Posted by nikicheong > 2017-03-28 21:10 | Report Abuse

Guys tell me where to get info about Prolexus rights issue? Please thanks. Cursory glance says this could be a good long term hold, now to decide how much lower it goes and to delve further into the financial statements and business outlook.

Posted by nikicheong > 2017-03-28 23:16 | Report Abuse

Guys I'm reading the AR, when they say Vietnam plant commissioned in H2 2017...does it mean that's when they plan to start building it, or that's when the plan to have had completed it?

Posted by R40s > 2017-03-29 00:05 | Report Abuse

Hi Niki, the word "Commission" means the factory is ready and is authorised to start production.

According to the RI prospectus, this should be in Q3-2017, or 6 months from now...

Posted by nikicheong > 2017-03-29 00:30 | Report Abuse

What is your opinion on Amsecurities report? Still a BUY but TP is downgraded.

Dec: https://www.amesecurities.com.my/gc/download/Prolexus%20161219.pdf

Mac: https://www.amesecurities.com.my/gc/download/Prolexus%20170328.pdf

Posted by R40s > 2017-03-29 00:48 | Report Abuse

Prolexus latest Q2-2017, compare Q-o-Q it is +9% increased revenues, +20.5% PBT, +9% Net Profits, and 7.02% NPM, same.

Compare to Q1-2017, it is +24.4% increased revenues, +41.8% PBT, +18.8% Net Profits, and NPM decreased slightly from 7.36%.

This shows that this Q2 results is quite good, both in terms of Q-o-Q and Q-2-Q. But Mr.Market is doing injustice to Prolexus share prices today...

The Company's cautious statement about "uncertainty of global economic conditions" may be the cause. But look at it this way, isn't this conditions going to affect most companies in Malaysia? Then why a good performance stock like Prolexus take Mr.Market's beating while others are enjoying the market's bull run? Does this make sense?

IMHO, this is a glaring example of Mr.Market's inefficiency.

Posted by R40s > 2017-03-29 01:09 | Report Abuse

Sorry, correction, should be YoY instead of QoQ, and QoQ for Q2/Q1 comparison.

Posted by R40s > 2017-03-29 01:14 | Report Abuse

Niki, AmSec cut their TP by reducing PER from 12 to 10, because they anticipate slower than expected growth until 2018 when their new factories in Vietnam and Johor will be operated.

Posted by noah > 2017-03-29 09:47 | Report Abuse

niki & R40s,
this is also the question that puzzled me.

"commissioned" should mean start operation usually.
but up till Jan 2017, their money allocated to build both factory in Vietnam and Kluang is still mostly untouched.

and they did state the new plant will start seeing contribution in FY2018.

which raise the question, does their "commission" means start the building process?

Posted by Dolly_Chai2 > 2017-03-29 10:56 | Report Abuse

guys... i do agree with what noah said.. i also noticed that they havent used much of the allocations for factory expansion in Vietnam and Kluang.

with this, what the AmSec report mentioned may be more accurate:
Q1 2018 - Vietnam apparel factory to start operation and to contribute revenue/profit
Q2 2018 - Kluang fabric mill to start operation and to contribute revenue/profit

I think it is not so possible for any of these 2 plants to start operation within 2017...

perhaps that is why many investors/speculators do not enter yet and would rather wait till early 2018...

but bear in mind, it may be the best time to enter now coz the price may also hike up to a certain % by early 2018.. Mr market is not stupid... but for those short-term speculators, they do not care.. they just want to go in and out quick and a 5-10% profit is good enough for them so they dont bother entering at a higher price...

but for us value investors, we buy at discounted price vs its EV/EBIT & high ROIC, and just wait... to achieve a more attractive gain then just a 5-10% profit...

so it is up to you... no right or wrong... it's just the different way/methodology of your investment

Posted by omnigunk > 2017-03-29 11:00 | Report Abuse

I agree with Dolly, patience. Airasia was a good example.

Posted by Dolly_Chai2 > 2017-03-29 11:02 | Report Abuse

Hi Jon, I have sent you an email.

Posted by noah > 2017-03-29 12:17 | Report Abuse

Great analysis Dolly!! :)
Keep it up

Posted by Insider News > 2017-03-29 12:19 | Report Abuse

Dolly should create a blog to let more people to see, good sharing

Posted by Dolly_Chai2 > 2017-03-29 15:01 | Report Abuse

haha... you guys are flattering me.. i am just a super ordinary investor like anyone of you...

in fact, there are also some ppl who do not agree with what I said in other forums...

I am fine with disagreement as everyone has different points of view...

what I can't tolerate is their unethical way of providing manipulated/misleading info in order to promote another share (example: go to Evergreen forum you will find out one particular loser/joker who is doing this)...

everyone there knows his personal agenda yet he is still acting like a clown there.. sometimes i really feel sorry for him... haha

Posted by Dolly_Chai2 > 2017-03-29 15:04 | Report Abuse

i would also like to highly applaud the good sharing by R40s, noah, Jon Choivo, etc (too many to name here one by one)...

they are indeed sharing real and good info...

good job guys, forum is a place where we can exchange opinions so we should keep up all this good discussion...

Posted by fkuling > 2017-03-29 16:19 | Report Abuse

still can buy?

Posted by Gentlemen > 2017-03-29 21:09 | Report Abuse

I think now is the right time to go in... good luck

Posted by R40s > 2017-03-29 23:11 | Report Abuse

The Q2 report did not mention any delay in the factories construction, under the report's pg.8 Section-12 :

12. Capital commitments
As at the reporting date, the capital commitment of the Group is as follows:
Property, plant and equipment:
- Authorised and contracted for 27,306
- Authorised but not contracted for 99,840

So the rm27.3M funds was already committed and contracted out for construction of the new factories. The estimated total costs of the factory buildings is rm30.5M (rm13.5M Vietnam, rm17M Johor), shows that the work progress is still on track because factory building must be completed before M&E works and machinery installations can start, also, bear in mind that the Q2 report cutoff date is 2 months ago at 31.1.2017.

The AmInvest report also said they are on track but gave a different dates (Q1 & Q2 2018) from Company's projected dates (Q3 & Q4 2017), so whose dates should we trust?

I think the Company's dates should be more reliable as they are answerable to the dates given in their prospectus.

Posted by R40s > 2017-03-29 23:33 | Report Abuse

From dictionary, the word "Commission" means:

(Past tense: commissioned; past participle: commissioned)
1. Give an order for or authorize the production of (something such as a building, piece of equipment, or work of art).

2. Bring (something newly produced, such as a factory or machine) into working condition.

So the Company's wording "Fully Commissioned" should means that the date of factory start-up and production.

Btw, note the AmInvest made an error in the latest Book Value of rm1.23 instead of rm1.33, and gave P/BV = 1.1 instead of 1.02. Does that mean they have underestimated the fair value by 10 sen or more...?

Posted by nikicheong > 2017-03-29 23:42 | Report Abuse

It's still a bit crazy to me. Start building in 2017 and have it ready in 2018. Can meh? I thought it will need to take time to build and scale up. Or maybe I am thinking of too high tech stuff (like Tesla's plants). So how long would a factory like they are building in Vietnam or the mill in Malaysia take to make normally? Is 6 mths - 1 year a reasonable timeframe to get everything built and ready for production?

Posted by sctan > 2017-03-30 00:06 | Report Abuse

maybe aminvest referred to fully operational date. when factory starts production, it will take few months to operate at full capacity.

Posted by R40s > 2017-03-30 00:11 | Report Abuse

Started in Q3 & Q4 2017, commission in Q3 & Q4 2017, so minimum 1 year, maximum can be up to 15 months, if start date is early Q3/Q4-2016, and late Q3/Q4-2017 commission. Submission for factory design approval started earlier...

Factory buildings are very simple structures, and sewing machines are standard equipment that can be installed quickly, so 1-year timeframe is achievable...

Posted by R40s > 2017-03-30 00:47 | Report Abuse

Sctan, agreed, initial few months would produce less because of new operators skill and learning curve, or installing production lines in stages while waiting for new job orders to increase, in order to minimize capacity underutilization.

But nevertheless, the initial production should significantly boost up the revenues and profits after the new factory startup and then increase production gradually.

Posted by sctan > 2017-03-30 00:52 | Report Abuse

but labour cost and some startup cost will drag down the profit margin, for first few months. so prepare to have higher revenue, but lower profit.

Posted by Dolly_Chai2 > 2017-03-31 09:56 | Report Abuse

guys.. glad to have you all bring up such good discussion.. keep it up!!

Posted by R40s > 2017-03-31 22:25 | Report Abuse

Yes, it's very good for us to share information, analysis and opinions. Even if our opinions may differ, but it's useful to know other's opinions, as long as they are not malicious...

Posted by R40s > 2017-03-31 23:16 | Report Abuse

Even Cold-eye's opinions can be challenged, like this one, I think Lawrence Tan made a very good point vs Cold-eyes:

Pg. 155 蛛丝马迹
 
每当公司在展望（Prospect）里提到Challenging，大家不要被这个字眼给吓着，难道每个公司都讲challenging，我们就不投资了？
 
如果你随便问一个商人行情如何，就算行情很好，他也会跟你讲生意难做，因为怕你来做，本来好做都变不好做了。
 
除非是金字塔传销、保险、Forex、快速致富，才会告诉你我有多赚钱，你不加入就是笨。
 
http://klse.i3investor.com/blogs/kakashit/119504.jsp
.

Posted by R40s > 2017-04-01 00:00 | Report Abuse

Take for example Tomypak's latest Q4-2016 report to see two issues discussed by us above :

1. Company Prospects -- see page-12, #3, the same kind of statement is used, "forthcoming year is expected to be difficult and challenging given the continuing uncertainties of the global economy as well as volatile foreign exchange rate". This sounds even worse than Prolexus statement...

2. Utilization of RI proceeds vs Factory's construction: see page-13, #6, Tomypak's RI was also done in June last year, their new factory was completed in Dec.2016 and commissioned in Jan.2017, but the rm57.4M proceeds still showed balance unutilized of rm17.3M in 31.Dec.16 or 30% balance. This show that the balance sum cannot reflect the actual construction's progress. Because progress payments are often made several months after the actual progress.

Posted by R40s > 2017-04-01 00:29 | Report Abuse

Sctan, I agree that the first few months after startup the revenue will increase even if only half capacity is utilized because of lower productivity of new operators initially, and job orders may take time to buildup, but profits maybe higher, only the "profit margin" maybe lower, or maybe even this also may not be lower because the new factory will get higher tax incentives, and when the new fabric plant start to supply materials "in-house", the profit margin will become higher...

Posted by noah > 2017-04-01 13:38 | Report Abuse

in my opinion, management will not change the outlook from 'stable' to 'challenging' simply for nothing.
they would have sensed some challenges with the reducing orders from UA.

But in fact if you look closer, UA is still growing, just that at a slower rate.
The problem is their OEM factory across the world is increasing their capacity exceeding their growth which leads to reducing profit margin.

PRLEXUS still have an advantage as they still have Nike as their another major client.

Based on interview with PRLEXUS chairman, he state its not easy to be OEM factory for those brand, they require a very high requirements to be and maintained. They will audit the factory from time to time and so far they are satisfy with PRLEXUS's performance.

so new competitor would not just appear suddenly.
those brand perfer to stick to their existing partner which have years of relationship.

and furthermore, its not feasible for Trump to move clothing industries back to US as its very labour intensive.
Uniclo chairman even state that they would rather EXIT US MARKET if Trump ask them to move their factory to US.

Posted by nikicheong > 2017-04-01 21:05 | Report Abuse

To me I don't think you can read too much into their outlook statement. Management will always like to overperform, so they set modest expectations. Initially I will be alarmed when management say things like this, but often the next quarter or next full FY they do very well.

They just want to keep expectations in check. I mean read most of the outlook in quarterly reports for other companies...they are extremely conservative.

Posted by nikicheong > 2017-04-02 10:45 | Report Abuse

Trump has declared Malaysia as one of 12 countries he will build a case against in his latest executive order. US heavy export companies may see a pullback on Monday.

Posted by Jon Choivo > 2017-04-03 13:25 | Report Abuse

Trump say alot of things, but trade is something he's been scaling back abit over time.

If they say cannot do in countries like malaysia, for clothes, cost will double instantly. Just not feasible to pullback when it comes to fabrics.

Posted by Dolly_Chai2 > 2017-04-03 15:21 | Report Abuse

well said guys.. i think each of you have a point here... I personally do not think this kind of labor intensive business will be moved back to the US...

Posted by noah > 2017-04-03 16:47 | Report Abuse

One of the challenge is automation but it require a lot of capital investment and does not bring lots of job back to us.
And take note that even trump owned fashion brand manufacture in overseas

Posted by Dolly_Chai2 > 2017-04-04 10:21 | Report Abuse

yeah.. his lovely daughter Ivanka! haha

Posted by omnigunk > 2017-04-04 11:16 | Report Abuse

Engines start...

Posted by Jon Choivo > 2017-04-05 01:01 | Report Abuse

http://www.businessinsider.my/death-of-fashion-series-overview-2017-3/?utm_content=bufferfa5b1&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer-ti&r=US&IR=T#rPByOqYObIxcKIeY.97

Posted by goyangkaki > 2017-04-05 10:30 | Report Abuse

Prlexus wa chart is nice - golden cross

Posted by hng33 > 2017-04-06 11:01 | Report Abuse

sold off all prolexus at 1.44, lock paper profit, free up capital

Posted by goyangkaki > 2017-04-06 14:12 | Report Abuse

Wow the warrant almost touching 0.60 cent

Posted by Yipman > 2017-04-06 14:40 | Report Abuse

Wow.. Excellent growth of NIKE. QoQ and EPS keep on increasing.
Does this reflect PRLEXUS coming result?
I trust the data below will prove it to you.

NIKE, INC. REPORTS FISCAL 2017 THIRD QUARTER RESULTS
• Revenues up 5 percent to $8.4 billion; 7 percent growth on a currency-neutral basis*
• Diluted earnings per share up 24 percent to $0.68
• Inventories up 7 percent as of February 28, 2017

NIKE, INC. REPORTS FISCAL 2017 SECOND QUARTER RESULTS
• Revenues up 6 percent to $8.2 billion; 8 percent growth on a currency neutral basis*
• Diluted earnings per share up 11 percent to $0.50 compared to prior year
• Inventories up 9 percent as of November 30, 2016

http://investors.nike.com/investors/news-events-and-reports/?toggle=earnings

Posted by R40s > 2017-04-06 20:04 | Report Abuse

Good news, fund managers are accumulating, today EPF just announced they become a substantial shareholder after they have acquired 5.1%:

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5388849

Yesterday, Manulife announced they become a substantial shareholder after they have acquired 5.03%:

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5387857

Posted by R40s > 2017-04-06 21:14 | Report Abuse

Prolexus is a big big laggard in this ongoing Bursa Rally, despite very sound fundamentals with Single-digit PER, P/BV 1.05, average CAGR > 10%, 2 new factories ready by this year, etc., prices still remain at Rm1.40+/- in the last 4 months... Now is time for Prolexus to start it's run...

Posted by nikicheong > 2017-04-06 23:17 | Report Abuse

Depends. I think profits could decline leading to fall in share price in the short term. Good long term though. I missed the boat at 1.36, won't come in unless the stock reaches that low again.

Posted by dendron > 2017-04-07 07:15 | Report Abuse

that are some good news R40s... =)

Posted by Jon Choivo > 2017-04-07 10:27 | Report Abuse

Hmm since funds are in d. I think can relax and go sleep liao. Niki, what fall are you expecting? and why?

Posted by Yipman > 2017-04-07 14:21 | Report Abuse

Wow. 10% from fund manager. Agree with Jon Choivo, can sleep well now.
Get the popcorn ready and sit a side to watch the shows. :)

Posted by abangadik > 2017-04-07 15:15 | Report Abuse

Incoming to takeover 1.45...

Posted by Jon Choivo > 2017-04-07 16:02 | Report Abuse

Haha, my prlexus is now green! I bought at 1.48 and rounded down at 1.38 after result out. Hold hold hold.

You dont learn more from being right compared to being wrong. But it sure feels better.s Ahaha