Posted by bsngpg > 2015-10-23 10:51 | Report Abuse

Hi Yi: You did great calculation and are maximizing leverage effect on WB. On the contrary, I took a bit more conservative approach than you where I converted the only two free WB to mother share as I think the 40% DPO would suppress the “up” of the mother share. Furthermore I am cheap in enjoying the tiny dividend. Ha ! Ha! Good luck and looking forward to your venture to win big.

Posted by Amit Khindriya > 2015-10-23 11:22 | Report Abuse

Inari has enjoyed tremendous growth together with the upcycle of Semicon industry last 2 years....however, 2016 and 2017 is expected to be slow...look at Gartner estimates. So just be cautious.

Posted by Ezra_Investor > 2015-10-23 16:20 | Report Abuse

YiStock, I've recently conducted some study into Inari.
One of my findings is that global smartphone sales growth has dropped significant recently. http://www.gartner.com/newsroom/id/3115517
Hence it may be better to stay more conservative.

On one note, Inari EV/EBit is now 17 if i'm not mistaken, which I'm not keen of.
The valuation seemed too high for me. What do you think about it?

It's not a disagreement with you about Inari, it's just a discussion.
And oh yeah, forget about the other comment of mine. I've done a wrong calculations and deleted it.

Posted by YiStock > 2015-10-24 08:27 | Report Abuse

bsngpg Hi Yi: You did great calculation and are maximizing leverage effect on WB. On the contrary, I took a bit more conservative approach than you where I converted the only two free WB to mother share as I think the 40% DPO would suppress the “up” of the mother share. Furthermore I am cheap in enjoying the tiny dividend. Ha ! Ha! Good luck and looking forward to your venture to win big.
23/10/2015 10:51

Hi Bsngpg, i think dividend is definitely important. KC thought us well, your total return = capital appreciation + dividend. I let go the dividend as i perceive the quantum of appreciation of Inari-wb is worth more than the dividend yield. I assume dividend play is more on stagnant growth companies like those blue chips. For inari, the growth is still substantial.

I hope i m not wrong on this :-)

No right or wrong, just different investor's appetite. Cheers!

Posted by YiStock > 2015-10-24 08:45 | Report Abuse

Amit Khindriya
Inari has enjoyed tremendous growth together with the upcycle of Semicon industry last 2 years....however, 2016 and 2017 is expected to be slow...look at Gartner estimates. So just be cautious.
23/10/2015 11:22

Ezra_Investor
YiStock, I've recently conducted some study into Inari.
One of my findings is that global smartphone sales growth has dropped significant recently. http://www.gartner.com/newsroom/id/3115517
Hence it may be better to stay more conservative.

On one note, Inari EV/EBit is now 17 if i'm not mistaken, which I'm not keen of.
The valuation seemed too high for me. What do you think about it?

It's not a disagreement with you about Inari, it's just a discussion.
And oh yeah, forget about the other comment of mine. I've done a wrong calculations and deleted it.


Hi Amit & Ezra,

I think as an investor, we must be able to digest the information presented to you especially information from media.

You see, human psychology is somehow designed to be "pessimistic". A same scenario, when presented in negative/ pessimistic way, it tends to receive great attention.

From the link you provide, "Gartner Says Worldwide Smartphone Sales Recorded Slowest Growth Rate Since 2013";

i would read it as:

(1) " Wooa...when the whole world seem troubled by many issues, smartphone sales still recorded growth!!! thank god

(2) "Growth Rate" VS "Negative rate". See the different?

About the EV/EBIT at 17, i will usually add on ROIC.

ROIC+ EBIT/EV must be at the minimim of 20%. Anything above 30% i will consider to buy too if other quantitative criteria such as PEG or margin of safety and etc are fufilled. Also to look at qualitative aspect of business.

If you look at light asset companies like Scicom & MYEG, the EV/EBIT will definetely very high.. but because their ROIC is extremely high, people still willing to look at them.

This is my thoughts. Cheers!

Posted by Ezra_Investor > 2015-10-24 11:02 | Report Abuse

Dear YiStock, thank you for your reply, and thanks for sharing your insight and reasoning. Below is my constructive comment from some studies of Inari. I hope you will it accept with an open heart. If you feel offensive, please ignore this comment.

YiStock: "ROIC+ EBIT/EV must be at the minimim of 20%. Anything above 30% i will consider to buy too if other quantitative criteria such as PEG or margin of safety and etc are fufilled. Also to look at qualitative aspect of business. "

"Wooa...when the whole world seem troubled by many issues, smartphone sales still recorded growth!!! thank god "
-----------------------------------------------
"Price is what you pay. Value is what you get." - Warren Buffett

First, Buying into a high growth high valuation company always seemed exciting. However, we must first always ask ourselves this question - how sustainable is the growth?
To further understand this, please have a look at this.

https://en.wikipedia.org/wiki/File:The_Forces_of_the_Business_Cycle,_1922.jpg

So this raises the million question, yes smartphone sales still recorded growth, but how sustainable is the growth? If the growth is no longer as sustainable, is the company still deserve such high valuation? I'm not able to answer that as I'm no expert in the semi-con industry. I'll leave it to you guys tech experts.

This is one of the reason Warren Buffett never buys into many tech companies such as Microsoft, Netflix and Alibaba.

Posted by YiStock > 2015-10-24 11:03 | Report Abuse

Ezra, no worry about any comment. If you agree with me, market statistic is one aspect, company performance is another aspect. We see boom n doom and many different sector, but companies still perform differently. When CPO price / COP retreated 50%, there are companies that still doing very well. Opposite is also true. Our job is to keep looking at the performance of companies, the rest leave it to the luck. Cheers

Posted by Ezra_Investor > 2015-10-24 11:14 | Report Abuse

YiStock: "If you look at light asset companies like Scicom & MYEG, the EV/EBIT will definetely very high.. but because their ROIC is extremely high, people still willing to look at them. "
---------------------------------------------------------------
"A Good Company Is Not Necessarily a Good Investment"

Second, is Inari still a good investment? When I first learned of Inari, it was trading around 2.20 (damn, I seriously should have brought it last time, what was I thinking?). But it is 3.70 now. So, is it still a good buy?

Not necessary.

According to gurufocus.com,
- The Graham Number for Inari, is RM 1.74 only.
- Margin of Safety (Earnings Based) using Discounted Earnings model for Inari Amertron Bhd is -25.42%.
- EV/EBIT ratio for today is 17.06

So is it still a good buy? Inari is no doubt is a good company, but at current price, is it still a good investment? Hmm... I'm more skeptical to invest in it.

About Scicom and Myeg, we must always compare apple with apple, and orange with orange. No doubt they are same in the technology market, but their field is vastly different. One is Semicon, the other one is more leaned towards Trading/Services. It's like for example, a PC repairman VS a coder.

One thing about Scicom, if you looked properly, it's cash is depleting, FCF is also decreasing, but that's another story we'll not look into it here.

Posted by Ezra_Investor > 2015-10-24 11:24 | Report Abuse

And yes, I agree that, market statistic is one aspect, company performance is another aspect. For example, even at such a low oil prices, there are still few O&G related companies that actually performs quite good. But how much will Inari affected by the slow growth of smartphone sales... Err... well like you say, the rest leave it to the luck, hahaha.
After all, an investment relies on 70% fundamental, 30% luck.

Anyways, I always appreciate your articles YiStock - Frontkn, Inari, Canone, they're always good. Please keep up with the writings. Cheers.

Posted by YiStock > 2015-11-17 14:34 | Report Abuse

Be brave! Maximize the gain via Inari -WB. It is deep in-the-money. Thank you.