NOTION – Price has experienced a breakout above the RM0.435 level with higher-than-average volumes. The MACD Indicator has expanded positively above zero, but the RSI is overbought. Price may rally towards the RM0.50-RM0.55 levels after a short term pullback. Support will be anchored around the RM0.43 level.
B11. DERIVATIVE FINANCIAL INSTRUMENTS Type of derivatives Notional Value Fair Value as at 30.06.2015 as at 30.06.2015 Assets / (Liabilities) RM’000 RM’000 Foreign Currency Hedging Contracts -Less than 1 year 83,420 (8,760) -1 year to 2 years 14,882 (2,153) TOTAL _98,302 (10,913)
Anyway, summary even after 1 year, there's still 14m of hedging to go... U need to read what the TCF say, they say 'majority of hedging will expire in may' not ALL hedging.
there's no renewed hedging... afaik la. All until now it's stated clearly Q after Q, it went from over 250m in hedging, until now finally outstanding 100m hedging.
Every Q, you see a deduction of the hedging(settlement) amount between 20-30m one... This 100m hedge is still part of their old 300m (kinda insane) hedge contracts, that have not fully settled/matured.
So this Q, you will need to be prepared for a M2M loss of 10-13m, how much their profit can offset this loss, cant say for certain, but it's too big a M2M loss for them to be profitable this Q that's for sure.
to be honest, I'd prefer if their fundamentels is stronger. Can't really count of USD to RM being in such a good condition for long...
Not sure why they not willing to get into other product segments, or manufacture a wider variety of goods. I think their machine utilization rate is still low, and they didn't properly replace the sales lost from SLR entirely..
Don't be over pessimistic. The company FA is there. Dont forget they are the best precision engineering company. And i feel safe because of the high NAV is there too. If not because of the hedging, it should be making money right.
Yup, we can't deny the USD/RM will be benefiting the company and giving it a helping hand. But u think about it, those furniture stocks have up so much eg latitude, homeritz, liihen, hevea, 4 to 5 fold already and they all due to currency play also, nobody complain about it. Some industris performance is cyclical. So if u exclude the cycle then those companies assessment can be graded as junk. Currency advantage is consider one of the cycle. What I look at is how long it can sustain. I think in coming few years it's going to enjoy the good currency and bring the stock price to sky high.
Think in another way when their FA will be better with more retained earnings, more cash, better cash flow, everything will come back. And with those strong FA maybe the company can go back to their growth path, expand to new sector. Got money can talk and work, no money how to talk and work or expand. Simply expand before standing firm is a risk.
I agree with their current strategy to preserve cash and play safe for now. For now they are focusing in improving their current sector performance which is the most important to do now. U should be glad they are focusing back the field they are expertise in. I don't think it's hard for them to come back with a friendly environment like now.
When the whole M'sia of exporting companies enjoying extra profit from the badly deteriorated RM, you continually lose big money from the world lousiest hedging, you cannot deny that you are the most incompetent manager in the world. Or maybe you are the smartest evil siphoning out public money to your personal account disguised under the name of hedging?
Hmmm.. why want to throw? Siao meh? Already expect they loss making for this quarter in the first place.
Don't simply trick people to throw. Even if it drop, should be up soon after that. Because this should be the last quarter with loss.
Now the loss is 11 mil and that is due to forex loss 15 mil and creative bullshit equipment impairment loss 6 mil. Otherwise should be profit 10 mil. That's the profit amount for next quarter. When the first profitable results out, the uptrend will be explosive. 3 months only ma, cannot wait meh. Even 6 months I also can wait.
Next quarter got forex gain some more. This is what we been waiting for. Throw now? U really wan trick us to Holland. I'll buy more if it really can drop to my cost price.
Buy, eventually it will go up back because stock market is the prediction of companies futures earnings and not the past. It is nett cash position now.
Insane first few minutes... :) Yeah.. Next q will b profitable. Assuming that the forex has topped, I really don't expect USD to jump another 10% ba.. Actually USD dropped a bit up until now... So possible may even have m2m gain next q.
I just read the quarter report and it stated that the hedge will only completely finish next year June and sept.. Which mean coming quarter report still having the same loss? Any idea?
Good time to stop n decide again... If already buy, u need to digest properly. For those buy this morning, ur avg shld be 43 ba.. It's not too bad I think, r u sure u matched at 45? I'm sure a lot throw at 44 n below.. My 44 not matched :( lol
The problem is there's a lot of ppl who think it's profitable this Q and goreng the share price up. Also, a lot of ppl who too optimistic, all the talk about dividends, breaking 50 cents.
When you blow a bubble, don't be surprised the bubble pops
It's pretty surprising the wrong figure is published in the first place. For the figures to be published wrong TWICE.. that's stupid from bursa.
Such an important information, I'm sure bursa have a 2 man rule in place where the figure is confirmed by 2 person before publishing. Is the syndicate power really that wide, until can effect things in bursa?
But, fundamentally, I also will agree next Q gonna be good... However, at the same time, I've lowered the FY2016 EPS as well, as I'm concerned their sales is not performing
Risks to my assessment. +ve risk, notion can please surprise me, by getting new customer, or by increasing their product range with existing customer. (what happened with their glass business for example? So many things mentioned by tcf didn't happen d) +ve risk, QoQ I do believe all segments have bottomed out, so next Q I do expect sales to outperform.
-ve risk, USD increase another 5-10%, it's pretty much confirmed notion will be positive, just positive how much only. -ve risk, I've also decreased my trust in TCF's future guidance, as the things he said didn't really occur anymore, I would not blindly accept his promises or believe when he say new business d... (HP glass machine business for example)
kenanga still remain the TP 43 cents like usual. but the analyst is funny, i think he doesn't know about forex market/outlook and how to calculate/estimate forex hedge.
this quarter forex loss was a lot, due to RM was closed very irrationally low at USD/RM 4.43. it is believed RM was at it's bottom. now RM is climbing back from the irrational range after the FED has getting to clear the market uncertainty as the USD punters are retrieving in pushing USD and start profit taking their USD trade. it's significant, especially after Zeti also claim the RM is undervalued. now it's floating around 4.3-4.25.
so, most likely there won't be forex hedge loss in next quarter. in fact there should be forex hedge gain.
haha, i feel funny when the analyst and quarter report mentioned hedge is not yet expire and see it as a bad thing in future. while i personally don't wan the hedge to expire! haha, because it is a good thing for future that it is not yet expire. haha, so that notion will get back the some of the forex loss as gain!
btw, notion no need super high USD/RM to be profitable, even 3.5 is good enough. 3.8 to 4.2 is very very good for notion.
i personally think the USD will be around 4-4.3 in 2016, which notion will be very happy enjoying the currency advantage while free from another forex hedge loss.
when there is no more forex hedge loss, next quarter profit should be 10 mil, minimally. other than that, notion may gain back it's forex loss incurred in this quarter depend to the currency rate.
val-elta and i already calculated and knew this quarter will be loss making and we did warn u guys. i even explained on the possibilities and risks of both keeping it or letting it go temporary.
i still keep the shares even though it hit 47 cents recently. and yet looking forward to this opportunity to add more. choice is yours.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Val-Elta
682 posts
Posted by Val-Elta > 2015-11-16 13:09 | Report Abuse
aih.. 46.5 2k Q kena throw by shark :(