who cares?

Quite close to my TP (refer to my earlier post).

dayang = die young

Boeing Co (BA.N) reported an 18 percent increase in quarterly profit and raised its full-year core earnings forecast for the third time, reflecting booming commercial aircraft demand and increasing profitability in its defense business.

http://www.reuters.com/article/2014/10/22/us-boeing-results-idUSKCN0IB1AC20141022

Let's look at some numbers for MMSV at a conservative price of RM0.50, to determine whether it is just a speculative counter or otherwise:

1) Market capitalization will only be RM81.50mil (USD25.00mil), a very cheap acquisition target for large multinational LED manufacturing companies looking for vertical integration, i.e. controlling the full value chain.
2) High economic moats/competitive advantage/technological edge evident via high net profit margin of 24.50%.
3) Trailing 4 quarters P/E of only 11.74x, very cheap for a high growth technology stock (see point 4).
4) Y-o-y net profit growth of over 60.53% (estimated based on 2q 2014 vs preceding year).
5) PEG of only 0.19x, still a good margin under the PEG for growth stocks at 1.00x (anything under 1.00x is considered undervalued).
6) P/B of only 3.33x compared to 5x of Inari.
7) Surprisingly, the counter offers a dividend yield of 2.00%, very generous for a small high growth tech stock.
8) ROE of 28.40%, only trailing Inari and Datasonic in my list of technology manufacturers.
9) Price of RM0.50 still at a 16.66% discount from peak.
10) 12.44% of its market capitalization is net cash.

All these based on assumption share price is RM0.50. In conclusion, this company is backed by very strong fundamentals and should appeal to long term value investors/fundamentalist. It is not just full of hot air.

If the company is able to sustain its growth momentum in the following quarterly results, I believe the company should be valued at at least RM0.77 pegged to PEG of 0.30x (71% upside from current levels).

Disclaimer: I am an owner of MMSV shares with entry cost of RM0.21.

Oct 18-24, 2014 | FocusM
17
MAINSTREAM
the world’s biggest LED producer; thus
by having some of these MNCs as our
clients, we can be quite positive about
our growth,” says Elsoft group CEO Tan
Cheik Aik.
Though MMS Ventures and Elsoft
may indirectly be competitors, espe-
cially in the local market, MMS Ventures
CEO Sia Teik Keat says the company
would not consider joint ventures or
strategic alliances with the latter unless
a customer asks for both their services.
Elsoft’s Tan, meanwhile, says the
company has a good relationship with
MMS Ventures and considers any com-
petitive aspect insignificant, as Elsoft
focuses on LED testing activities while
MMS Ventures covers segments such
as producing machinery, systems and
inspection testers for themanufacturing
line.
“Providing tester solutions in the
LED industry covers only 30% of our
total business portfolio,” says Sia. None-
theless, Sia and Tan are optimistic on the
LED industry, as are market observers
and global players.
“Market demand in this area [LEDs]
is still relatively strong, particularly from
the automotive industry,” RHB research
says in a Sept 5 report. It expects Elsoft
to grow, with orders to date amounting
to RM30 mil.
The Semiconductor Industry Asso-
ciation (SIA), representing American
leadership in semiconductor manufac-
ture and design, announced on Oct 6
that worldwide sales of semiconductors
had reached US$28.4 bil (RM92.61 bil)
for August, an increase of 9.4% from the
US$26 bil recorded a year earlier and
1.3% higher than the preceding month’s
US$28.1 bil.
“Demand is strong across nearly all
semiconductor product categories and
the industry has now posted sequential
monthly growth for six consecutive
months,” says SIA president and CEO
Brian Toohey. MIDF Research, in an
Oct 7 report, says sales are expected to
perform well for the remaining part of
this year, supported by strong growth in
the Americanmarket.
Smart-device
market expanding
On stiff competition from overseas
markets especially China and Taiwan,
Elsoft’s Tan says the company is shifting
its focus fromgeneral appliances for the
LED segment in these markets to smart
devices and the automotive industry.
He says smart devices such as
smartphones are a growing market and
is confident this market will expand in
line with the technology trend. Elsoft’s
business focus comprises smart devices,
the automotive industry and general
appliances.
“The World Semiconductor Trade
Statistics organisation now forecasts a
6.5% yoy advance in global semicon-
ductor sales for 2014,” TA Securities
Research says in a recent report. “This
will be driven by the smartphone, tablet
and automotive segments. With a better
industry outlook on the cards, we be-
lieve this bodes well in terms of demand
for services from local semiconductor
manufacturing companies.”
On the other hand, a report from
CIMB Research says communications
revenue is the biggest contributor,
making up about 29% of the Malaysian
semiconductor sector’s revenue.
“This is not a surprise, given the seg-
ment has grown steadily in recent years,
driven by the increasing penetration of
mobile devices such as smartphones
and tablets, compared to other market
segments,” the report adds.
The RHB Research Institute says
Elsoft has taken measures to diversify
into medical equipment by capitalising
on its core competence in embedded
control systems by applying them to the
medical-equipment market.
“Based on our channel checks, the
pricing of each of these machines varies
from as low as RM2,000 to as high as
RM7,000. This new income stream, in
our view, will help spur the company’s
FY15-FY16 earnings growth,” the re-
search house adds

On Focus Malaysia this week:

Sunny outlook
for MMS Ventures,
Elsoft Research
Both Penang-based companies which provide test
solutions for LEDs post strong Q2 financial results
MMS
Ventures Bhd
and Elsoft Research
Bhd, both in the
light-emitting diode
(LED) tester busi-
ness, have reported
strong earnings in
their latest financial
results, boosting
their share prices as
analysts have an optimistic outlook for
the industry.
Early this month, MMS Ventures
and Elsoft shares hit a year-to-date high
of 62 sen and RM1.79 respectively. The
recent selldown saw MMS Ventures’
share price correct to close at 40.5 sen on
Oct 15 – still more than double the 19.5
sen at the start of this year, while Elsoft
ended the day at RM1.20, up 76.2% from
68 sen on Jan 2.
Commenting on the good run since
July, MMS Ventures group corporate
finance officer Lim Phaik Hoon tells
FocusM
the uptrend has been due to its
stellar 1H2014 financial results.
MMS Ventures is a holding company
with subsidiaries Evolusys Technologies
(Malaysia) Sdn Bhd and Micro Modular
System Sdn Bhd involved in the man-
ufacture of industrial automation sys-
tems, design of die sets, jigs and fixtures
as well as development of computer
software.
Elsoft provides products and services
including advanced electronic-system
design, system-software engineering
and algorithm development.
Both Penang-based companies pro-
vide test solutions for LEDs in all kinds
of electronic and electrical appliances,
and their similarities are reflected in
the strong Q2 ended June 30 financial
results.
MMS Ventures registered a 64%
jump in net profit to RM3.26 mil from
RM1.99mil in the previous correspond-
ing quarter. Revenue increased 31.38%
to RM11.64 mil fromRM8.73 mil.
Elsoft reported a 32.31% increase in
Smart devices such as smartphones are
seen as a growing market
MMS Ventures’ headquarters in Bayan Lepas, Penang
by Ooi Chia Shen
net profit to RM6.96 mil from RM5.26
mil the year before, on the back of a
37.90% rise in revenue to RM15.16 mil.
Both companies attribute the
improvement in their earnings to in-
creased orders for machines from the
LED industry that have translated into
higher sales.
Having switched its focus from
semiconductors to LEDs in the past two
years, MMS Ventures’ Lim says the in-
dustry has been on a robust trend since.
She is upbeat the favourable outlookwill
continue.
According to the last financial re-
sults, the domestic market accounted
for 53.63% of MMS Ventures’ earnings
while the rest came fromexport markets
like the US, Europe, Australia and Asia.
Elsoft attributes 70%of its total earn-
ings to the localmarket, with the balance
fromTaiwan, China andThailand.
“Most of our major clients are
multinational companies and Asia is

Taiwan Semiconductor posts record profit

TSMC, the world's largest contract chip maker by revenue, said Thursday that net profit in the three months ended Sept. 30 totaled 76.34 billion New Taiwan dollars (US$2.51 billion). It was up 47% from NT$51.95 billion a year earlier, beating its previous record of NT$59.70 billion in the second quarter and exceeding analysts' estimates.

http://www.marketwatch.com/story/taiwan-semiconductor-posts-record-profit-2014-10-16?reflink=MW_news_stmp

ong saja kaya

Hi mc121534, what is with Tay Beng Hock? Care to enlighten us?

The Board of Pintaras Jaya Berhad ("PJB") is pleased to announce that the Company's wholly-owned subsidiary, Pintaras Geotechnics Sdn. Bhd. has, on 10th June 2014, received a Letter of Award dated 9th June 2014 from Quantum Quest Sdn. Bhd. to undertake earthworks and piling works for a proposed building project at Section 87A, Jalan Tun Razak, Kuala Lumpur. The said works is to commence on 23rd June 2014 with a completion period of 15 months. The contract is valued at about RM32 million.

The said contract is expected to contribute positively to PJB Group's future earnings.

None of the Directors or Substantial Shareholders or persons connected to the Directors or Substantial Shareholders has any interest, directly or indirectly in the said contract.

Queue!

30:70

This company is the next Vitrox.

Overall much better operating results for the group. However, net income decreased slightly due to high net income base for the previous corresponding quarter 2013 due to other income of RM6.6mil in 2013 compared to RM0.3mil loss in 2014. Besides that, non-controlling interests in the power divisions translated in lower net income attributed to shareholders.

Other positives are a pickup in capital expenditures, i.e. Purchase of property, plant and equipment RM9.190mil.

Negatives is an other comprehensive income (OCI) loss of RM13mil from Foreign currency translation difference for foreign operations RM5.980mil and Fair value changes of available-for-sale financial assets RM7.565mil. Both of which are reversible.

Drop in net income is mainly due to non-cash RM4mil accounting treatment for ESOS. It is just an accounting treatment, what you have to worry about is the dilution of shares, i.e. 7.2mil new shares by the directors once exercised. However, take comfort that the directors' interests are more aligned to the company's success as their compensation is dependent on the company's performance.

Another thing to worry about is the drop in dividend payout. But you should not worry too much about this as the company has record orderbook and probably anticipating some new projects/ capital expenditure needs thus paying less dividends.

I will buy if the share price drops >5%.

Esos was granted as below:-

The Board of Directors of Pintaras Jaya Berhad ("the Company" or "PJB") wishes to announce that the Company has offered the options under Employees' Share Option Scheme to eligible persons of PJB and its subsidiaries, the details of which are set out below :-

(a) Date of offer : 21st March 2014

(b) Exercise price of options offered : RM2.83*

(c) Number of options or shares offered : 7,240,000

(d) Market price of its securities on the date of the offer : RM3.12

(e) Number of options or shares offered to each director, if any :-

Name Designation Options Offered
Dr Chiu Hong Keong Managing Director/Chairman 1,500,000
Khoo Keow Pin Executive Director 1,200,000
Khoo Yok Kee Executive Director 1,000,000
Chiu Wei Wen Executive Director 750,000

(f) Vesting period of the options or shares offered : 0 - 4 years from the date of offer.

Dividend ex date 22/5/14.

Divide the quarterly loss by malaysia's population of 30mil, each one of us can get RM13.

I think what Mr Koon is trying to point out is that a corporate exercise such as giving out free warrants can do wonders for a company like MFCB despite the dilutive effects in EPS.

Not only will it improve the investing/trading participants of the shares through a higher leveraged proxy, i.e. the warrant, it will also provide a boost to the company's mother shares through some much needed attention as it is currently trading below NTA and single digit P/E.

Yes, no real value created for shareholders in the immediate term. However, with a higher share price, the company will be able to raise more funds in the future through rights issuance or private placement should the company require the funds.

Further down the road, the conversion of the warrants, if in the money, will provide the company with some extra cash for Capex.

Share buy-backs, special dividends and share splits are alternative options for rewarding shareholders which also do not create any real value for the company. But in the case of MFCB, something like a free warrant might just do the trick to give it the boost it needs for the shares to trade closer to its intrinsic value (depending how you value the company).

To compare MFCB which has diversified businesses that are mainly defensive in nature with MBSB which is very cyclical during boom and bust periods is absurd.

Thank you Mr. Koon for your generous sharing. I really do hope I get the chance to meet you. Perhaps at MFCB's upcoming AGM.

Greetings Mr. Koon, I notice that you appeared on the 30 largest shareholders list for MFCB with 3,108,400 shares or 1.28% stake on the 2013 annual report published recently. You did not appear on the 2012 report meaning that you acquired a good quantity of the shares in 2013. From your postings, I have gathered that you mainly buy stocks that have tremendous growth potential (e.g. Jtiasa).

For MFCB, their power division via their 2 current PPA (China and Sabah) will not be growth drivers for the company as the tariffs are somewhat fixed with only FX fluctuations and raw material prices such as coal influencing the P&L. In addition, the Sabah PPA will be expiring soon.

MFCB's other divisions such as minerals division is growing albeit at a slow pace with its new plants only completing by q4 2014 with capacity coming online thereafter. Its properties division on the other hand is quite uninspiring, i.e., during my visit to the Malaysia Property Exhibition (Mapex) recently, I took the opportunity to ask some of their sales staff on new launches and the sales of existing developments.

Some of the key growth areas of the company I am able to identify are the Don Sahong Dam Projects in Laos which has received much opposition for its perceived threats to the Mekong River. I do take comfort though that the Lao Government have given the greenlight for the project. However, earnings contributions are expected to come in 2020 at earliest, seeing that the project is slated to complete in 2019.

The other key growth area is the concession for rubber estates in Cambodia of which the rubber trees will take 6 years to reach maturity.

Both projects are huge and entails large Capex spending over the next 6 years or so. One of the areas where MFCB which already has a healthy cash pile can tap into is its vast landbank in Sepang.

Dear Mr. Koon, as you said that you are willing to teach those who are willing to learn how to fish. I would greatly appreciate if you can share some of your insight into the company of which I and other readers can benefit from your perspective of analyzing a company.

Thank you.

Based on my DCF calculation, considering 15% growth of FCFE for 2014-2016, 10% growth for 2017-2019 and 5% growth thereon and a discount rate of 14% (10 year MGS+10% market risk premium), the intrinsic value of Willow is RM1.13 indicating upside potential of 36.89%.

Kia si lang is right to describe KSL. The directors of the company doubled their remuneration package from RM12.6mil in 2012 to RM24.3mil in 2013. They paid out approximately 13% of net profits to 4 directors. This is on the back of 69% revenue growth and 53% gross profit margin growth.

Mr Koon Yew Yin has appeared on the 30 largest shareholders list in the annual report 2013. He did not appear there last year:

10) TA Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account for Koon Yew Yin 3,108,400 1.28

CCMDBIO is better.

Switch to OSKPROP-WC, trading at premium of 3% to mother.

Don't panic. Profit is way better compared to last year corresponding quarter. It's just that they recorded less deferred tax assets in respect of unutilised reinvestment allowances which is non-cash. In fact the unutilised reinvestment allowance of the Group available indefinitely for off setting against future taxable profits increased to RM450 million compared to RM410 million last year. Please correct me if I'm wrong.

Loss due to RM0.9 million non-cash executive share scheme(ESS) option cost expensed off and one off cost relating to financial and advisory cost of RM1.5 million for e-pay Asia Limited acquisition.

Current Year's Prospects
The group’s cumulative net profit for the twelve months to 31 December 2013 increased by 18.7% to
RM5.2 million (2012 RM4.4 million). This was despite RM0.9 million non-cash executive share scheme
(ESS) option cost expensed off and one off cost relating to financial and advisory cost of RM1.5 million for
e-pay Asia Limited acquisition. The group is now focused on strengthening its product offering and
geographical footprint in Malaysia via the proposed acquisition of ePay. It is the group’s intention to
achieve operational synergies and cross selling opportunities between the two companies to generate
higher returns and profitability.
Apart from the e-pay Asia Limited acquisition, the group is slated to launch several new initiatives in the
coming quarters such as internet payment services as well as directly contracting with merchants for the
provision of card payment services via a TPA model. While this launch will initially be in Thailand, the
group intends to expand this to its other operations in Philippines and Malaysia. These initiatives should
provide the group with organically driven growth over the next few years.
GHL group is optimistic about its 2014 prospects. With the ePay acquisition and the present investment
in future growth opportunities, GHL group is well placed to take advantage of the overall shift from cash
to e-payments in ASEAN.

"Seek Ltd. said it would buy the remaining shares in JobStreet Corporation Berhad's online employment business, continuing its push into Asia in a deal valuing the target at 1.73 billion Malaysian ringgit (US$523.5 million).

Australia's biggest online job ads company said its majority-owned subsidiary Seek Asia would acquire the 78% of the JobStreet business it doesn't already own. The deal is subject to regulatory approvals in Singapore and shareholder approvals. JobStreet operates in Malaysia, Singapore, Indonesia and Vietnam. " According to The WSJ.

Although in terms of comparable valuation (P/E & P/B), the price does seem fair, I will still vote no as a minority shareholder. Seek currently has 22% of the company and are targeting for the remaining 78% granting them full control. Thus, a control premium of 20% over the average 20 days closing price should be included in their offer, valuing the company at RM2bil or RM3.02 per share. I hope that Fidelity Worldwide Investment (FIL Limited) and other shareholders will share my view.

Sell EVERYTHING

The world might end tonight

Here comes the doomsayers!

Sad reality

PBA was named water services operator for the year by the Ministry of energy, green technology and water in the inaugural KeTTHA Industry Awards on 21/11/2013.

PBA's key performance indicators (KPIs) in 2012 include:-
1) 100% urban and 99.7% rural supply coverage;
2) Treated water quality that complies with the "National Water Quality" standards set by the Health Ministry;
3) 17.6% non-revenue water (NRW) the lowest in the country as compared to the national average of 36.4% (less than half);
4) The lowest domestic tariffs for consumption of up to 35,000 litres per month. However, the lowest domestic tariffs have unfortunately led to the highest per capita consumption in Malaysia - 302 liters/capita/day; and
5) 92.4% bill collection efficiency.

http://www.thestar.com.my/News/Nation/2013/11/14/Penangs-water-management-services-is-the-best.aspx

PBA has the least NRW and is the best managed water utility company in Malaysia by far. It also charges the lowest tariffs in the country, all while making a healthy NPM of >10%. Good net cash position and very healthy cashflows.

It also has a very sound, transparent and accountable management team. Shareholders will definitely be rewarded.

According to http://www.salaryexplorer.com (which I highly doubt their findings and no clear explanation to their methodology is provided), pilots are the highest paid in Malaysia with salary of RM35k per month!

All this while MAS is bleeding money at nearly 10% NET LOSS MARGIN! Every RM1 they make they are losing RM0.10. Why should you continue doing business at that rate of losses which has been dragging on? The last time MAS was profitable was in 2009 and even then, net profit margin was a paltry 4.2%.

Increasing charges at overseas airports shouldn't be an excuse. All other airlines are subject to the same costs. Weakening of MYR isn't a good excuse either as it should have been hedged in advanced. For an airline trying to get back into the black, "BOTH fuel & non-fuel costs increasing by 16%" is simply not acceptable. Fuel should definitely be hedged. The treasury department too distracted by stewardess?

MAS is a poor example of how a full fledged airline should operate in such a competitive environment. Tough and unpopular measures should be taken to try to salvage any hope of recovering. SIA's net profit for the quarter ended Sept 2013 rose 75% y-o-y albeit the bad result last year. Among other things, MAS should really look at its staff costs. The unions are one of the biggest drags on the company. Now that the election is over, if THEY are really serious about turning around the company, THEY should look at reducing the number of staff and their salaries. All quarters should bear some responsibility and sacrifice for an ailing company.

They say don't worry...still have cash of about RM5bil. But where did this cash come from? Rights issuance and bond issuance....takers are mainly GOM (Gov of Malaysia). So in conclusion, everyone are the losers! I would be happier if they liquidate the company right now, return all the money to lenders and shareholders and spend it better elsewhere.

Despite the company's prospects, I have sold my shares already. To be blacklisted like that, and being only 1 of 5 companies blacklisted is bad news. Not child labour but on the basis of severe damage to the environment. This also means that their business model is not sustainable in the long run, i.e. depletion of natural resources due to lack of proper planning and controls.

Just a question, I thought 1997 style Asian Financial Crisis coming?

Japan is going to host the 2020 Olympics! Demand for timber will increase to support the construction. Kudos to those who held!

How come he did not see it before the correction?

When the market drops, out comes the doomsayers like this guy, all riding on the opportunity to grab some headlines.

Don't worry, I am sure alot of local fund managers are clearing some of their positions for the Raya break as well. They will be back with a vengeance.

To all the doomsayers out there, do you think the foreign investors do not already know what Fitch just reiterated? When doing a top down analysis of Malaysia, which I think most funds do, they already know what they are getting themselves into. Debt to GDP, shadow banking, government guarantees, personal loans, high corporate borrowings, etc. They already take these into consideration when investing, a report by Fitch downgrading Malaysia's outlook is no surprise. It only gives them a chance to invest more. Plus, the Ringgit is cheaper too. Now, let's see what Bernanke does!

http://www.reuters.com/article/2013/07/31/japan-economy-housing-idUSL4N0FZ1CB20130731

Japanese housing starts is up for the 10th straight month!

Hmm..I did mention it is caused by impairment on goodwill:

yktay1 The higher expenses is mainly due to impairment losses on goodwill. Can someone shed more light on this?
26/07/2013 02:18

Nobody listened? Right thing to do was to buy more :)

The Group’s current quarter profit before tax of RM4.58 million declined marginally as compared to RM5.15 million in preceding quarter mainly due to the treatment and recognition of impairment loss on the assets held for sale of some RM0.80 million.

Can someone explain pls?

The higher expenses is mainly due to impairment losses on goodwill. Can someone shed more light on this?

"RWorley won the RM1.07bil job in January 2011 in a consortium with Muhibbah Engineering (M) Bhd. The project involved engineering, procurement, construction, installation and commissioning works."

The difference is RWorley's license got suspended while Muhibah was awarded a license.

Visit to their showroom for the launch of the final phase of YOU City (YOU Vista Tower) indicated that their smallest unit priced at 560psf for 512 sq ft units have been sold out.