Posted by bracoli > 2016-02-01 18:31 | Report Abuse

Best nye

Posted by kcchongnz > 2016-02-01 18:37 | Report Abuse

Damn good analysis and a good story. Well done.

Posted by kcchongnz > 2016-02-01 19:19 | Report Abuse

"I do have a CPA though (please don’t start stoning me saying that Accountants make bad investors)"

Where is the statistical significant data saying that accountants make bad investors? It is just a sweeping statement.

Accountants may not be the best investors, but having the knowledge of the business will certainly avoid losing big in the stock market.

Which is more important, making big or avoid losing big in the stock market?

I will definitely vote for the later. That should be the same for most retail investors.

Posted by duitKWSPkita > 2016-02-01 19:22 | Report Abuse

KC chong..

U re cute tonight.....hahahahah

Posted by Desa20201956 > 2016-02-01 19:24 | Report Abuse

Accountants are not comfortable with concept stocks.

For concept stocks, one have to approach Marcus Chan CFA, CIMB.

Posted by duitKWSPkita > 2016-02-01 19:24 | Report Abuse

Thanks Cephasu writer for fundamental write up...

Posted by kl foong > 2016-02-01 19:36 | Report Abuse

A very wonderful write up.

My salute.

Posted by apini > 2016-02-01 19:41 | Report Abuse

thanks cephasu,I like your analysis very much.

Posted by pputeh > 2016-02-01 20:26 | Report Abuse

Thank you for a pains taking write up. In one sweep you have painted a picture of more than a thousand words. Your sharing is much appreciated. Salute.

Posted by Icon8888 > 2016-02-01 20:27 | Report Abuse

nice write up, dude

Posted by cephasyu > 2016-02-01 20:38 | Report Abuse

Wow, thanks for all the kind words and encouragement bracoli, kcchong, duitKWSP, KL foong, apini, pputeh and icon8888!!

I am honored!!

Posted by kcchongnz > 2016-02-01 20:40 | Report Abuse

"If you want a DCF valuation, look up KCChong or LCChong (are they brothers??)"


"Over the four seas, all are brothers"


KCChong has leaarned some DCFA from LCChong before.

Posted by cephasyu > 2016-02-01 20:46 | Report Abuse

Ohh haha, thanks for clarifying, KCCho.. I mean brother ;)

Posted by alpha investor > 2016-02-01 21:14 | Report Abuse

Very nice write up, a lot of effort has been put into this. Thank you! Hope to see more write up from you in the future!

Posted by TeckChuan Lee > 2016-02-01 22:04 | Report Abuse

awesome effort.. salute

Posted by seius > 2016-02-01 22:56 | Report Abuse

very useful writing, thank you

Posted by maroken > 2016-02-01 23:06 | Report Abuse

Great write-up! good fundamental analysis. keep it up.

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

Thanks alpha, teck chuan, seius and maroken!

Will write the next piece after another thorough round of analysis!

Posted by Winner > 2016-02-02 05:31 | Report Abuse

Thanks so much for the detail analysis!

Posted by sosfinance > 2016-02-02 08:29 | Report Abuse

Look for capex last 5 years and ROIC. This will provide a better view on expansion plan and real return. I hv wrote about Padini many months back, I remember their capex was high (indicates expansion) and ROIC of 38%.

Posted by unclejoe > 2016-02-02 08:40 | Report Abuse

cephasyu, great job!
I am investor of Padini too. I enjoy reading your article, hope to see more in future, keep up the good works.
Take care and thank you.

Posted by shinado > 2016-02-02 11:28 | Report Abuse

Good analysis. Great work and keep it up!

Posted by Jason Lim > 2016-02-02 11:45 | Report Abuse

I enjoy reading the article as much as my apparel from BO.

Posted by Insider_Tips_81 > 2016-02-02 15:15 | Report Abuse

nice one

Posted by speakup > 2016-02-02 15:17 | Report Abuse

padini takeover voir?

Posted by Newbhere > 2016-02-02 19:33 | Report Abuse

Cephasyu. It was a pleasure reading your write-up. Nicely written with good informative pictures, graphs, comparisons and appendices. Please keep up the good work. Would like to see more of your write-ups which is really refreshing and enjoyable to read.

The following are my 2 cents opinion:
1. What do you think of the prospects of Padini venturing into the online business and how does this contribute to Group's topline and bottomline? Do you see this as an opportunity or a weakness versus existing competitors who are in that field?
2. What is the contribution to the Group's topline and bottomline for foreign sales transactions and how does the fluctuation in forex affect the Group?
3. On the comment for Price Control and Anti-Profiteering, I don't think this is relevant or even applicable to the Group. They are not in a position to raise their selling price significantly especially given a tonne of competition from both online and offline. Hence, they are sticking to their strategy/niche which has been clearly articulated in your write-up.
4. It would be good if you can show some information or graphs and comparisons from the cashflow perspective, especially on FCF and how well the funds have been used for working capital, organic growth/expansion and for dividend payouts to the shareholders.

Posted by cephasyu > 2016-02-02 22:40 | Report Abuse

Wow thanks, I am so flattered by all these encouraging comments. Thanks winner, sosfinance, unclejoe, shinado, jason, insider and newbhere!

Speakup, I am not quite aware about Padini contemplating takeovers. I can only source publicly available information, and I have not stumbled upon any sort of news like that.

Newbhere, thanks for your questions. I will try to address some of them quickly, however I suspect that my answers may be a inadequate.

1. Online sales is a tricky distribution channel . Padini has mentioned that they are exploring this avenue. However I have seen brick & mortar business like Parkson try to venture into the online space and fail. I would actually prefer them to focus on what they're good at and excel at it. There are still plenty of Malaysians who prefer to shop in malls. I see the pressure of Padini to venture into the online space as a threat, really.

2. Foreign contributions as I mentioned is about 5-6%. I didn't find disclosures on effects on net profit. They have recognised some foreign gains in recent quarters but it's negligible to my overall thesis. My friend has asked me about the possibility of foreign expansion, and I think that while it is a possibility, Malaysia still has enough room to grow, and they are doing it well.

3. My investment mentor did tell me that the Anti-profiteering act may be irrelevant. You're right in pointing it out. I added that in because it could be a possibility (mentioned in their latest Annual Report), as unlikely as it may seem/ it may even be a bad idea.

4. Unfortunately, this exercise is a little tedious, and I decided against it in this article. I do appreciate DCF/ FCF analysis though, and thought that LC Chong has done a good job with it. I might dare to borrow his work instead.
http://klse.i3investor.com/blogs/kianweiaritcles/87393.jsp.

Overall though, I am grateful for your comments (: Thanks Newbhere!

Posted by davidyukh > 2016-02-05 01:15 | Report Abuse

good job with the analysis, looking forward to more insights!

Posted by Ian Bong > 2016-02-16 22:27 | Report Abuse

Did you make all the charts? This is amazingly detailed.

Posted by Ian Bong > 2016-02-16 22:30 | Report Abuse

By the way who's your mentor?

Posted by cephasyu > 2016-02-20 11:23 | Report Abuse

Oh lol Ian sorry the late reply.
Yes I did make all the charts myself (besides the Bloomberg ones/ commodity ones). Thanks for the compliment

My mentor is a low key dude. He's one of the biggest individual investors in nestle

Posted by 3iii > 2016-02-20 11:48 | Report Abuse

cephasyu Thanks for the nice charts. You have done a lot of work and this is much appreciated. For someone who is looking for a annual return of 15% or more for the next 5 years, what would be the buying price of Padini to get this return over the period?

Posted by cephasyu > 2016-02-20 21:51 | Report Abuse

Hey 3iii. Thanks for the nice compliment :)
Unfortunately your question is a little too difficult for me. Projecting 9 months ahead is really difficult, even more so 5 years ahead. There could be a variety of factors which may swing padini's fate in the future. Online shopping could really pick up in Malaysia. Padini's over ambitious expansion could have a backlash at them when the economy takes a massive hit. I can't predict the future, I can only make bets.

What I can tell you is this is a high ROE (excluding unit trust/cash) company that has delivered and consistently paid dividends for the past 2 years. They have also been successful in building their brand and p I wouldn't mind holding it for the long run, but at the same time I would be diligently looking at Q results and annual reports whenever they are available to keep reassessing my buy/ hold call.

So I'm sorry I can't give you that sort of answer. If you want a hold and sleep type stock, I think maybe the only one I can think of is Berkshire Hathaway. But then again that's until that old man kicks the bucket

Posted by Jye2010 > 2016-03-27 10:38 | Report Abuse

Great analysis with a dose of humour..Thanks!