the margin and PAT growth will be slower, since election on the way, PM would likely keep the enforcement to be a looser to keep the b40 group happy....until election over and new governing team settled, no legislation for vap liquids, short term no good news....

damn...

@roykin77

listing day on the coming 23rd.

@JJchan

If what you mentioned materialises, big bonanza to those holding c3 and c4 expiring end august...

Need to wait till next quarter announcements to see how hard the additional enforcement on government side actually translated to any improvements to BAT's bottomline.

But from the management's commentary, it is neutral sounding at best considering that their commentary was prepared around this period of time and they don't write anything upbeat for future. Usually for company with possible good upcoming future quarter or good improvements, they will write it. Example like UWC, they mentioned about expansion and current production floor eating into normal corridors.

so i will say that upcoming quarter Q1 will still be somewhat meh....as the government need a little time to "warm up" to cracking down. Q2 would be a better reflection of whether turning point materialises. If by then still neutral tone, cannot be optimistic on government enforcement on black market ciggs....

JJchan, how you derive the 30%?

i don't think will top 750m revenue.

siao la.....BAT is not splitting and will not do so in the foreseeable future....

When price was above 50 also didn't split, why want to split now? No need to create liquidity for this counter....

you target the wrong counter from the beginning, should've asked your fellow apes to rush into kossan, not top glove....top glove market cap so large and trading volume/value also large....compare against kossan, get what i mean??

you didn't plan your strategy for you and your fellow apes....a lot of sad fellors you've got to console....too bad....

johotin

please stop this, you may kill a lot of small time investors....

look, i understand you are approaching 50k members, but realistically speaking, you can't move the stock much when :
1) the short position is small 4% max (not gamestop level of short position 140% of issued shares)
2) glove short is not concentrated on topglove, but also distributed among the other big 3
3) even if everyone of your 50k members pour in average rm1000, that is only rm50 million...50 million easily absorbed by normal daily trading...
4) how much more do you think retail players can put in realistically? do you think all your fellow members can keep doing this for at least another 10 trading days?
5) to really move topglove, you need more than 10 trading days of your members pumping it...how much money do they have....please don't tell them margin sailang....
5) top glove is very liquid

only big funds can truly help your cause, not retail players....if not a lot is going to get burned and can you live with that conscience?

nice initiative, but don't expect the same outcome, our retail participation cannot reach to that kind of level of bursabets.

for it to have a huge swing, need to target on companies with lower capitalisation and free float shares....topglove just too liquid for bursabets to push up....how much retail money can flow in with such economic situation? we no stimulus free money from government in US.

this company will just want to squeeze profits out of this siltera for the short term during this period of chip shortage, they have no management capability nor operational expertise to fully utilise and grow siltera further into the future....we have quite a number of upstream/downstream semiconductor related companies, but none expressed interest because they know the extreme difficulty to run a fab efficiently, to continuously invest capex and earn a profit at the same time.

the only advantage dnex have is political connection, will be very disappointed if siltera sold to them...the current bigger folks running this company is already struggling for so long, what makes dnex better....nothing....

just let other companies with real related capabilities and capacities to buy siltera la....at least there will be a more sustainable future among the related companies partnering with siltera...

the glove frenzy some months ago in bursa....just x10 in china....and the best thing is the retail participation is increasing....the valuation there is just pure crazy for intco....

which company big boss actually take a large chunk during private placement...hardly any right?

Karim leads by putting his skin in the game, no joke for him. And being oversubscribed by almost 2x, shows that those big financiers see good juicy profits in the future until rebut rebut grab....

If Karim and gang knew this earlier, could've enlarged the PP to 15% to build serba's base for even bigger contracts in the future. The issue now isn't about running short of cash to run current operations, it is now about building working capital for CURRENT SOON TO START big projects.

Go read the IBs commentaries, their concern about future dilution of future private placement for future larger projects 2 years done the road, not working capital dry up/company making losses.

Serba is a rare gem la....company this size with complex operations, yet consistent increase in margin....i think Karim wished that the company was larger scale, then he don't need to worry so much about book building. In short, maybe order book growing too fast for the company to digest!

there would likely be more middle east related contracts coming in the mid to long term...

this counter is not easy to understand as their operation scale is large, diversified, international and complex, you really just need to have confidence in Karim and team.

part of the reason why this counter quite depressed due to being lumped into oil and gas category although less than half of their operations are oil and gas related...

of course no movement la....for those wanting to invest, wait for PP completed and buy at 10% lower price. Also waiting to see the pp response and who are the big investors.

If pp response very good, then confidence in the counter better as these big players see better than we small fry do.

sifu philip also in this counter....he kaki fundamental+business growth....means something in the future.

at worst case, downside is limited, don't think will go below 1.20.

Karim already expressed interest in personally taking up a portion of the private placement....there will be more projects coming and need to lower the gearing before getting more financing for future larger contract bidding.

But got some risk for another book building exercise if clinched another large deal, like the one in abu dhabi.

Revenue growth is nice, but should focus more on the net profit. With the higher sales mix of KYO and without too much of their vape earnings, i believe it is more product to see their net profit for the coming quarter to not exceed 80 million, more likely around 75 million range.

With that kind of net profit, the best reference of dividend distributed will be quarter ending jun'19, DPS of 26 cents. However, i'm being conservative. If truly net profit is able to exceed 80 million, that will be another round of rerating due to true sign of bottoming out. And with genuine harsher crackdown against contrabands, there are reasons for further optimism 6 months down the road.

Philip, after spending a few hours last weekend on the rough overview of scib, kpower, and serba dinamik, i gained some sense of your bullishness towards them. Your view is proven very right by your return on all these 3 counters, especially scib and kpower.

Just some rough thoughts, i didn't go deep detail and industry understanding to your level :
1) Karim is genuinely one of the rare role models of bumiputra business leader, more like syed mokhtar + ytl + ananda krishnan combined, with a hint of steroids. Really respect his ability in undertaking such complex operations and business deals and continue to grow serba's revenue and maintaining the margins. I read your article on your reasonings in investing into serba/scib/kpower 3 times over the period of 2 months, truly like you say, if Karim is non bumi (and maybe a less BM company name like Omni Dynamics?), there is less racial bias discount and probably a premium for company leader like this. I don't even think Tim Cook of apple can handle a company like serba dinamik.
2) judging by the turnaround of scib and kpower, the ability/connection of Karim and gang to win+inject contracts is bearing fruit. His management experience in serba dinamik really put into overdrive for the turnaround of 2 counters, a good showcase of Karim's deep abilities/connections.
3) 1 real surprise is their vendor acquisition transparency. For most big listed companies, to be their vendor, either they come to you, you have to market very hard to give your proposal, or you have connections. However for serba/scib/kpower, as long as you have the valid documentations, you can register through their website. A very good example for many companies actually.
4) i think serba dinamik have a 50% chance of requiring another private placement if the knock on effects of the current abu dhabi deals bring in more future contracts in the middle east.

However, i don't understand :
a) SCIB and serba dinamik is synergistic, but can't figure out how kpower fits into their bigger picture. Kpower started out as a specialty fabric company and after Karim take over, and now expanding into infrastructure/EPCC like activities.
b) What is the reason that owning 2 more companies, injecting some contracts into them instead of just take it all under serba dinamik wing?
c) Is Karim trying in another way to prove to the market that serba deserves better valuation by getting people's attention into scib/kpower then relating it back to serba dinamik?
d) Would it be a good time now to invest into serba or wait till the private placement is completed?

Appreciate your insights on this.

i was the one that harp on US taking over supermax months ago leh....

anyway, here are my counter arguments as i'm in the opinion that you're looking into it too much :
1) stanley thai and wife transferred their holdings into sdn bhd merely just an exercise to conceal their holdings. The transfer happened not too long after stanley got acquitted. So knowing how their names appear in the list of top shareholdings, another lawsuit to stanley family is a blow to the reputation of the company, even though no direct execution in company now. So unless got good memory, unless someone pay for a company search of supermax sdn bhd, stanley family will no longer appear in the list of top shareholders. If US really want to buy supermax, even without the sdn bhd, they can just approach stanley + wife personally, just 2 persons, just 1 additional entity compared to the sdn bhd.

2) supermax is planning to list in singapore in the near future. The sdn bhd is probably a facade to hide the true holding % of stanley family in listed supermax singapore.

3) US won't buy supermax now even if they have such intentions. They will wait a year or 2 after the covid pandemic truly subsides and the strategic reserves restocking dies down. By then, with the increased players in the market, surely there will come a time similar to few years ago when the glove makes were fighting to maintain market share. Only then is the best time to buy up supermax with a less lofty valuation.

4) as for the stop of share buybacks, i guess they are smart enough to realise that no point fighting the market sentiment. There is a reason why supermax wasn't in JPM's radar and probably quite a number of large institutions earlier because of the court case with stanley, creating a lot of uncertainty/distraction for the company's future. (another reason why now sdn bhd their shareholdings) Their foray into contact lenses also raises some added execution risks compared to the other big 3 pureplay.

i would hazard guess with further confidence that the foreign money is not in the glove game anymore....

or it is somewhat an indirect political play to malaysia because of :
1) malaysia not really siding much towards US
2) US pissed off that they are the wrong end of the market game where they are now paying the premium (much of the time, for quite a lot of products, other markets are paying premium to US). In short, i think US sour grapes, so just throw the dumpster and hoping it will stick and stink around.

Despite what US say about free markets, their governments will and shall have a hand when it displeases them. But they are smart with playing the legal game to make it legitimate.

Contrast with mercator and sri trang, their sell down quite subdued.

agree with the irrational exuberance part

now this is embarrassing for malaysia....

to be fair....the plateau of testing in US is quite true, see the john hopkins tracker :
https://coronavirus.jhu.edu/testing/individual-states

But more hospitalisation does create more demand for glove, just need to find credible data of covid hopsitalisation rate in US.

The secured revenue part....there is some basis for it actually. The current que is there because almost everyone all hail mary put in orders as no one truly sure when the pandemic can end. So on the safe side, just keep the orders there with a small deposit. If the pandemic can truly subside faster, they can forfeit their order if they want to and forfeit part of the deposit.

On the other hand, after covid subsides, there will be a rush for reserves stockpilling. So the high ASP can sustain just a little while more...

In all, don't be overly bullish because this report does mean that foreign money more likely not keen in participating the glove game anymore. There are some foreign political element to it (i think), but local money just can't push the stock too much.

more road blocks and patrolling will be in place....contraband supply suddenly restricted and legal supply intact...

likely that old stock of contraband running low and low freshness....more upside to be seen starting march....

supervisor didn't review...hahaha.....

approve publish je...

The title should relate to glove sentiment, not glove demand. Few million additional pieces of glove demand during state of emergency is like a drop of water in the pool for the glove market....

RSS volume a trickle now....

True that if short positions are closed, the price can jump. The reverse could also be true if these players want to hold on to their positions longer as there is still some distance towards the 4% limit....

@Simon_khoo

not everything due to IB...they don't have this much volume to play with.....

partly sentiment swing due to another possibility of lockdown which depress consumer related stock and chase back medical related counters....

BAT HQ boss, since the price so low now, just privatise la....you give 25% premium, more than half support you and you can join your fellow friend jti and say bye bye to malaysia bursa...keep the dividend to yourself....

the short volume still about a quarter of total volume.....got quite a lot of momentum....maybe should focus on those that don't have rss like carepluss/comfort/rubberex....

nevermind la....treat this counter as FD....don't monitor daily.....

can sleep soundly and get dividend at least 23 cents this coming quarter....

will slowly crawl up....

still so much rss volume.....depress sia.....

the owners should just privatise it since no one in the market see the deep value...

thumbs up for the deep analysis, will re read again :)

surprised that when government gave them such big loans to tide them over covid crisis and add together with this monumental crash incident that happened within a year apart from another due to management negligence, the government didn't request for some board seats as oversight for at least 3 year period for boeing to get their act together....

maybe some insider saw their year end accounts, the number not fantastic, so let out news to sell??!!

Already well beyond the breaking point, not at the breaking point...

PM actually kind of panic a bit when the sabah cluster causes the main avenue for outbreak. But as time sets in, he realises that the situation is very favourable to him as it serves as a strong disincentive for snap elections.....

That's why don't want hard clamp down, giving him plenty of space and time to position himself politically. But pity Noor Hisham and team, getting pushed beyond the brink...even he is starting to talk a little nonsense, i guess the fatigue is setting in...worse were the lives lost, it is 1 too many everyday....

ATA's relationship with james dyson's family really helped a whole lot. But catalyst was when VS did something careless by leaking out some of dyson's engineering info, causing dyson to terminate their contract.

I have an ex-colleague that jumped ship to ATA, he mentioned the scale of full turnkey project work for dyson with multiple warehouse and production lines fully loaded with dyson related goods.

All i can say is that dyson margin very good, i work in a somewhat related industry and my workplace is their teir 2 supplier for just a few small vacuum parts. Margin is sweet compared to single digit % that EMS players usually struggle with.

esos at current market price....quite fair actually.....some more can enlarge share capital with cold hard cash.....

be careful with this counter, glove market so damn good, but the financial performance of this counter really horrible....genuinely pure goreng anything above 1.20

although this counter is cheaper proxy to other main glove counters, be very careful.....set your stop loss diligently....

if want to goreng glove, goreng at careplus safer than this counter....just take a few minutes compare the financial performance....further got pending court cases....

precisely because free float is limited, any price gyrations (favourable or unfavourable) will likely be amplified....double edge sword....

BAT HQ should just privatise this stock, keep the dividend yield to themselves and save some admin cost on reporting/listing requirements....

but cannot deny the uncanny "coincidence" that kenanga issue sell call when their CW is less than a week to expiry...

bad image, conflict of interest...

Drop due to possibility of government change again....then got risk of customs policy change lagi....

@stingray_ea

37 cent dividend?!!

I'm feeling will be around 27 cents.

Are you estimating that the profit to double?

Seems lofty estimation...but interested to know how you come up with such estimates. Care to share?

Philip, you mentioned before that you bought a position into SKP because of their exposure to dyson. What makes you chose SKP instead of ATA?

i think the dividend king for the next 2 quarters would be top glove....but for long term dividend king, BAT is one of the top though....

those got risk appetite, can in now....

but can still stay side line and come back after mid january when the rss tickets volume go down...still a bit falling knife situation....be very careful

not exactly a good time now, wait till the rss tickets subside....will take at least 2 weeks to fully digest...

all bad news out, come new year, those with risk appetite, can come trade, got 1 last hoorah swing potential....

close 14 for the year....too bad no 15 or 16.....