Posted by necro > 2013-02-01 17:40 | Report Abuse

bro wat abot CUSCAPI

Posted by necro > 2013-02-01 19:00 | Report Abuse

Bro kcchongz u method seem like Warren Buffet but do you company distribute the profit as dividen or growth of stock price?
I wondering if those stock below is GROWTH STOCK or not,need your opinion...
OLDTOWN so many ppl supper even at 3am...
BJFOOD with Kenny Rogers and Starbucks stall will open more..
PANTECH
Cuscapi as KFC & PIZA HUT restaurant will be open more in this coming years i see each reastaurant have 4 petty cash which Cuscapi name appear...wondering more kfc n pizza restaurant open..

Posted by Desmond Liew > 2013-02-01 20:44 | Report Abuse

TQVM for your unselfish altitude to impart fundamentalist knowledges to us & i hardly see such a good kind Guru like u anymore. I sincerely salute u !!

May i know how do u come out the value of Net Assets Backing per share? What are the differences between NTA & NAB per share?? TQVM.

Posted by kahfiehlai > 2013-02-01 21:45 | Report Abuse

Dear Kcchongnz
I like easy way to remember things straight forward.
For Warrants, general is better if the Premium % is smaller while Gearing is Bigger the better? Can I do so?
Thanks

Posted by necro > 2013-02-01 22:11 | Report Abuse

BJFOOD-WA

Posted by kcchongnz > 2013-02-02 01:07 | Report Abuse

Desmond,
NAB is obtaind by dividing the "equity attributed to common shareholders" as shown in the balance sheet divided by the number of shares outstanding. For NTA, you less off the intangible assets such as "Goodwill" as shown in the balance sheet. This "Goodwill" is a result of an acquisition over and above the book value of that asset. It has to be written off progressively, or we call amortized over a number of years. Hence NAB is always higher than NTA.

Posted by kcchongnz > 2013-02-02 01:14 | Report Abuse

kahfiehlai, you are right to the point about premium and gearing of warrants. The other things you may like to consider is its implied volatility and liquidity. The lower the implied volatility in respect to the historical volatility of the underlying share means the better value of the warrant. Of course you would prefer higher liqudity of the warrants for ease of buying and selling. Another thing may be is the delta of the warrant; normally a delta at 0.5 is exciting when the warrant is moving from out-of-money to in-the-money. I can't explain all these terms here, You could easily Google about them and you will find good explanations.

Posted by kcchongnz > 2013-02-02 10:22 | Report Abuse

necro, I believe those stocks mentioned by you are growth stocks. Oldtown, bjfood, cuscapi spend a lot of money to foray to overseas, open more shops etc to grow its business for future. Many people want high dividends when they invest in companies, but also want the company to grow fast. The fact is that one cannot have the cake and eat it too. Lke I said, how can you have money to grow the business if you pay out most of your earnngs? You can take on more debts, yes, but there is a limit of how much debt you can take on. Pantech is a good example of good use of debts. It is growing fast this couple of years and yet it has mantained good dividend payment of 3.3 sen last year which tanslates to a good dividend yield of more than 4%. It borrows more and cleverly making use of this debt to improve its operating efficiencies such as ROE. Looking at its recent performance, it could return to its good time of having high ROE of 20% soon. Good prospect for this stock in my opinion in view of the excelent prospect in the oil and gas industry.

Posted by kcchongnz > 2013-02-02 10:53 | Report Abuse

Pantech's cash flows for the last two years do not look good though.

Year 2012 2011
CFFO 2093 37487
Capex -34026 -50123
FCF -31933 -12636

As you can see, there is no free cash flows for the last two years. Pantech's dividend paid those years were from borrowings. I won't say this is wrong or not, to borrow to pay dividend, but that is what shareholders want and the management just want to show that they can do that. After all, Pantech's debt is just a little more than its equity which is still manageable. Its debt for the recent 9 months has in fact increased. At the same time, its earnings and free cash flows have also increased tremendously. EArnings has in fact almost doubled to 43 m and free cash flows is now positive of 47m for the past 9 months. Prospect looks promising.

Posted by tonylim > 2013-02-02 11:28 | Report Abuse

Kcchong. Yes for the first in recent years.
increase in debts for this industry us ok since you need high inventory as one analyst says o n g supermarket

Posted by New Insight Sabah > 2013-02-02 12:52 | Report Abuse

We'll have to go back to basics and ask why does a company pay a dividend in the first place? And where do dividends come from? Mr Chong has rightly said in his earlier comments on growth companies which are unlikely to pay a lot of dividends if they have to plough back profits for business expansion or new ventures. Some may not even pay dividends while others try to strike a balance. Thus dividends must necessarily come from profits. Alarm bells should ring if companies have to borrow to pay dividends. Red flags should be raised if debt equity ratio is higher than 0.5. But then investors and traders can be irrational and would still take a risk on companies with debt to equity ratio of 1.1 or higher. AirAsia comes to mind.

Posted by necro > 2013-02-02 15:32 | Report Abuse

Oooo...
Is AA debt to equity ratio is hi?...
Thus wat is your recomendation on Pantech?
from technical looks promising in this year,yet need to see something brewing announcement on company earning or contracts..
What about Cuscapi on your perspective mr.kcchong?
Thanks about your explanation..

Posted by investor77 > 2013-02-02 16:32 | Report Abuse

Thanks KCChong, for your very informative and lengthy reply. Wish there are lots of forumers with good informative discussions.

I have been playing call warrants too, and learning by paying the price for being too bullish, having made huge losses on Genting and Bursa call warrants. However, made small gains thru Axiata and Dialog call warrants. Now betting on Air Asia and DRB call warrants.

Wct -wb was trading at a discount to its mother and thus good for arbitrage, but not now.

Now the million dollar question is how market will react after announcement of election day. Should we sell all our portfolio at a loss now, since it will probably fall even further, OR hang on , average down , and after recovery , then only sell.?

Fund Managers tends to think China will do well, so run to China market and leave KLSE until results known, ha, ha ha,!!

Posted by kahfiehlai > 2013-02-02 17:12 | Report Abuse

Dear Kcchongnz
Another thing may be is the delta of the warrant; normally a delta at 0.5 is exciting when the warrant is moving from out-of-money to in-the-money
My understanding of this is that the premium % is moving from +% towards O and even gradually to -% (or so called discount..right???}

Posted by kahfiehlai > 2013-02-02 17:15 | Report Abuse

Yeah, investor77...that is why i am trying to learn & understand warrants more deeper. So far i never touch call warrants..Kiasi and kiasu..hahaha

Posted by Ooi Teik Bee > 2013-02-02 17:31 | Report Abuse

I prefer to buy warrant out of money because I need to pay less money to own it. To me, Delta at 0.4 is good enough.

The most important criteria to buy warrant is the mother share must be bullish. Like WCT, this stock is bearish, hence all warrants will not perform irrespective whether the warrant is trading at discount or premium.

Thank you.

Ooi

Posted by sh2383jbt > 2013-02-02 19:20 | Report Abuse

Hi, kcchongnz, you are really my sifu without selfish heart, sharing to all of us (fresh investor). Wish you very healthy, happiness and 新年快樂.

Posted by Ooi Teik Bee > 2013-02-02 22:10 | Report Abuse

No. I am under invest in KLSE, I keep more cash than share. Have not decided yet.

Thank you.

Ooi

Posted by kcchongnz > 2013-02-03 02:07 | Report Abuse

Posted by kahfiehlai > Feb 2, 2013 05:15 PM | Report Abuse
Yeah, investor77...that is why i am trying to learn & understand warrants more deeper. So far i never touch call warrants..Kiasi and kiasu..hahaha

Yeah, it is best to avoid call warrants if you don't understand it. Even if one is an expert in option trading in Malaysia he may not necessary win in this zero sum game, simply because the playing field here is not level. Insiders and issuers can eat him up easily. Moreover the market sentiment now is not condusive for warrant punting because of the GE fear.

In term of moneyness in call warrant, you have not fully understood it yet. Take for example Dialog CL. The exercise price is RM2.50 with an exercise ratio of 3. With the price of Dialog at 2,31 and CL at 0.5 sen now, CL is deeply out-of-money (OOM)with a premium of 9%[(0.005*3+2.50)/2.31-1]. It simply means that holders of CL get nothing if CL expires when Dialog is 2.31. CL will be at-the-money (ATM) if Dialog rises to 2.50, the exercise of CL. CL will be in-the-money if Dialog is above 2.50. But it dosn't mean CL is at a discount now when Dialog is above 2.50. For example if Dialog is 2.52 now and CL at 1 sen, CL is ITM because mother share price is above the exercise price of 2.50, but there still a premium of 1.6% for CL at 1 sen. [(0.01*3+2.50)/2.52-1]. It means if your cost of CL is 1 sen, you still lose money if CL expires when Dialog is 2.52 though you get a littl money back.
When an option is moving from OOM to ITM, the "gamma" or rate of change of delta wrt to the underlying share increases faster and that makes it exciting, not as what you envisaged.

Posted by Desmond Liew > 2013-02-03 09:29 | Report Abuse

Hi Mr Chong

I hope u can express freely on your view of my question below & i dont mind whatever +ve or -ve views u express, i appreciate.

which is better TA or FA? Which investor TA or FA are really reaping alot of profits in a year? What is the total yield annually being a FA can harvest & how about TA? I read from a book saying that the max a TA can earn is 15% & wall street investors can only averagely net 12% annually.

I m a "L" TA & have been making mistakes to loss money due to lack of personal discipline but my perforamce in term of P&L now look better than i who was a wind follower or rather say a blind many years ago..

TQVM

Posted by arebear > 2013-02-03 10:28 | Report Abuse

Most of the company having no debt. Good list. I watch KFIMA, PTARAS and SKPRES as per in your list.

Posted by kcchongnz > 2013-02-03 12:31 | Report Abuse

necro, you seem to be very interested in apa ini cuscapi. Why? Insiders/big boys going to goreng? Somebody going to acquire it and pay big bucks? Going privatization with big payoff? Any plausable stories? You know I have never heard of Cuscapi until you mentioned it. But since you are so keen on this counter, I will try to look at it and give my litte informed opinion here.
Cuscapi, a e-commerce outfit listed in Ace Market providing services such as call order delivery services and other F&B management solutions, operating locally and internationally especially in China. It obtained a couple of awards, ‘Top 10 Most Satisfying F&B Management Software’, and ‘Innovative Award for China E-Commerce Enterprise’ as mentioned in its 2011 annual report. Sounds interesting and unique business model. But how is its economic moat? Is the business in demand? Is there high barrier of entrance from other competitors?
Let’s look its growth for the last few years to gauge its economic moat. Table 1 below shows it revenue and net profit for the last 5 years since listing in Mesdaq in 2007.
Table 2: Growth, value in thousands
2011 2010 2009 2008 2007 CAGR
Revenue 53595 48903 38925 36280 38000 9.0%
NI 8631 9123 262 980 8500 0.4%

Revenue grows at a compounded annual rate of 9% for the last 5 years, doesn’t really appear to be a high growth company as claimed. Growth in net income (NI) of 0.4% a year is at best uninspiring. In fact during the last US sublime crisis in 2008 and 2009, NI was seriously affected with NI less than RM1 m as shown. How is its ROE?
Table 2: DuPont Analysis
Year 2011 2010 2009 2008 2007
ROE 15% 21% 1% 3% 22%
NI 16% 19% 1% 3% 22%
AT 0.794 0.930
FL 1.143 1.220

Table 2 above shows that ROE bounces around and it is inconsistent. During better time say in 2010, ROE appears to be good at 21% achieved with NI of 19%, asset turnover (AT) of just 0.9, meaning not enough turnover or jobs. The financial leverage is low though which appears to be good. However other companies of similar service-based businesses have better metrics than these. Moreover, you can see the deterioration of its operating efficiencies from 2010 to 2011 when ROE worsen from 21% to only 15%. In fact there doesn’t seem to be any improving for the last 9 months ending 30/9/2012 with NI of RM4.8 m only.
What about its cash flows? Table 3 below shows its cash flows for the last two years:
Table 3: Cash flows
Year 2011 2010
CFFO 4560 11414
Capex 5100 4933
FCF -540 6481

There are some free cash flows of 6.5 m in 2010. However, there is no free cash flow last year after spending money on software development and purchase of plant and equipment. So where is the beef? But never mind, a not so good stock can be a great investment if the price is cheap.

At the closing price at 32 sen on 31/1/2013, PE ratio works out to be 8.4, not really very cheap for an ACE stock with not much of economic moat, in my opinion.

Posted by necro > 2013-02-03 12:38 | Report Abuse

Wow.....
Thanks mr.kcchong..what a marvelous explaination....
5STAR!!!....
Hurmmmm...juz curious with it proposed rite issue n bonus plus waran and transfer to Main Board...
Thats why nid pro in FA to explain to me..

Can i ask more kcchong?

Posted by kahfiehlai > 2013-02-03 13:07 | Report Abuse

Posted by kcchongnz > Feb 3, 2013 02:07 AM | Report Abuse

Posted by kahfiehlai > Feb 2, 2013 05:15 PM | Report Abuse
Yeah, investor77...that is why i am trying to learn & understand warrants more deeper. So far i never touch call warrants..Kiasi and kiasu..hahaha

Insiders and issuers can eat him up easily.
===========================================
This is the concern in my mind, call warrants can be easily manupilated or pricing control by the BIG players (Issuers/Institutions) if they intented to, prior to the War expiry date. As the control is solely on their hand, while call holders can do is just wait..whether is ITM,OOM orATM on expiry date definitely ..Big eat Small..

Hope I am right

Posted by kcchongnz > 2013-02-03 13:23 | Report Abuse

Posted by Desmond Liew > Feb 3, 2013 09:29 AM | Report Abuse
I hope u can express freely on your view of my question below & i dont mind whatever +ve or -ve views u express, i appreciate.
which is better TA or FA? Which investor TA or FA are really reaping alot of profits in a year? What is the total yield annually being a FA can harvest & how about TA? I read from a book saying that the max a TA can earn is 15% & wall street investors can only averagely net 12% annually.

I follow FA in my investment as you have already know. That is what I am comfortable with. I don't know much about TA. So I am not qualified to comment on TA. However I don't agree with your book that the max a TA can earn is 15%. I don't think there is a maximum a TA user can earn. I am sure some TA followers can earn a lot more than that, even hundreds of percents. The key is consistency. Important statistic is what is the median return an average TA person can earn. However I am highly doubtful an average TA follower can earn a long-term compounded annual return of 15% per year. I would even surprise an average TA follower can earn 10% a year consistently. TA is a trading strategy, a strategy used but it involves too much of transaction costs and it is a zero sum game. similarly for a FA followers. Some will make more while others less, some may even lose money, depending how good he is. If an average FA follower can earn 12% a year, I think that is pretty good too. I know a lot of good FA people made a lot of money in the equity market; Warren Buffet, Phillip Fisher, Peter Lynch, Jeremy Seigel, Glen Arnold, James Montier, Ken Fisher etc. I don't know any TA expert making that kind of money; probably I did not take the trouble to read about it. If you go to university to study investment, you learn about financial statement analysis, valuation and other fundamental stuff. However non will teach you about TA. No finance academicians believe in TA. But I believe a FA follower may improve his investment return, especially the entry point, if he also uses TA as a guide.

Posted by kahfiehlai > 2013-02-03 13:30 | Report Abuse

Bear market - FA (fish long)
Bull market - TA (Trading)
Sidetrend - FA + TA
Superbull - No need any A, simply shoot u also got it..hahaha

Posted by Tradeup > 2013-02-03 14:25 | Report Abuse

Hi Desmond, I think we are in the same boat. Lose money all the time using TA to trade. maybe must try FA. But not honestly know how. I am newbie. Maybe wrong time. Hope to learn from experienced people here.

Posted by kcchongnz > 2013-02-03 14:43 | Report Abuse

necro: Hurmmmm...juz curious with it proposed rite issue n bonus plus waran"

What is it you are curious about? You think it is a fantastic thing for shareholders? I said before, "There are some free cash flows of 6.5 m in 2010. However, there is no free cash flow last year after spending money on software development and purchase of plant and equipment." Cuscapi want to expand to other overseas country and they need money, don't they? So where to get money? I would like to recommend you to read the appended post whether the exercise is good.

http://www.intellecpoint.com/2013/01/terms-we-should-be-clear-of-investing.html

If I am a shareholder of cuscapi and the company carries out the above exercise, I won't get excited about it. Well it is ok if you give me bonus issues and free warrants, but still nothing to be excited about as explained by the above post as really it doesn't add value to me. But asking money from me to buy more cuscapi shares? No thanks man.

For one I am surprise why the management don't borrow from banks as debts is cheap now, 5%, 6% interest? Whereas cost of equity (right issues) is high. If I want to invest in a company like cuscapi, I would want a return of 15%, 2.5 times the cost of borrowings. So why don't borrow from bank? Is it because the banks don't see its business safe and good enough for them to invest in their debts? Why from me then?

Posted by necro > 2013-02-03 14:59 | Report Abuse

Owhh...
Then why Mah Sing dont borrow from the the bank mr.kcchong?but plan to issue right issue and warrant?...
Sorry For asking too much..

Posted by kcchongnz > 2013-02-03 16:15 | Report Abuse

I don't know why Mahsing plan to issue right issues and warrants? Maybe because their borrowing is already too high. It is closed to RM1 billion now including the ICULs. Debts is as much as its equity now. Moreover they are so aggressive for their property development, talking about 5 b turnover a year now. That really need a lot of money. Don't you think so necro? Having too much debts can result in a company risky. cuscapi on hand has little or no debt now. I am just guessing only as I am not having any financial management experience in corporation. Maybe others can help to explain.

Posted by bingo > 2013-02-03 16:22 | Report Abuse

kcchongnz, MS needs to cut down their debts and as you said it's rather high and that is not good for any company....so the best & easy way is by rights & warrants issue. Cheers.

Posted by Desmond Liew > 2013-02-03 17:04 | Report Abuse

TQVM Mr Chong for yr kind posting. I have been learning about simple financial ratios from books & trying to understand the 3 financial statements since dec 2012 as i m an engineer who doesnt have accounting knowledge. Indeed i have fed in alot of accounting knowledge from your goodself & some financial bloggers such as Mr Dali & Mr. Felicity; intellecpont.com

Posted by razmry > 2013-02-03 17:21 | Report Abuse

TA vs FA = FA + TA

Most likely TA (Traders) and FA (investors)

Short terms investor turn to traders and long terms traders become investors...

When make money then it is correct analysis + good fate... no fate then...

Posted by necro > 2013-02-04 01:15 | Report Abuse

ramry????
mr.kcchong thats make me curious to since you have to pay RM800something for 1k shares MS if you want to subscribe,one of their project located at AMPANG POINT near to KPJ AMPANG PUTERI..
Quite a bussy and jammed place..

=P

Posted by kcchongnz > 2013-02-04 13:55 | Report Abuse

SKP Resources (35.5 sen on 4/2/2013)
SKP Resources Bhd (SKPR) is the solely listed company in Bursa involves in supplying high end plastic components products for electrical manufacturers. Just three months ago, the major shareholder who own 72% of total shares as at march 2012 has been selling down his shares holdings which drove the share price from its high of 39 sen to the low of 33 sen. Recently the selling appears to have been halted and its share price has since recovered to 35.5 sen at the close of the morning market today. The volume traded this morning is substantial at about 7 m. Is SKPR a good investment?
Let’s look its growth for the last few years to gauge its economic moat. Table 1 below shows it revenue and net profit for the last 5 years.
Table 1: Growth in revenue and net income
Year 2012 2011 2010 2009 2008 2007 CAGR
Revenue 414834 256996 195735 174729 178341 170066 20%
Net Income 36844 26245 13404 2931 18294 15997 18%

Revenue and net income (NI) grows at a compounded annual rate (CAGR) of 20% and 18% respectively for the last 5 years. In fact for the financial year ending June 30 2012, revenue and NI grew at accelerated rates of 61% and 40% respectively, thanks to the contract manufacturing work from Dyson Upright Vacuum Cleaner. For the latest 6 months financial performance, revenue and profit has improved further to 244m and 23.8 m respectively. With these growth rates, SKPR is definitely considered as a growth company, don’t you agree? Is the growth a quality growth? We will examine its ROE. Table 2 below shows the dissection of its ROE for last 6 years.
Table 2: DuPont Analysis of ROE
Year 2012 2011 2010 2009 2008 2007
NI 8.9% 10.2% 6.8% 1.7% 10.3% 9.4%
AT 1.57 1.22 1.10 1.10 1.07 1.06
FL 1.46 1.34 1.26 1.22 1.28 1.41
ROE 20.5% 16.6% 9.5% 2.2% 14.1% 14.1%

Table 2 above shows that except for the year of the US sublime crisis in 2009, ROE has been consistently satisfactory at an average of 15%. ROE has improved tremendously for the last financial year to more than 20%, which is mostly attributed to higher sales resulting in higher asset turnover of 1.57. In fact ROE for the trailing twelve months has improved further to 23%. What about its cash flows? Table 3 below shows SKPR’s cash flows for the last 6 years:
Table 3: Cash flows of SKPR
Year ended 31/3/11 2012 2011 2010 2009 2008 2007
CFFO 29241 40255 19544 19705 30322 18264
Capex -10086 -17509 -5922 -5677 -13062 -7346
FCF 19155 22746 13622 14028 17260 10918
FCF/Revenue 5% 9% 7% 8% 10% 6%
CFFO/NI 79% 153% 146% 672% 166% 114%

SKPR has consistently producing positive cash flows for the last 6 year averaging about 26 m a year. After spending for capital expenses, there is consistent free cash flow (FCF) averaging 16.2m a year. This averages to about 7% of revenue (>5%) which is considered healthy. This could be a reason why SKPR has been able to distribute good dividends to its shareholders. Last year, 3.08 sen of dividend was distributed which worked out to be 8.7% dividend yield, closed to 3 times one can get from bank deposit. So SKPR appears to be a great company. But is it a good investment?

At the closing price at 35.5 sen this morning, PE ratio works out to be only 5.8 based on last financial year earnings. Valuing SKPR using ROE with 10% required return, considering its debt-free balance sheet and its NAB of 30 sen per share will give a fair value of 61 sen, 73% above its present price of 35.5 sen. This valuation has not considered its improved financial performance of the last 6 months yet.

Posted by Desmond Liew > 2013-02-04 14:17 | Report Abuse

Hi Mr Chong.

I like to read what u preach & may i know whether u own your financial & investment blog?

Mr Chong, u have been applying Dupont to analyse a co to ensure its worthyness to invest & i have not seen u touching on intrinsic value of the share price of that co? May i have your reasons if u dont mind to share. TQVM.

Posted by Mat Cendana > 2013-02-04 15:25 | Report Abuse

Dialog-CL... this one didn't work out for me. Went in at 0.015 when the mother was at 2.42 or so. I think the decision to take the risk was reasonable since an upswing should have taken it towards and then past the ex. price. It didn't materialise. Instead, the potential upswing petered out and Dialog has been sliding ever since. Decided to cut loss at 0.01. Big percentage loss but ringgit-wise it's tolerable since I didn't have too many lots. Time is running out and the CL looks to be a dead duck... unless if some positive news comes out real soon to push up the mother.

Posted by Mat Cendana > 2013-02-04 15:30 | Report Abuse

Mah Sing: I see one of its projects at the Jln. Sg. Buloh-Subang Airport junction every day on the way to my wife's office - Star Avenue. This project is a big risk although I'm sure the people at Mah Sing know what they're doing. There's potential for this area what with the RRI land and all. Mah Sing are the early starters here and they will be very well positioned when the area develops. But that's all in the future and they'll need a lot of cash to stay in the game.

Posted by necro > 2013-02-04 16:17 | Report Abuse

The cash from subscriber..

Posted by kcchongnz > 2013-02-04 16:25 | Report Abuse

What is the intrinsic value of SKP Resources?
“If we think through these questions, we can gain some insights about what may be called “owner earnings.” These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges such as Company N’s items (1) and (4) less ( c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c) . However, businesses following the LIFO inventory method usually do not require additional working capital if unit volume does not change.)” – 1986 Berkshire letter
Warren Buffet stated that the value of a company is simply the total of the net cash flows (owner earnings) expected to occur over the life of the business, discounted by an appropriate interest rate
Using the following data and assumptions, the intrinsic value of SKP Resources is 58 sen per share, or a big margin of safety of 39% based on today’s price of 35.5 sen.
Data
June 2012 Revenue 414.8 m Actual
June 2012 net income 36.8 m
Dividend 18.5 m
Capex 10.1 m
Depreciation 2.0 m
Working capital 51.7 m

Assumptions
Growth for the next 5 years 10%
Terminal growth rate 3%
Required return=3.5%+6.5% 10% risk free rate + risk premium
ROE in stable growth 12%

Results
PV of company 526.9 m
Less value of warrants (3.7m)
PV for common shareholders 523.2m
Number of shares 90m
Intrinsic value of stock 58 sen
Share price (4/2/13) 35.5 sen
Margin of safety 39%

Posted by necro > 2013-02-04 16:37 | Report Abuse

What bout skpr3s fair value mr.kcchong?
Since we in bearish mode fair value determine wat fair price should we in..

Posted by Desmond Liew > 2013-02-04 16:48 | Report Abuse

Fair value should be 35.38sen,, am i right?

Posted by Desmond Liew > 2013-02-04 17:08 | Report Abuse

Posted by necro > Jan 25, 2013 11:01 PM | Report Abuse

I dunno wat d name just read books HOW TO MAKE MONEY FROM YOUR STOCK INVESTMENT EVEN IN FALLING MARKET...
It just wrote how to VALUING STOCKS USING THOSE METHODS..

Hi necro, i got that book too, author is a Malaysian.

Posted by necro > 2013-02-04 17:17 | Report Abuse

Yeah same2...
Got in Bahasa too..
Do you calculate the fair value using that method?
Find any growth stock trading below NTA with chareteristic mention by WBUFFET?

Posted by Fabien Wong > 2013-02-04 17:25 | Report Abuse

You have analysed the historical financials well. But what is their growth story in the coming years? Is the growth sustainable? How wide is their moat? Is big holders selling down their stakes a concern to u?

Posted by Desmond Liew > 2013-02-04 17:30 | Report Abuse

i read english ,, not yet digest esp on intrinsic value.. the way the author preaches is different. he uses eps growth, average per etc... But i dont know whether i got the patient to wait exiting with profits 10years later. Anyhow it is a good book to me..

Posted by necro > 2013-02-04 17:44 | Report Abuse

PER AVERAGE NOT MISTAKE PE AVERAGE FOR 10YEARS.
Lets say from 2002 till 2012 PE for company ABC consistently at 10 then PER AVERAGE is at 10,then for 1Quaters the PE at 8 then company is trading at below its PER AVERAGE....
Pls correct me if im wrong...

Posted by kcchongnz > 2013-02-05 10:48 | Report Abuse

MC, i am caught by this Dialog-CL too. And also other call warrants. All of them appears to be heading to Holland. Too bad for the lethargy of Bursa for a long time already due to the looming GE. Any chance of quick recovery? I highly doubt so. Not easy to make money in cw where the playing field is not level. Given up? Not really. Just wait for another time. God luck to you.

Posted by alexlulu > 2013-02-05 10:50 | Report Abuse

kc. thank u for paying IB staff bonus. all cw are issued to pay their fat bonus. i paid a lot too. niamah.

Posted by kcchongnz > 2013-02-05 10:57 | Report Abuse

alexlulu, I think you post a very helpful statement here. Yeah, IBs earn huge amount of money from punters of call warrants, no slightest doubt about it. So I hope cw punters should pay attention to what you have said, seriously. Me? I am still a gambler at heart.