Posted by AyamTua > 2015-10-01 22:33 | Report Abuse

there are karek...
there are sumatek ..
there are glotec...

tetetekkkkkk kikikiiii

Posted by BearbearDrop > 2015-10-01 23:23 | Report Abuse

One do not simply question rubber maker

Posted by jeffbkt > 2015-10-01 23:23 | Report Abuse

Do you mind to share your template?

Posted by RainT > 2015-10-01 23:34 | Report Abuse

Yes is overvalued with current PE 36
But there is competitive advantages of this company also
Just how we see it...subjective

Posted by RainT > 2015-10-01 23:35 | Report Abuse

It's good article
Thanks for sharing !

Posted by yfchong > 2015-10-02 06:31 | Report Abuse

Do you have a blog whereby I can subscribe.... Thks

Posted by yuanwei92 > 2015-10-02 07:46 | Report Abuse

Thanks for the comments, I didn't not have any other blog at this moment, will be writing here if I came across any useful thoughts/ideas.

Feel free to modify and use the worksheet I created and let me know if you have better idea of using it =) (link to download: https://dl.dropboxusercontent.com/u/86103942/Simple%20DCF%20Calculator.xlsx)

Posted by sosfinance > 2015-10-02 08:54 | Report Abuse

Discount rate appears to be too low (Try using the weighted average of cost of debt and cost of equity)

Posted by buffett_jr > 2015-10-02 09:32 | Report Abuse

34% growth rate is unrealistic..At current price, ppl are actually buying it for future earnings. risky and not under valued.
btw, good article *thumbs up*

Posted by fayeTan > 2015-10-02 12:04 | Report Abuse

Discount rate using published Bank Negara interest rate is too low. Try compare a plate of chicken rice now compared to one year ago. 3% increase? Immpossible

Posted by yuanwei92 > 2015-10-02 12:49 | Report Abuse

Exactly. Through this example, I wanted to point out that even with such unrealistically optimistic discount rate and company growth rate, the company still seem overvalued, hence the actual value would be much much lower. On top of that I'm not aware of any other factors that could elevate it's estimate value to that extend.

Posted by paperplane2 > 2015-10-02 13:56 | Report Abuse

overvalued? Bintai, BTM are.........avoid them if can. Good luck if still holding. HIGH RISK HIGH RETURN mah.

Posted by LanSeeBoy > 2015-10-02 14:02 | Report Abuse

Not forgetting those gloves companies...sheer madness they are trading at huge premium to its larger global comparables...

Posted by laimi > 2015-10-02 14:48 | Report Abuse

The DCF Calculation is wrong. You should also include terminal value in the model. In your case, you are assuming the company stop operating at the end of Year-10. You can read about how to caluclate DC on this: http://www.investopedia.com/university/dcf/dcf4.asp

Posted by popcorn > 2015-10-02 14:51 | Report Abuse

long term yes to avoid~
short term investment is good to try~

Posted by ssingh > 2015-10-02 15:08 | Report Abuse

Good analysis

Posted by valuelurker > 2015-10-02 15:51 | Report Abuse

34% growth to perpetuity

Posted by Kevin Wong > 2015-10-02 19:37 | Report Abuse

A 'winning' stock ever since its listing

Posted by lulhunter > 2015-10-05 10:05 | Report Abuse

My humble opinion as a Karex shareholder. You need to understand the purpose of growth stock against traditional stable stocks. Growth for the stock is exponential and if you personally look at the output, eventually you will realize that most shareholders are investing on the future growth of the stock. KAREX is a growth stock. Besides it being a growth stock, I am currently getting 2.5 cents yearly. (not counting bonus issues and the growth of the share price)

Posted by yuanwei92 > 2015-10-05 20:08 | Report Abuse

Thanks for the comment lulhunter. I might be wrong, my concern would be that when it is trading at a price so high leveled up due to optimism on its business nature, I afraid that it might approach/exceed its future value. Anyway it is just my opinion as I have no correct estimation on its future growth and insights in this industry.

Posted by hissyu2 > 2015-10-05 20:25 | Report Abuse

once Karek got a karat-quarter, the price will drop like waterfall... I believe yuawei didn't mean to tell Karek was bad, just that to invest Karek at current price might be a bad idea.(which i share exact the same idea though i didn't understand very well your calculation)
if with regard to "cold eyes" formation, PE more than 20 is not something he will pursue, a fair PE for growth will be <<20. Personally, when i do stock screening, PE >20 will definitely out from my selection...

for those who think that "growth stocks reserve higher PE(in this case, i meant to say >>20), please try to look at https://sg.finance.yahoo.com/q?s=AAPL

Posted by hissyu2 > 2015-10-05 20:27 | Report Abuse

last but not the least, yuanwei, thanks for sharing. Nice1

Posted by yuanwei92 > 2015-10-05 21:29 | Report Abuse

Thanks hissyu2 for your comment, you just summed up my points! =) I didnt realise Apple is trading at such P/E as well.

Posted by lulhunter > 2015-10-06 13:48 | Report Abuse

hissyu2 is right about karat-quarter. That's why no one can time the market (or they are billionaires) At such high P/E ratio, Karex is definitely not the best stock to invest in NOW, but it is a good stock to keep when you bought it low, let's say during IPO price.

Mind you if you bought 1000 shares at RM 1850 during IPO: RM 1.85, the share you have now is 2250 after 2 rounds of bonus issue at the price of RM 3.30 which is worth RM 7425 adding RM 37.50 dividend making it worth RM 7462.50 as of today within 2 short years. Another thing to note is that their production capacity is increasing as they continue to setup their factories and acquisition.

Is it overvalued? Yes. Is it not worth investing? Definitely not.

Posted by The One > 2015-10-06 13:59 | Report Abuse

Just accept the truth laa.. all the glove counters now are very overpriced.. will drop hard when the roof is finally hit and when the main players decided to take profit. You dare to hop into the boats now.. just to make a few lucky bucks? Wish you best of luck..

Posted by hissyu2 > 2015-10-08 21:02 | Report Abuse

lulhunter, yes.. karex is worth to invest if you entered this counter few years ago :)
For a company which continues to grow and does have the prospective(good future), we should hold for long(continuous growing, dividend ++, good cash flow, manageable debt, clean account)

but if you were to ask me to buy karex at current price for "investment"? i rest my case...:)

and your last sentence is definitely correct

Posted by hissyu2 > 2015-10-08 21:04 | Report Abuse

yuanwei, i am looking forward to seeing your next post :) thanks for the great heart to share your hardwork/effort:)

Posted by hissyu2 > 2015-10-08 21:05 | Report Abuse

The-One, if top glove could hit the estimated PE(current PE), we don't call it overpriced, we call it GROW :)

Posted by elephant123 > 2015-10-21 16:48 | Report Abuse

You are using a faulty valuation method. Don't copy and paste from textbook, it simply won't work.