Posted by Dolly_Chai2 > 2017-07-18 10:07 | Report Abuse

nikicheong, i saw some of your previous comments on how to bottom fish and predict the lowest entry price...
frankly speaking, that is really ridiculous... u kept revising/lowering your target entry price before you buy... why did you keep changing that target price and how did you derive at those prices?

No one can ever predict the lowest price or the highest price.. we don't have a crystal ball in front of us? you sounded like an expert in predicting how low it can go... and it could end up you miss the chance to buy any.

a value investor should evaluate the intrinsic value and margin of safety...(if you did, why are you lowering you entry price every time when it went down more?). and as long as it is undervalued, we can keep buying as long as we have sufficient funds... bcoz like i said, we will never know what is the bottom price...

therefore, my advice to you is.. do not try to act smart by timing the best/lowest price.. u will never get to do that (if yes, that is just by luck)...

Posted by apolloang > 2017-07-18 10:18 | Report Abuse

will not up until profit improve,simple as that

Posted by nikicheong > 2017-07-18 10:21 | Report Abuse

Well Dolly_Chai, what better way to achieve better margin of safety than to BE PATIENT? As long as there are no immediate re-rating catalysts, what's the hurry? Besides, this is not the only stock on my watchlist. I believe I will buy it, someday. Just not yet. I figured this time round it would be better for me to buy MMHE.

To me, being patient pays off. Monitor 10 stocks. Buy the one with immediate catalyst. Wait for the others to go much lower. So far it's a good strategy for me. Look at my comments on MMHE forum on this website from 2 months ago to see how I was patient and waited, and bought at my target price.

You think it's luck, I don't think it's luck. The opportunities that pass...I let them go. But the opportunities that do present themselves...those are the fat pitches. You need to understand the relationship between risk, probabilities and statistics to see what I am doing.

Posted by Ymchan > 2017-07-18 10:22 | Report Abuse

@Dolly_Chai2, agreed with your point of view. We can't predict the lowest or highest price.

Posted by nikicheong > 2017-07-18 10:26 | Report Abuse

@DollyChai, see my comments on this website on other counters.

In May, the final choice was between Hevea and Prolexus. Based on my risk analysis, I chose Hevea.

In June, the final choice was between Tan Chong and Prolexus. Again, I did a risk analysis and chose Tan Chong.

In July, the final choice was between MMHE and Prolexus. I was very tempted to get Prolexus this time, as it had met my buy-in price, but on the whole I saw MMHE as a fatter pitch.

So now I relegate Prolexus to August. I will monitor and top-up Tan Chong/MMHE if needed, but likely Prolexus will be a buy if it remains at the current price levels. Another company I am studying at the moment which might prove to be the better buy depending on circumstances is Asia File.

I hope you understand my logic. Prolexus does not exist in a vacuum. My final investment decisions are always made when comparing two good prospective options.

Posted by Dolly_Chai2 > 2017-07-18 10:34 | Report Abuse

In general, if you really adopt value investing:

1) yes, we need patience. But that is the patience to wait for good company to trade at discounted/undervalued price (with margin of safety, the more, the better). In this scenario, it is not referring to "patience" of keep lowering the entry price even though it already trades below its intrinsic value with plenty room of safety margin. Good shares/blue chips normally trade at a premium. That is why we do not buy them at such expensive price. The patience here means wait for them to trade below its intrinsic value.

2) there are more than 1000 shares in Bursa alone, not counting other exchanges all over the world. We do not have enough time to look into each of these shares (maybe you can? wow)... once we found a fundamentally sound and solid share, we will evaluate its margin of safety... if it is undervalued, we can buy. We have to do certain level of risk management. Maybe u r a high risk taker, u can "sailang" in one share... I can't.. many value investors can't too.. we have a number of value shares instead of putting all in one single share... from what u said.. i assume u will look at 10 fundamentally good shares... end up only buying 1 share (or 0 share) with all your funds..
that is super risky even for good share.. if 5 of these 10 shares trade below their intrinsic value, we should buy them (or 3 to 4 of these 5) instead of buying all in one share..

just my little advice... up to you .. you own your own investment... thanks...

Posted by CKCS > 2017-07-18 13:53 | Report Abuse

Double expansion means earnings won't be attractive loh. That is why investors sold it out...u can call it betrayal but what is the point of getting your money tied and stuck in a company with such long payback period after double expansion?

Posted by Jon Choivo > 2017-07-18 14:01 | Report Abuse

nikicheong,

Is it possible to predict the absolute lowest price with some accuracy to bottom fish?

Yes actually, however, it is stupidly difficult since it requires you to read volume, distribution etc, and to back test against bursa to test efficacy of your theory. Which is why, i think this is the domain of quants, or algorithmic trading. And the thing is, the more quant firms and AI's they are, the harder it is and the smaller the gain, since the previous patterns would have people bottom fishing too.

I follow like this. I do my analysis to determine is i would like to buy at that price, and i buy or don't buy. That's it. Though if im honest, sometimes i try to time it, but its like 50/50 honestly.

There are certain reliable and easy to recognize patterns which i use. but am not going to say since if more people use, the edge reduces. But its very hard for algo trading to work in msia since we dont have options and shorting ability.

dollychai2,

I actually read through the annual reports of every company in bursa =P. Doing comparative analysis now. Bursa is actually really small with less than 900 companies. The S&P plus DOW is more than 10k companies. You cant even keep track of quarterlies unlike here in msia.

i finished them in 2 months. A lot of companies is really easy to skip since you just look also you know wont hit your criteria. So in the end, you only really do analysis on like 100 companies and in there got like 40-50 that is considered cheap. and like 10-20 that is really cheap.

Posted by Jon Choivo > 2017-07-18 14:09 | Report Abuse

Niki,

So yeah, i buy at the price i consider fair cause i dont have the brain power or time to really predict the bottom. and the time spent timing the market is better spent doing research.

I've also looked at asiafile once. Great BS, good div etc. But NTA wise its not undervalued, since most of the asset in PPE and Investment in associate. Which i just discount to zero, since in the event of liquidation its really not worth much.

OPCF to MV is it about 8-9 times. Which is really high since this is a business that is not growing (or even going down since people these days just upload docs into system) and really susceptible to attacks by lower pricing in say china. Plus PRLEXUS trades at 5 times, PetronM also 5 times,, thong guan 5 times, Except these are all in growing industries, and petronm is really cheap actually.

the only reason the price stay there is cause of dividend. In which case, if that is important, id just buy liihen, trading at 6-7 times opcf.

Posted by Jon Choivo > 2017-07-18 14:17 | Report Abuse

I sold my warrants in prlexus on the first day, and bought more mother at 1.3.

In hindshight, i should have just sold everything and buy at 1.3, But i also remember ekovest, where i tried to time market, i bought at 2, sold at 2.2, wanted to wait for it to go below 2.2 to buy again. In the end it never went down, and i never bought, because in my mind, i kept thinking i could have gotten it cheaper, making me fail to value it as and then.

Also if your looking, fimacor is at 5 times and have moat since it makes security documents. Aeoncr is also a fantastic company, trading at 3 times operating cashflow, people fail to value it properly since most of its earnings go back in to make more money. If they gave it out in div, price would double.

Posted by CKCS > 2017-07-18 14:36 | Report Abuse

Salesman getting nervous because share price getting lower and lower.....it collapsed because fundamentals tell everyone that the DOUBLE EXPANSION is sucking a lot of money from company & shareholders mah. Later not enough money for operations, sure it asks for more money or fund raising exercises. That is why investors THROW or DUMP the shares loh

Posted by CKCS > 2017-07-18 14:37 | Report Abuse

Both also profit halved

Evergreen qtr profit -48.89% y-o-y
Prlexus qtr profit -46.06% y-o-y

Posted by Jon Choivo > 2017-07-18 18:27 | Report Abuse

lol ckcs got banned.

Posted by Skliew > 2017-07-21 16:55 | Report Abuse

http://www.mds-intl.com/en-global/Page/company

Men Chuen Fibre Industry co ltd
Prolexus' partner in the dual expansions via Subsidiary Trans Pacific Textiles

Posted by nikicheong > 2017-07-21 23:06 | Report Abuse

Damn, the directors exercise 3 mil ESOS. Dilution even more.

Posted by Skliew > 2017-07-24 09:19 | Report Abuse

https://my.jora.com/Trans-Pacific-Textile-(M)-Sdn-Bhd-jobs#email_alert_modal

Looking for talents!

Posted by Yoon Yeap Lower > 2017-07-24 12:49 | Report Abuse

Just one question, do u all think prolexus has this warren buffet called 'moat' that they can outperform industry players in long run?

Posted by Dolly_Chai2 > 2017-07-24 15:43 | Report Abuse

Yoon Yeap Lower, the answer is yes and no...

Like i mentioned before, it is not as easy as a new hawker getting into a pasar malam to start selling. Nike, Under Armour, Asics, etc big shots are very stringent and particular in auditing their suppliers. You have to meet a certain criteria in order to be qualified as one of their approved vendors. One of the quality criteria is the "defect/reject rate"... so far Prlexus has outperformed and has much lower "defect rate" than what is being required.

However, it is not to say for 100% that they cannot be replaced. To be fair, there is such a possibility too but in common sense, if Prlexus can offer reasonable pricing and meet quality & delivery leadtime to Nike, UA & Asics, etc, there is no reason for them to change suddenly. Unless there is a prominent new supplier who can quote at a much lower price (that is significant enough to Nike, UA, Asics). Let's examine if this is possible? If you look at the profit margin of this apparel industry (I am talking about contract manufacturing that Prlexus and Magni do, not the business that Nike, UA, etc is doing), it is not really fat.
Magni has more profit because their revenue is also 2-3 times higher (I believe their profit margin should be similar, correct me if I am wrong)...

So it is unlikely to see a new player who can quote much lower and still make a profit.
If there is, Nike, etc would have already engaged with them much earlier...

just my 2 cents.. I hope it helps...

Posted by Yoon Yeap Lower > 2017-07-24 20:53 | Report Abuse

Dolly, thanks, it definitely helps, i have been reading this company's financial for quite some time, so far the financial is impressive, but i just want to think for a quality or biz perspective, since magni and prolexus does not enjoy goodwill like Nike does. What made me want to study more is EPF, they started to collect even the last quarter is terrible, I guess their time horizon for investment is long. One more question, does drop of earnings in last quarter really bother you all very much?

Posted by Jon Choivo > 2017-07-25 10:08 | Report Abuse

In terms of moat, not really, very few companies in Bursa have moat. Companies with definite moat and hard to die.

1) PBA
2) TENAGA
3) AJINOMOTO
4) TIMECOM
5) NESTLE

Etc etc. other than PBA, the rest are really not cheap.

Posted by paktua73 > 2017-07-25 11:19 | Report Abuse

old man paper lost here 34k but old man still have fate here
lock for long time
old man cry here waaaaaaaaaaaaaaaaaa

Posted by Skliew > 2017-07-25 12:21 | Report Abuse

Nike FY17 apparel revenue USD9.654B. Nike sourced from 430 apparel factories in 41 countries. The market is also big enough for the producers. There are 2 types of apparel with different materials, knitted fabric or woven fabric. Prolexus produces knitted fabric whereas Magni the woven fabric. Nike is reducing inventory recently and this may have affected the sales of some suppliers perhaps those producers of the knitted fabric like Prolexus.

I expect the drop in earning in the last QR is only temporary as Nike cannot keep reducing inventory and at the same time aiming to increase the revenue from FY17 USD34B to USD50B by 2020. However, I expect the coming Prolexus QR to be not so good YOY as Nike may not have reduced the inventory to their target yet but I also expect the QR to be not bad as the 4Q used to be the strongest Q.

Once the new factories are up and audited by the OEM customers, the co could expect to receive new orders.

The fabric factory in Kluang could enhance PAT by 5% as reported in the rights issue circular to shareholders last year. The Vietnam factory could more than double the present capacity once fully run.

This is a long term stock and not suitable for those short term traders looking for quick gains and those who has no patience and confidence in the company.

In every investment, there is risk.

Just my views and
remember,

Buying/Selling at your own risks.

Posted by Yoon Yeap Lower > 2017-07-25 13:33 | Report Abuse

Skliew, bro where u got the info regarding the products magni and prolexus produce? Would like to read through the info as well

Posted by Skliew > 2017-07-25 13:38 | Report Abuse

You can read their annual reports .. it is mentioned somewhere therein...
And Prolexus is setting up a knitted fabric manufacturing factory....the material they use for their apparel manufacturing..

Posted by Skliew > 2017-07-25 13:56 | Report Abuse

http://www.magni-tech.com.my/?mod=pages&function=show_page&page_id=67

Check under the BUSINESS section .... Magni... sophicated.... woven sport wear....

Posted by Skliew > 2017-07-25 14:19 | Report Abuse

PDF]
2016 Annual Report - Prolexus Berhad
www.prolexus.com.my › pdf_folder › Pr...
Oct 31, 2016 - Shareholders who wish to receive the printed Annual Report and who require ..... Rights Issue will be used for setting up the apparel factory .... limited company specialising in knitted fabric.

This is the headline obtained by googling....

Posted by Yoon Yeap Lower > 2017-07-25 23:33 | Report Abuse

skliew, thanks alot bro

Posted by newbiecc > 2017-07-26 10:07 | Report Abuse

http://classifieds.sinchew.com.my/20170723/viewImage.html?contentName=3640042&thePubdate=20170723&thePubcode=%u661F%u6D32%u65E5%u5831%20SIN%20CHEW&theEdition=%u5927%u67D4%u4F5B&theClass=SITUATION_VACANT%u5F81%u8058&theSubclass=%u5F81%u8058

Posted by Skliew > 2017-07-26 12:38 | Report Abuse

According to the above advertisement, the knitted fabric factory annual production capacity is 200 million yards. How much is this in term of value, RM? How many millions pieces of apparel can it be made into?

Anyone knows?

Posted by Dolly_Chai2 > 2017-07-28 11:10 | Report Abuse

hat-tip to SKliew on the good insight.. that is what a real fundamental investor is doing - a lot of research and homework... and know what you are doing and be confident in what you are investing...
temporary/short-term negative movements is not something value investor should be worried at..

just to add one more note to it..

as you can see, the advertisement date is July 23rd... just imagine, if the management is anticipating the sales to be dampened for long term, will they even proceed (as planned) to expand?
We have seen some companies who put the expansion plan on-hold due to foreseen slowdown..

having said so, we can kind of anticipate that their sales are still on uptrend in long term.. that is why they moving forward as planned...

just my 2 cents...

Posted by Dolly_Chai2 > 2017-07-28 11:12 | Report Abuse

if u would like to understand more on the differences betweens knits and wovens:

http://www.threadsmagazine.com/item/5152/knits-wovens-whats-the-difference

Posted by shareinvestor88 > 2017-07-30 16:50 | Report Abuse

Sell target 50c

Posted by Skliew > 2017-07-31 22:12 | Report Abuse

For FY15, the co consumed 15.5million meters of fabrics and the revenues mainly from apparel manufacturing was about rm350 millions.

The planned Kluang fabric factory initially would only produce 14 million meters for own consumption. However, as per the above job advertisement, the planned installed capacity is 200 million meters. Apparently, the management has revised the plan and go ahead on full swing building full capacity instead of in stages. The Capex for the 2 factories has increased to approx. rm130millions as read from the 3QFY17 report, instead of rm77 millions as advised in the rights issue circular to the shareholders. This shows the confidence of the management on the planned dual expansions.

Upon full running of the Fabric factory producing 200 million meters fabric, the revenue from the Fabric Factory alone could easily exceed rm1 billion as the sales value per meter easily more than Usd1as googled.

With vertical integration or going upstream producing knitted fabrics, the company would become very efficient and competitive, eventually enhancing net profit margin by more than 5% as reported in the rights issue circular to the shareholders last year. This is an important competitive edge as not many garment manufacturers have own fabric manufacturing factories or are vertically integrated.

My 2 Sen of views and findings.

Buy/Sell at your own risks.

Posted by Skliew > 2017-08-01 08:57 | Report Abuse

Ramatex, listed in Bursa, which manufactured fabrics in the upstream and apparel in the downstream, was doing so well that the major shareholders took it private @rm2.20 in 2007. Could Prolexus be as successful ?

Posted by Skliew > 2017-08-01 09:31 | Report Abuse

Fabrics manufacturing is capital intensive whereas apparel manufacturing is labour intensive. Fabrics manufacturing needs a lot of electricity and water. In those developing countries where reliable supplies and competitive costs of electricity and water are not available, it would not be competitive to set up fabrics manufacturing plant thereon.

With weakened ringgit, is Malaysia competitive in Fabrics Manufacturing?

Posted by Skliew > 2017-08-01 11:32 | Report Abuse

Syariah Compliant

Prolexus lost its Syariah Compliant Status in May 17. The most probable reason was its Cash holding exceeded 33% of its assets and the cash was placed in USD deposits, as read from AR16. Come Nov 17 for review, it is highly likely that it will regain its Syariah status as the cash may have been disbursed for the dual factories expansion if not relocated to Syariah Compliant financial institutes. Just my guess, lol..

Posted by Dolly_Chai2 > 2017-08-01 11:35 | Report Abuse

Thanks Skliew for the additional useful info.

Posted by CKCS > 2017-08-01 15:36 | Report Abuse

Told u this sochai cum coward Dolly who has no balls will always buy in troubled companies. Or should we say he's always stuck and comes out to defend? What are the similarities of Evergreen and Prlexus? Both also profit cut half down

Posted by CKCS > 2017-08-01 15:37 | Report Abuse

Prlexus in trouble because its massive capex will have very long gestation period. That is why investors shunned its shares

Posted by Skliew > 2017-08-01 23:18 | Report Abuse

https://klse.i3investor.com/m/blog/konginvestment/66644.jsp

Billion Dollar Company by 2020.

Posted by CKCS > 2017-08-02 07:01 | Report Abuse

Now m.cap 229 mil and u dreaming a billion? Wake up loh. When a share price collapsed like this and by the time the gestation period finishes u are most likely doomed especially Nike give the contracts to other makers lah

Posted by Skliew > 2017-08-02 08:24 | Report Abuse

" Managing Director, Lau Mong Ying......
放眼在2020年晋身Billion Dollar Company....."

Posted by Dolly_Chai2 > 2017-08-02 09:49 | Report Abuse

some clown is back in action, after being banned for abusive and manipulated words used to mislead investors... i would suggest i3 admin to permanently ban him and track down his MAC / IP addresses etc so that he cannot create new ID to spam the forums..

Posted by CKCS > 2017-08-02 15:59 | Report Abuse

This Dolly_Chai2 himself got banned by i3 admin before. Need more introduction of your stupid acts? Prlexus and Evergreen are losing counters. Still not clear? Something went terribly wrong........

Posted by RainT > 2017-08-02 22:44 | Report Abuse

Please please ...comment something that is good and helpful

Don't waste this forum space by shooting each other and write bull shittttt....

Not useful at all, we want good opinion and sharing for all!

Posted by Jon Choivo > 2017-08-02 22:46 | Report Abuse

Just dont respond. Just bought some warrants.

Posted by CKCS > 2017-08-03 13:59 | Report Abuse

Share price dropped like this and stay like that....must be something terribly wrong!

Posted by nikicheong > 2017-08-03 22:44 | Report Abuse

Guys, the Vietnam plant was due to be operational in Q1 FY 2018 right? So it should be between now and October? Any idea how far along are they in constructing the plant? What about the Johor fabric mill? Anyone did a site visit to see if progress is coming along for a Q2 FY2018 (Nov 17 - Jan 18) startup?

Posted by nikicheong > 2017-08-03 22:47 | Report Abuse

Also, does anyone know how many more ESOS are outstanding? I feel like there is so much dilution going on with the ESOS being exercised. Will it come to an end soon or still many unexercised ESOS outstanding?

Posted by AKUMAUKAYA > 2017-08-04 16:50 | Report Abuse

The Cavalier King Charles Spaniel is a small spaniel classed as a toy dog by The Kennel Club and the American Kennel Club. It originated in the United Kingdom and is one of the more popular breeds in many countries...... CKCS is a dog....OMG!!!
Ref:https://en.wikipedia.org/wiki/Cavalier_King_Charles_Spaniel