Posted by SuperMan 99 > 2015-12-31 23:53 | Report Abuse

HAPPY NEW YEAR TO EVERYONE!!!

Posted by Money_Master > 2015-12-31 23:56 | Report Abuse

Be happy Superman 99,

Based on latest 2015 Car Sales Statistics, indeed, Mercedes is capturing luxury market share segment from BMW and Audi.

Btw, i heard that for delivery of a new Mercedes requires 6-month waiting period .

Posted by SuperMan 99 > 2015-12-31 23:58 | Report Abuse

Happy New Year to you too, Money_Master... :)

Posted by SuperMan 99 > 2015-12-31 23:59 | Report Abuse

Long waiting period will definitely force certain potential customers to look for other luxury brands.

Posted by hyteo1992 > 2016-01-01 00:09 | Report Abuse

just curious, i checked all 3 latest quarter report of CCB, inventory keep increase, trade receivable and payable balloon until crazy. Payable itself 169,104,000, higher than cash plus retained profit. Higher than total non-current assets. No sign of reduction in receivable as well. And company start to borrow money for short term and operating profit had been negative for last 2 quarter. Does the company really earn money? Well we can say tat the company is selling the products in faster rate, therefore increasing receivable and payable is reasonable. But does this indicates poor management of the company?

Posted by SuperMan 99 > 2016-01-01 01:43 | Report Abuse

Good question, hyteo1992, we have to look at the inventories from the business point of view, you need to keep stocks to resale, when something is selling fast, you will tend to keep more stocks, if you read carefully on the stock turnover ratio below for the past 4 years, it is manageable & I would say in my opinion, very reasonable.

When your stock is only enough for less one month sale, you will risk the business with nothing to sell once no new stock come, that will hugely hurt the image of the company.
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2015Q3:
Revenue = 1,192m
Stocks in hand = 171m
Stock turnover ratio = 0.1435 (1.72 months)

2014:
Revenue = 922m
Stocks in hand = 85m
Stock turnover ratio = 0.092 (1.11 months)

2013:
Revenue = 645m
Stocks in hand = 116m
Stock turnover ratio = 0.1798 (2.16 months)

2012:
Revenue = 656m
Stocks in hand = 150m
Stock turnover ratio = 150/656= 0.2286 (0.2286 x 12 months = 2.74 months)

Posted by SuperMan 99 > 2016-01-01 01:45 | Report Abuse

For easier understanding, stocks in hand include cars for display in the showrooms & for test drive purposes.

Posted by hyteo1992 > 2016-01-01 01:50 | Report Abuse

well, i understand the logic behind inventory turnover rate after ur explanation. Thank you.
What about the payable and receivable? that is my main consent. In your opinion?

Posted by SuperMan 99 > 2016-01-01 02:05 | Report Abuse

Though the trade receivables are relative small compared to turnover, but I do not know what is in it. I do now want to simply answer without any solid proof, sorry about that.

But I will not worry so much as the quantum is small, if the amount goes up to 200m or more, then you will not see me here answering you... :)

But for trade payable is easier to explain, when you buy goods, your suppliers will give you terms, the more you buy, the more you will hutang your supplier.

But to some extent, your supplier will not want to give more goods to you, then you will need to find other financial resources to finance the purchase of goods, then banking facilities like Bankers' Acceptance will be very useful.

Posted by hyteo1992 > 2016-01-01 02:46 | Report Abuse

ok. Personally i takes receivable and payable seriously because these 2 are the most easily manipulated. Thank you for your explanation superman 99. Goodnight and HAPPY NEW YEAR !!!

Posted by SuperMan 99 > 2016-01-01 09:37 | Report Abuse

Yes, hyteo, after transmile case, now we all see the breakdown of trade receivables in all annual reports.

Generally, the acceptable receivables over turnover ratio is 2-3 months, same goes to trade payables. Any longer terms will surely hurt the cashflow and high potential of turning bad.

Happy New Year to Everyone!!!

Posted by paperplane2016 > 2016-01-01 17:08 | Report Abuse

Hyteo, u are too honest! Later kena tembak....hahahaaaaaaa

Posted by kancs3118 > 2016-01-01 19:53 | Report Abuse

Hi Superman99, just asking, please share with us how do you get the PE of 13.964? is it the 6 years average PE? just take the EPS for all of 6 years and divide by average share price?

Posted by SuperMan 99 > 2016-01-01 22:45 | Report Abuse

Hi kancs, sum up PE for 2008 to 2014, exclude 2013 as it will be unrealistic, then divided by six years.

Posted by Desa20201956 > 2016-01-01 22:52 | Report Abuse

why shouldn't CCB sell at PE of 6?

its a cyclical stock at its peak.

Posted by SuperMan 99 > 2016-01-01 23:16 | Report Abuse

Hi Desa, I personally not agree it is cyclical stock, it is more down to the design of the models.

Posted by Desa20201956 > 2016-01-01 23:17 | Report Abuse

have it your way.
only the brave buy motor stocks for 2016.

Posted by paperplane2016 > 2016-01-01 23:43 | Report Abuse

First time I saw pe can be calculate this way.......crazy

Posted by kancs3118 > 2016-01-01 23:58 | Report Abuse

actually, it is hard to say that CCB is a cyclical stock - 2015 was very tough on the economy - logically, CCB sales should suffer since mercedes benz operated in the niche and premium market segment. But then, 2015 proved to be a good year (in terms of sales and profit) for CCB despite a tough year on the economy. So, i don't think CCB is a cyclical stock.

i think HapSeng Star is a greater threat to CCB.

Posted by kancs3118 > 2016-01-02 00:00 | Report Abuse

Interesting article: but don't know how true is it???
http://www.malaysiandigest.com/business/582983-mercedes-benz-malaysia-optimistic-to-sell-more-cars-next-year.html

Mercedes-Benz Malaysia Optimistic To Sell More Cars Next Year
GEORGE TOWN: Premium German carmaker, Mercedes-Benz Malaysia Sdn Bhd, is upbeat on its sales for 2016 after 8,200 units were sold until September this year.

Its vice president of sales and marketing Mark Raine said he was optimistic of the growth in sales next year as the demand for the locally-produced models – such as the C, E and S classes – was still there.

He said after achieving about 65% sales increase year-on-year for 2014 against 2015 – the group would continue to expand to meet demand.

“I see a good opportunity next year for us to chart growth in our sales and we are eyeing to beat the record we achieve this year for 2016,” he told reporters on the sidelines of the Maritime International Showcase today.

He said the group currently has 28 showrooms nationwide and planned to open a few more to provide better services to the customers in line with the strong growth potential.

“We opened a showroom in Kota Kinabalu, Sabah, last week to ensure better customer satisfaction,” he said.

He said the group has introduced an E-Class model (Edition E) and two diesel models (E300 hybrid and CLS350).

“The launch will offer our customers more models to meet their personal requirements and needs which will contribute to our growth,” he said.

For the third quarter this year, Mercedes-Benz Malaysia’s year-to-date car sales jumped 70% to 8,196 units from the 4,817 units sold in the same period of 2014.

Posted by Desa20201956 > 2016-01-02 00:00 | Report Abuse

It's the exporter bosses ........hahaha.

Not for me

Posted by SuperMan 99 > 2016-01-02 00:33 | Report Abuse

Paperplane, most bankers' analysts use this method in case you don't know.

Posted by SuperMan 99 > 2016-01-02 01:08 | Report Abuse

Let's talk about market perception on PE, if look at all companies in bursa, every company will have different PE ratio. Even companies within the same industry may have different PE as well.

First of all, PE 10 is my target price, not my estimation on how the stock should go, you may have your own target price over CCB, say7, 8 or 9, I am ok with it anyway, as there are hundreds of people out there selling their CCB shares now at the current price/PE.

I can't decide for market & I do not think I have any authority or power to convince everyone to accept my view, or else, the price should have gone limit up on 31/12/2015 then.

I just want to share how I get it & hope you can understand my basis, agreeable or not, it is your choice. As I say in article, you are welcome to disagree. (I did mention in my article)

Mr Market is the one who will decide what is the right PE should go for a particular company. (Though Benjamin Graham & Warren Buffett always think that Mr Market is always changing his mind or view on all stocks day in day out.)

Why I use historical average PE for the stock? Because that was the market view for the stock over the past years.

I have no idea why CCB is trading at lower PE than other car distributors, but I think everyone can put up as many assumptions as he wants to explain on the situation. I don't think I will spend my time of doing that.

Same goes to Gadang, I have no idea why Gadang was dropped from RM2 to RM1.16, then went up again to RM2.15, all happened within 6 months. All I can say is Mr Market is so unpredictable.

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I use the same basis of calculation to find out that CCB match my all criteria.

When Gadang & CCB are doing very well year after year for past few years, the PE is getting lower at the same period of time, then it is very interesting to me, it is where I see it as an opportunity to invest.

I think I have mentioned many times in various forums that first thing comes to my mind is the safety of my hard earned monies. Low PE is always providing good Margin of Safety.

Rule No.1: Don't lose money
Rule No.2: Always remember rule no.1

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I make good money from reading Icon8888's articles on Gadang in i3 forum & after doing my own homework. I think CCB is another good opportunity to me & I would like to return the same favour to i3 forum users by sharing my homework done on CCB.

Hope everyone can see what I see, I may not correct anyway & you should responsible & liable for your own action & do your own homework if you decide to invest in CCB after reading my CCB article.

Posted by paperplane2016 > 2016-01-02 01:11 | Report Abuse

No wonder bank analyst never correct....haha

Posted by paperplane2016 > 2016-01-02 01:13 | Report Abuse

Next yr tough not? Yes. Everyone said property slow, bank bad debt to rise, consumer spending to slow, economic GDP slow, everything bad. Export maybe good, got govt project maybe good, low fuel, good for transport and also producer using many oil.....car? Still big no no. Tppa has many yrs to open yet, forget it.

Posted by paperplane2016 > 2016-01-02 01:15 | Report Abuse

I ask my free, oi, Benz said next yr expect sell more cars leh, can buy hapseng?
He replied, DUI, guns common sense boleh? Gst plus all these hike jokes. Also, you think the salesman will say, no we expect to sell lesser car next yr? You guns otak boleh?
I diam diam after tht.....

Posted by SuperMan 99 > 2016-01-02 01:16 | Report Abuse

Paperplane, this one I put up my hands to totally agree with what you said:

No wonder bank analyst never correct

Posted by SuperMan 99 > 2016-01-02 01:17 | Report Abuse

I never trust bankers & newspapers, better do own homework, be responsible for own self.

Posted by Desa20201956 > 2016-01-02 01:18 | Report Abuse

Low PE is not a cure all.
It depends.........

Posted by SuperMan 99 > 2016-01-02 01:23 | Report Abuse

Agreed, Desa, all property stocks now having very low PE, will I go in now? I don't think I will.

I can't predict as good as those masters/sifus on picking up export companies, I rather choose what I feel most comfortable.

Posted by SuperMan 99 > 2016-01-02 01:26 | Report Abuse

I try to avoid companies with sudden jump in profits due to gain on disposal of something or forex gain, that may also make PE low, but that's not sustainable in my opinion.

I rather miss the chance in investing those companies but wish all good return to those already invested.

Posted by Desa20201956 > 2016-01-02 01:32 | Report Abuse

Banks cannot buy, domestic consumption, cars, houses, properties, , insurance, travel cannot buy......
That is the conventional wisdom, not much left.

The brave will give two fingers to conventional wisdom and be a contrarian.

That is why I started by saying only the brave will buy CCB.

For me, selected small cap stocks still got room for me to play.

Posted by SuperMan 99 > 2016-01-02 01:37 | Report Abuse

Warren said he is buying no matter how good or bad on market. Hope I can learn something from him.

Good night.

Posted by SuperMan 99 > 2016-01-02 20:30 | Report Abuse

Hyteo, the following can be seen from the 2014 annual report:

Most of the Group’s trade receivables are arising from financier in respect of finance provided to end customer, sales to reputable public listed companies and government or semi government institutions.

Posted by hyteo1992 > 2016-01-02 22:21 | Report Abuse

bcos of ur post, i did some research about main competitors for Mercedes especially for C class. I research for new cars or new models which priced below rm 400k. Apparently next year audi will release new A4 series, honda release new civic & civic type-R, hyundai, mazda all also doing their best. C class may not continue as good as this year. At least as a youngster, i believe majority young people will prefer go for new Audi A4 compared to Mercedes. Honda civic type-R perhaps for a lower budget sport car.
This is just my opinion. I am not opposing CCB is great company. Just having discussion here.

Posted by paperplane2016 > 2016-01-02 23:31 | Report Abuse

Omg, hyteo. Don't waste your time telling old ppl any car better than Benz, they can't accept it and will use all vulgar languages over you. You better get your bullet proof shirt ready now!

Posted by SuperMan 99 > 2016-01-03 00:14 | Report Abuse

Thank you so much for the info, hyteo, it is always great to learn something new through discussions. It is correct attitude to look/study at various angles to see if the stock is the cup of your tea or not.

If you don't feel comfortable on any particular stock, just move on & look for next one, surely you can get one sooner or later.

Posted by kancs3118 > 2016-01-03 12:59 | Report Abuse

@ SuperMan99, i am quite intrigued by what CCB has done in FY14 - whereby it paid off the entire Banker's Acceptance of $90M using purely operating cash flow. If proven, then this company has the hallmark of a franchise - which is what Warren Buffett coined a company with an enduring competitive advantage.

Just imagine the ranks of MAtrix Concept, Gadang and Tambun Indah.

Upon closer scrutiny on the Cash flows Statement for FY14, it seems that they are able to negotiate better terms with their Trade AR and has a good standing with Mercedes Benz Services.
- Firstly, CCB started off FY15 with a huge O/B of stock (from FY14) and they pared down by $31.7M. Consequently, there is a quantum improvement in stock turnover days from 81.6 days (FY13) to 44 days (FY14). This means they are selling like crazy and evidently, FY14 sales has improved by 42.3% over FY13 without the corresponding increase in Trade AR. Indeed, Trade AR stays largely the same btw. FY14 (RM50.3M) vs. FY13 (RM51.5M),
- they managed to reduce their Trade AR turnover days from 29.2 days (FY13) to 19.9 days (FY14) which shows they have amazing bargaining power over their Trade Receivables, but what is even more amazing is this:

- they managed to increased their Payables to RM37.2M as shown in their Cash Flows Statement. But then, we expect to see that their Trade AP turnover days to shrink considerably but the Trade AP turnover days remain largely the same at 24/25 days for both FY14/FY13.

How can this happen??
(I have shared the gdoc link here to the above ratios)
https://docs.google.com/spreadsheets/d/11o6fG1fe_k9JdFLXhuou-WyXftzmuGTa9mubeCLehe0/edit?usp=sharing

Posted by kancs3118 > 2016-01-03 13:00 | Report Abuse

The answer is:

Interest free hire-purchase floor plan facility granted by Mercedes Benz.

Hence, upon closer scrutiny on their Trade AP and Other Accruals (note 19 to the Annual Report for FY12 to FY14), CCB is able to use its position as a 49% shareholder in Mercedes Benz to draw down an interest free loan from Mercedes Benz in the form of an interest free revolving hire-purchase floor plan facility (i don't know what is that...).

That explains why Accounts Payable increased by RM37.2M (without a corresponding reduction in Trade AP turnover days) which help to boost the Operating Cash Flows significantly to pay off the Banker's Acceptance of RM90M in FY14.

Using this facility, CCB has managed to reduce the cash conversion cycle from 85.7 days(FY13) to 39.3 days (FY14).

Posted by kancs3118 > 2016-01-03 13:05 | Report Abuse

There is a possible short term liquidity issue and inability to pay special dividends during 2016:

Following CCB's rapid growth in FY14 to Q3FY15 (sales increased by 77.4% to-date), the Trade Payables and Other Accruals have increased significantly by 70.5% from RM119.3M (FY14) to RM169.1M (Q3FY15). In addition, they have to draw down a Banker's Acceptance of RM30.0M.

There is not enough cash on hand to pay off Mercedes Benz but i suspect Mercedes Benz is the one that ask them to party on.

Per Q3'15 report:
CCB has failed the acid test because:
- Trade AR and Other Receivables: RM94.9M
- Cash on hand: RM37.2M
- (excluding inventories because inventories are not considered liquid especially Mercedes Cars and motor vehicle spare parts);
Total = RM132.1M
- less: Total liabilities: (RM217.3M)
Total = shortfall of (RM85.2M)

Posted by kancs3118 > 2016-01-03 13:05 | Report Abuse

Will there be any SPECIAL dividend of RM1 plus to be paid during FY2016?

It seems now that all their cash is tied in inventories but inventories turnover days is more than 1 month (44 days). I don't think this is high risk because after all, Mercedes Benz is the one who bankroll them and ask them to party on and Mercedes Benz stands to gain because their car sales went through the roof but it is better to keep vigilant on this.

Due to this short term liquidity issue, i don't think they can pay special dividends during 2016. In addition, if CCB wants to repatriate its profit back to the parent company, Jardine Carriage in Singapore, it needs to declare more dividends to make up for the shortfall caused by the weaker Ringgit. It is reasonable to wait for 2017. Also, in the Q3’15 Qtr report, CCB has mentioned it wants to expand its distribution network.

Posted by SuperMan 99 > 2016-01-03 16:09 | Report Abuse

Hi kancs, I love your works and these are truly admirable.

I don't quite agreeable to the last sentence, which on the CCB's ability to pay special dividend in 2016.

I am actually studying their cash flow statements for 2008 & 2009, I have been thinking how they managed to frank so much special dividends during the 2 years but without incurring much debts or worsen the balance sheet.

Posted by kancs3118 > 2016-01-03 16:22 | Report Abuse

@ SuperMan99, i think it is quite safe to park the money here for 3 to 6 months to enjoy extraordinary capital gains - aka to ride the mercedes sales growth....and "cabut" after that...for long term, i prefer Tambun Indah - even though it is a property counter but it is more like Matrix - it has got everything to offer - growth, constant dividend payout, good corporate governance (unlike that stupid GOB~!!), exposure to mainland Penang, Tambun Biscuit...it is hard to buy into TamBun Indah at present price of RM1.40 if not for the property crash, frankly, i am just here at CCB for the quick money.

Posted by SuperMan 99 > 2016-01-03 22:14 | Report Abuse

I am monitoring Tambun as well, now waiting for their sales figures in the coming QR, as some claimed Tambun has registered interest to purchase their units in new developments but was waiting for licenses from the relevant authorities.

Posted by paperplane2016 > 2016-01-03 22:18 | Report Abuse

Result velum stable, sudah strt khayal

Posted by NOBY > 2016-01-05 09:24 | Report Abuse

Definitely worth a look... but I checked this website http://paultan.org/topics/special/maa-vehicle-sales-data/ and it seems the sales have gone down in Q4... For Oct-15 and Nov-15 total sales volume is 1200 cars. They need to sell about 2000 units in Dec-15 to match Q2 and Q3 numbers...

Dec-15 ??
Nov-15 929 Q4 - 1875 (2 months data)
Oct-15 946
Sep-15 1023 Q3 -3106
Aug-15 1033
Jul-15 1050
Jun-15 1022 Q2- 3112
May-15 1152
Apr-15 938
Mar-15 986 Q1- 1921
Feb-15 935
Jan-15

Posted by paperplane2016 > 2016-01-05 10:10 | Report Abuse

Cannot be mah. E calls c class whatever class look nice. Data must be wrong.hHHHHaha. boh chow ccccccc

Posted by paperplane2016 > 2016-02-15 01:14 | Report Abuse

Still got 73% upside kah? Ccb?

Posted by Desa20201956 > 2016-02-15 01:18 | Report Abuse

superman got his krypton at the peak price. and died.

Posted by paperplane2016 > 2016-02-15 02:01 | Report Abuse

This superman fly to Holland Liao, he diam diam not dare lansi now after All his call crash.....