Posted by MoneyFace88 > 2015-05-22 21:04 | Report Abuse

Mr Chong, which stock that has the same price as V.S can outperform V.S in the next 6-12 months ?

Posted by Probability > 2015-05-22 22:27 | Report Abuse

someone posted - 'a picture says a thousand word'..so it only matches a thousand word.
a person who comments w/o any biases..and who has proven his integrity..time an time again..

..with his 'one word'...you may not even need 'to see' to get convinced!...he he he

thanks KC :)

Posted by sunztzhe > 2015-05-22 23:18 | Report Abuse

MoneyFace88, EVERGREEN can give VS a tough fight in the next 6-12 months...Why? Its controlling shareholder cum management had spend considerable money and time to empower its biz model that will in future sustain its competitive advantage cum sustains its EPS growth...

Posted by sunztzhe > 2015-05-22 23:38 | Report Abuse

I will always put tremendous premium on the the strategic mindset of the controlling shareholder/shareholders that invest its free cash flows to improve upon its biz model that will empower it to earn increasing profits that result in increasing EPS...

It is quite simple biz strategy really....invest free cash flows to improve on its biz model that empowers the company to earn good cashflows that sustain its competitive advantage to earn increasing future EPS...

Posted by sunztzhe > 2015-05-22 23:58 | Report Abuse

I will however place great emphasis and focus on the controlling shareholder's skillsets on the strategic planning, on strategic execution of its chosen strategy to empower further its biz model being a partner to Global brand leaders. As shareholder, I wish to see VS being in the top 20 EMS producers in the next 5 years!!

Posted by MoneyFace88 > 2015-05-23 08:31 | Report Abuse

Thanks, sunztzhe. I will have a look at evergreen

Posted by oregami > 2015-05-23 11:31 | Report Abuse

True there are plenty of stocks have much better financial ratios compared to VS. The question is how much room of improvement is available for those stocks. The macro economy now favours precision plastic mould & semiconductor businesses. VS is at the right spot at the right time. The numbers / ratios very likely will change from Q to Q.

Posted by oregami > 2015-05-23 11:39 | Report Abuse

I like companies with debt as long as current ratio & debt to equity ratio look good. In financial language, WACC (for company with debt)is always lower compared to cost of equity (for debt free company). In layman language, We can expect double boost during the good time; increase in earning from sale & increase in earning due to lower finance cost as company continue paying up loan.

Posted by Intelligent Investor > 2015-05-23 12:49 | Report Abuse

Hi MF88,

Let's compare VS with 2 other technology based companies in my portfolio.

VS - http://www.klse.my/stock/result/financial/6963.jsp#stockDetailDiv


vs

VITROX - http://www.klse.my/stock/result/financial/0097.jsp#stockDetailDiv

ELSOFT - http://www.klse.my/stock/result/financial/0090.jsp#stockDetailDiv

Posted by winwin > 2015-05-23 14:06 | Report Abuse

at least another 2 years the business will sustain at consistent growth as long as US dollar is strong.

Posted by sunztzhe > 2015-05-23 14:11 | Report Abuse

TOTAL ASSETS= SHAREHOLDERS FUNDS + TOTAL LIABILITIES

ASSETS= Current Assets + Non Current Assets
SHAREHOLDER FUNDS= IPO Capital + Rights issue + Private Placement + Retained Earnings(Accumulated Losses)
TOTAL LIABILITIES= Current Liabilities + Non Current Liabilities

ROA is a good performance measurement of how well any company manage its total assets.

A company will organize, utilize and manage its total assets to grow its top and bottom line over time and in that process generate sufficient profits, free cash flows to invest further in improving its biz model and/or distribute as dividends to its shareholders.

To fund its investment in ASSETS that will yield future profits, free cash flows ..a company can utilize shareholders funds and/or Debt to invest in FUTURE ASSETS that can generate incremental future income, free cash flows for the company

A long term shareholder would like the company management to invest on improving its biz model to have better competitive advantage , grow its assets and consequently generate increasing ROA, increasing cash flows. AS long as any company has the capability to generate a return higher than its weighted average cost of capital, it should employ the cash flows generated through operations to invest in improving the competitive edge of its biz model..

If the company management has run out of ideas to generate better returns on the excess cash flows generated that can yield a return above the weighted average cost of its capital then the excess cash is best returned to its shareholders.

Posted by JT Yeo > 2015-05-24 18:45 | Report Abuse

obviously VS didnt have the capability to generate higher return than WACC

Posted by kcchongnz > 2015-05-24 21:07 | Report Abuse

Posted by JT Yeo > May 24, 2015 06:45 PM | Report Abuse
obviously VS didnt have the capability to generate higher return than WACC


The return on capital is the thing to look at, not growth in profit. Imagine this, a company can keep on borrow money by issuing bonds or bank loans, say RM1 billion and invest in something which earns RM10m extra for the year. There is still growth in profit, isn't it? But what is the return of this marginal capital? 1%. What is the cost of this debt? 5%?

Is it shareholder value enhancing, or a shareholder wealth destroying?

Mind you, the cost of debt say 5% is cheap and if you can't beat that in your return, you are likely to grow yourself to bankruptcy as mentioned by a commentator here. The weighted average cost of capital which includes the required return of the equity shareholder is much higher than the cost of debts.

Posted by leecheecheang > 2015-06-03 19:04 | Report Abuse

all opinions ae weicome, no heart feelings. remember a chinese poem which says, the higher the mountain you climb, the colder you would feel.

Posted by moneyface88 > 2015-06-24 00:05 | Report Abuse

Hello Mr Sifu KC Chong .... from New Zealand ?

Your article very Keng , very analytical. I have learnt a lot reading this article of yours.
Then got worried and sold my V.S Share then share price moved up strongly.
Today Q2 result announced, not what you have expected, you must be disappointed

How much you charge ah to learn something from you ?
Please tell me so that I can subscribe to your tips

Posted by kcchongnz > 2015-06-24 07:37 | Report Abuse

Dear moneyface88,

Here is my response to you.

http://klse.i3investor.com/blogs/kcchongnz/78867.jsp

Posted by moneyface88 > 2015-07-14 13:14 | Report Abuse

Sifu KC, you were right. V.S was cheap cheap. Now 5.44 already, too expensive to buy liao