking understanding of CMSB businesses. Worried of KPMG report. Ha ha.

I didn't know much things behind CMSB until I started digging for more information since 3 days ago. Ready....

Market cap of CMSB stands half of OMH. It’s quite reasonable if CMSB holds 25% stakes in OMM without other businesses.

Market Cap comparison:
CMSB - 1.46 billion
OMH - 2.9 billion

What’s your take on CMSB? Besides OMM, they owned cements business, 50% Sacofa, Associate KKB & KENAGA, JV construction business with Sarawak government.

On the surface, CMSB doesn’t seen sharing much profit from OMM for merely holding 25% stakes. You would be surprised to know the results of comparison between OMH and OMM contribution to CMSB. OMH has reported AUS 17.4 million ( RM 54 million ) PAT attributed to the owner of company whereas CMSB shared PAT RM 25 million from OMM. It’s almost half of OMH entire profit.

OMH’s smelting segment (mostly derived from OMM operations ) has reported PBT AUS 40.5 million for the 1st half 2021. After deducting CIT 24% and translating into RM, we would arrive Associate (OMM) contribution RM 23.8m which is rather close to the above calculations of RM 25m.

OMM contribution is expected far more than 25m given strong demand of ferrosilicon and robust selling prices in the next 6 months.

Profit contributed by Sacofa is rather stable, about 42m per year ,in the past few years. With the assumption of Safico generated average 21m for the 1st half 2021, the remaining 25m is reasonably expected deriving from OM Materials, 75% owned by OMH.

Sacofa PBT:
FY 2020 - 114m
FY 2019 - 113m
FY 2018 - 105m
FY 2017 - 106m

Both OM Materials (OMM) and Sacofa are not listed entities. Therefore, their operations performance will only be revealed in the Annual Audited Accounts.

Cement division bottom line is catching up and may surpass year 2019. JV SEDC & PPES remains profitable after disposing 2% stakes and reclassified as JV.

What really interesting is profit generated from OMM & Sacofa surged to 46m in 6 months performance. We will see a record breaking profit in future when Jendela project kicks off and high profit contributed from OMM as FeSi prices rally.

CMSB operation results half Year 2021
41.5m - Cements
2.7m - Trading
4.5m - Road maintenance
11.3m - Property Development
-11.1m - Phosphate
6.1m - Strategic Investment

15.2m - Share Profit of Associate ( KKB & Kenaga )
46.0m - Share Profit of Associate ( OMM & Sacofa & etc)
12.8m - Share Profit of JV (SEDC & PPES & etc)

AR 2020
Sacofa, the major telecommunications infrastructure provider in Sarawak responsible for over 90% of mobile traffic in the State, Sacofa was deemed an essential services provider and was able to continue running its operations unhampered throughout the initial MCO period.

Operation results of CMSB is mainly divided into few segments:

Year 2020
48.4m - Cements
3.8m - Trading
19.1m - Construction & Road maintenance
-5.3m - Property Development
-2.4m - Phosphate (Excluded impairment 51.8m)
5.6m - Strategic Investment

30.8m - Share Profit of Associate ( KKB & Kenaga )
-23.7m - Share Profit of Associate ( OMM )
41.7m - Share Profit of Associate ( Sacofa )
0.7m - Share Profit of JV (SEDC & PPES & etc)

Year 2019
73.1m - Cements
9.0m - Trading
37.2m - Construction & Road maintenance
20.1m - Property Development
-2.5m - Phosphate
-3.3m - Strategic Investment

19.1m - Share Profit of Associate ( KKB & Kenaga )
-0.8m - Share Profit of Associate ( OMM )
41.5m - Share Profit of Associate ( Sacofa )
-0.6 m - Share Profit of JV (SEDC & PPES & etc)

The biggest advantage to the existing players is the low depreciation costs. Europe automatic machines can be operated for more than 30 years. They are ready to go for price war with any new entrant as many of their old machines have depreciated to zero value.

Therfore, Tin can business players are able to maintain a comfortable level of profit margin in long term.

Tin can business doesn't require high technology but high level of precision or quality (especially leaking and corrosion) requirements must be achieved consistently to ensure safety in packaging food and beverage. It won't easy to enter into the supply chain of the established consumer players due to high switching costs and many big consumer players don't want to take extra risks from a fresh new supplier. In addition, it is a capital intensive for 2 pieces aluminium cans.

Tin can business remains relevant in a stable consumer environment. Their customers are mostly established consumer conglomerate in the market. New players hardly venture into this business since the existing players don't price the products at high level even though shortage happens adding another barrier.

Not sure how long it takes. Next TP 6 or plus another 30%.

Sarawak got big telco tower project
CMSB’s Associate, Sacofa makan udang galah

Sarawak state government holds almost 35% stakes of SACOFA. Regarding to Jendela project, who has the higher chances of getting bigger pie?

Sacofa shareholders:
CAHYA MATA SARAWAK BERHAD ( 50.00% )
STATE FINANCIAL SECRETARY ( 20.51% )
CELCOM AXIATA BERHAD ( 15.12% )
SARAWAK INFORMATION SYSTEMS SDN BHD ( 7.57% )
YAYASAN SARAWAK ( 6.80% )

STATE FINANCIAL SECRETARY
State Financial Secretary’s Office is the State Financial Authority under Financial Procedure Act, 1957 and responsible for financial management in Sarawak. State Financial Secretary’s Office is also a body corporate established on 2nd January 1948 under State Financial Secretary (Incorporation) Ordinance (Cap. 103). The appointment of State Financial Secretary’s Office is subject to Article 11 of the Sarawak State constitution.

SARAWAK INFORMATION SYSTEMS SDN BHD
In the mid 1980's the use of IT among state government agencies in Sarawak started to grow. Shortly thereafter, in 1991, SAINS, then called Sarawak Computerisation Services Sdn. Bhd. was formed. SAINS was given the task of spearheading the development and implementation of IT within the Sarawak State Government to better integrate and utilize its resources.

“ SACOFA SDN BHD (552905-P) is the leading telecommunication infrastructure provider in Sarawak.

SACOFA’s primary objective is to promote common sharing of telecommunications infrastructure amongst operators, enabling speedy and cost effective service roll-out throughout Sarawak.

TYPE OF STRUCTURES OFFERED BY SACOFA
Rapole (Ranging From 12m to 30m)
Lamp pole structure (24m)
Monopole (ranging from 24m to 45m)
Monopole Tree (ranging from 36m to 45m)
3 legged Tower (ranging from 45m to 120m)
4 legged Tower (ranging from 45m to 120m)
Rooftop

“ Since its inception, SACOFA has built and acquired more than 1,800 telecommunication towers throughout the state of Sarawak to cater to the network expansion needs of cellular operators and other organizations.

To help new operators roll out their wireless networks in Sarawak, we offer our completed towers to share among networks with our streamlined process. Our charging principle is based on a non-discriminatory and fair basis. “

OMH 1st half 2021 operation results :

Smelting
This business segment covers the operations of the FeSi and manganese alloy smelter operated by OM Sarawak and the Qinzhou manganese alloy smelter operated by OM Materials (Qinzhou) Co Ltd (“OMQ”).

The operations within OM Sarawak and OMQ recorded revenue of A$255.3 million for 1H 2021 as compared to A$272.1 million for 1H 2020. The decrease in revenue was mainly due to the
lower volumes of ferroalloys produced and sold in 1H 2021 as compared to 1H 2020.

OM Sarawak produced a total of 61,472 tonnes and 94,827 tonnes of FeSi and manganese alloy respectively in 1H 2021 (1H 2020: 96,508 tonnes of FeSi and 109,415 tonnes of manganese
alloy) and sold 55,360 tonnes and 101,944 tonnes of FeSi and manganese alloy respectively (1H 2020: 80,538 tonnes of FeSi and 99,833 tonnes of manganese alloy).

Total revenue contribution
for 1H 2021 was A$232.8 million as compared to A$256.1 million for 1H 2020. 4 FeSi furnaces have were shut-down since the second quarter of 2020 due to limited manpower at the Plant because of labour disruptions coupled with lockdowns and strict travel restrictions as a result of the COVID-19 pandemic. In addition, operations at the Plant were also temporarily suspendedfor about 1 month as a result of positive COVID-19 cases which also contributed to the decrease in production tonnages and sales volume in 1H 2021.

OMQ’s production was suspended after the shut-down of its 2 furnaces at the end of March 2020 for scheduled maintenance and furnace upgrading. A furnace transformer was subsequently upgraded from 16.5MVA to 25.5MVA to improve production efficiency and to provide the Qinzhou
smelter with added flexibility to produce either SiMn or HCFeMn. Full commercial operations for the upgraded furnace commenced in late January 2021 and the second furnace was subsequently restarted in March 2021. OMQ produced 24,684 tonnes of manganese alloy and 14,469 tonnes of manganese sinter ore in 1H 2021 (1H 2020: 10,140 tonnes of manganese alloy and 8,051 tonnes of manganese sinter ore) and had a revenue contribution of A$22.5 million for 1H 2021 as compared to A$16.0 million for 1H 2020.

The smelting segment recorded a higher contribution of A$40.5 million for 1H 2021 as compared to A$22.3 million for 1H 2020 predominantly due to the improved prices for ferroalloys, particularly
FeSi, which resulted in improved margins achieved, and the one-off gain from the de-recognition of financial liabilities realised from the redenomination of the MYR portion of the project finance
loan to USD. This increase was also contributed by OMQ having resumed full operations in the
first quarter of FY2021.

OMH's Sarawak factory capacity is much bigger than China factory. Most of the sales volume comes from the Sarawak operation which CMSB owns 25% stakes.

Quarterly sales reports (Smelting) from OMH:

OM Materials Sarawak:
1st Qtr 21
Ferrosilicon 25,029 tonnes
Manganese Alloys 50,996 tonnes

2nd Qtr 21
Ferrosilicon 30,331 tonnes
Manganese Alloys 50.948 tonnes


OM Materials QinZhou China:
1st Qtr 21
Manganese Alloys 3,419 tonnes

2nd Qtr 21
Manganese Alloys 14,635 tonnes

Telecommunication services is the biggest contributors to CMSB or sharing PBT RM 57 million (114.3 x 50% stakes) from the Associate, Sacofa. Cement operations ranked second or PBT 48 million.

AR 2020

Telecommunication division:
In FY 2020, Sacofa turned in a strong performance positing revenue totalling RM254.65 million (FY
2019: RM242.31 million) and PBT amounting to RM114.31 million (FY 2019: RM112.60 million).

Cement division:
Against this challenging backdrop, revenue for the Cement Division decreased by 21% to RM476.03 million in FY 2020 against FY 2019’s revenue of RM601.62 million. Meanwhile, PBT declined by 34% to RM48.44 million in FY 2020 against the previousyear’s PBT of RM73.11 million.

CMSB booked losses from the Associates, OM Materials RM 23.7 million in year 2020. The company will report high profit contributing from OM Materials from the 2nd half 2021 onward as FeSi prices rally.

AR 2020:
For the year under review, OM Materials (Sarawak) posted a weaker performance registering a 22% drop in revenue to RM1.52 billion in comparison to revenue of RM1.94 billion in the preceding year. At the same time, it recorded a higher loss after tax (LAT) of RM94.91 million in FY 2020, some 2,914% higher than the LAT of RM3.15 million registered in FY 2019.

CMSB doesn't own OMH but through 25% stakes in OMH's subsidiaries (OM Materials Sarawak & OM Materials Samalaju).

CMS is actively involved in the development and operation of a ferrosilicon and manganese alloy smelter in the SIP by virtue of its 25% equity stake in OM Materials (Sarawak) Sdn Bhd and OM
Materials (Samalaju) Sdn Bhd.

The remainder 75% equity is owned by a wholly-owned
subsidiary of OM Holdings Limited, an Australianlisted
vertically integrated miner, smelter and trader
of ferroalloys and ores. The project centres on the
development of a production facility with a 200,000
to 210,000 MTpa ferrosilicon capacity and a 250,000
MTpa to 300,000 MTpa manganese alloy capacity
(silicomanganese and high carbon ferromanganese).

Monetary. Share price will be back to the previous level as long as the existing businesses remain intact. Any bad news from KPMG report is regarded as one off item or kitchen sinking exercise.

KPMG's investigation may include the risk associated with 'Investment in Securities' with the exposure of RM 280 million as below :

Balance as at 30Jun 2021
- Investment debt Securities (level 2) RM 255 million
- Redeemable preference shares (level 3) RM 23.4 million

Fair value hierarchy

The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1 - Quoted prices in active markets for identical assets or liabilities,

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or

liability, either directly or indirectly; and
Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

Luckyboy88. I agreed that KPMG investigation is over amplifying by the market by reading the exaggerated press title and generating a similar emotion relating to Serbadk.

MPAS is not a bogus complex located in the middle east which can be easily fool by nonsenses. It's within the Samalaju Industrial Park, Bintulu, next to Press Metal factory.

https://youtu.be/MRIJsi2bXKQ

Similar with Serbadk? You must be kidding. Serbadk net borrowing more than 1 billion. CMSB total borrowing is about 910 million whereas its combination of cash or cash equivalent about 800 million (Investment on securities plus Cash in Bank). CMSB's net borrowing is merely 100 million.

Investment in securities consists of Income debt securities (unquoted) & Money market funds (unquoted).

With the current NTA RM 2.72, CMSB is able to crunch 35 cents per share of potential write off PPE in the worst case. Share price has crashed from RM 2 to RM 1 before it rebounded to the current level RM 1.3. What important is the existing bread and butter business remain profitable especially OMH, cement and Telecommunications and JV with state government.

The owner of the company was really pissed off to the previous management team after reading the remarks in the Annual Audited Accounts 2020:

1. The Accounts of Malaysia Phosphate Additives Sarawak (MPAS) was not audited by EY or CMSB external auditor.

2. Written off PPE of MPAS complex complex 2 and no ending delay in the commencement of operation of phosphate complex 1.

3.
Software implementation cost written off The Group entered into a contract for the procurement and implementation of an Enterprise Resource Planning (“ERP”) system with a vendor on 24 July 2019 for an amount of USD3.0 million (approximately RM12.4 million). Up to the reporting date, the Group has incurred RM7,244,541 in the implementation of the ERP system. However, the Group views that the vendor was in breach of the contract by failing to provide all the services and/or fulfill its obligations in relation to providing an ERP solution and system implementation. Consequently, a decision was made to stop proceeding with the implementation. As a result, the Group has written off the cost incurred for the implementation together with all direct expenses amounting to RM7,810,442 during the financial year ended 31 December 2020. Subsequently, on 27 January 2021, the Group received a letter of demand from the vendor for USD1,073,325 (approximately RM4.3 million) to be payable for various alleged work performed. These claims have not been provided for in the financial statements as Management views that these claims were not issued in accordance with the contract. Management, in consultation with their solicitors, is of the opinion that such demands are frivolous and the Group intends to contest such claims vigorously.

The worst scenario of KPMG report is scrapping the whole project of phosphate complex 1 capitalised under Assets Under Construction worth RM 600 million or RM 360 million losses or 35 cents per share for 60% ownership. It doesn't effect to future cash flows.

Turtle is walking up hill.

Heat up today. One day show?

Price up merely 4% ... Better than nothing. Hope the uptrend continues tomorrow..

Sarawak state election will be held before 4th Apr 2022. Phosphate price has increased 70% since last year. Hope their Phosphate Additive complex to commence operation in 4th Qtr 21.

Investors are longing for KPMG reports.

Teo is a good stabilizer but a novice chartist.

Fund managers don't dare to load up pending announcement of the KPMG investigation report by this month.

Similar way of projecting ASP of gloves. If it doesn't happen, the would repeat again and again until it becomes a real in one day.

Forecast by IB: Maintain 2021-23 CPO price assumptions of RM3,800/mt, RM2,900/mt and RM2,800/mt,

Wait for Nasdaq major correction to chase out hot money circulating in the Technology sector. If it doesn't happen, CPO 6k also don't help much. Bursa pool is really small nowadays.

AR 2020

Sacofa today remains Sarawak’s leading ICT
infrastructure company and the key driver behind
the development of the State’s state-of-the-art
telecommunications and information technologies
infrastructure. The Company has been accorded
the right to build, manage, lease and maintain
telecommunication towers in Sarawak. It has also
been granted “deemed native status” allowing it to
acquire native lands in the State for the construction
of telecommunication facilities.
PERFORMANCE HIGHLIGHTS
In FY 2020, Sacofa turned in a strong performance
positing revenue totalling RM254.65 million (FY
2019: RM242.31 million) and PBT amounting to
RM114.31 million (FY 2019: RM112.60 million).
As the major telecommunications infrastructure
provider in Sarawak responsible for over 90% of
mobile traffic in the State, Sacofa was deemed an
essential services provider and was able to continue
running its operations unhampered throughout the
initial MCO period.

OPERATIONAL HIGHLIGHTS
Sacofa played a key role during the pandemic to
ensure Sarawak’s telecommunication infrastructure
operated flawlessly. Internally, Sacofa was able to
adapt quickly to the new normal and stringent SOPs
by bringing its Business Continuity Planning policies
into play within hours of the announcement of the
first MCO. This was done with minimal disruption to
its business and operations.
Externally, Sacofa was able to coordinate with
its various partners and customers to ensure its
network remained uninterrupted by the demands
and needs during the pandemic. As a result of its
robust network design and planning, Sacofa faced
no major incidents or outages especially when
the network was most needed. The Company also
ensured it paid particular attention to essential
critical service locations such as hospitals,
emergency services and government installations to
ensure the network continued without interruption.
Given the network’s built-in capacity, retail service
providers or RSPs were able to upgrade their
networks based on user demands as and when
required.
In FY 2020, Sacofa continued to grow its asset
portfolio by constructing 84 towers across
Sarawak in support of its major customers,
as well as in line with State and Federal
Government initiatives. To date, Sacofa owns
and manages over 1,800 towers throughout
Sarawak with more than 11,000 km of fibre optic cable. Over 55% of the towers Sacofa owned have been fiberised and made 5G-ready.

Slowdown and washing..

Keep up the momentum. Top up all the way.

Not harm starting from buying 1 lot first to crack the wall built up by yourself.

You know the price would up from 4,5,6,7,8....and yet you still want to fight against yourself. Follow the trend and relax la.

Wait until 8.0 then you will be repeating yourstory again. Nothing new in the stock market.

MY is well known in tanking stocks throughout his bullish analysis...

CanOne is catching up with its peers only...long way to go.

Not to take it seriously.. My wild speculation only.