Posted by R40s > 2017-09-18 20:45 | Report Abuse

Goodbye Amundi/EPF Shariah fund... No more heavy selling pressure from now on...

Later when Prolexus regain its Shariah Compliant status, Amundi/EPF may buy back millions of Prolexus shares, and then with their new factories start their production, the prospects is good...

Posted by Dericlock > 2017-09-18 20:51 | Report Abuse

Hi, when i go through the 3rd qr of prolexus and compare to other quarters, one of the big difference is caused by the "other operating income".
Try to go through few years back annual report yet didnt give really much description into it.

May i know what they actually are and how will it affect prolexus' core value?

Posted by Skliew > 2017-09-18 21:35 | Report Abuse

What can be classified as other income?
Definition. Term on an earnings report used to represent income from activities other than normal business operations, such as investment interest, foreign exchange gains, rent income, and profit from the sale of non-inventory assets.

Posted by paktua73 > 2017-09-19 09:34 |

Post removed.Why?

Posted by Dericlock > 2017-09-19 12:40 | Report Abuse

Haha, Skliew , i understand the other income definition is. But yet, i dont get is what other business prolexus is doing that have such a big drop in Q3.

It worth to look into to see if its core business is being affected or not

Posted by Skliew > 2017-09-19 16:48 | Report Abuse

Deric, if you look at the cash flow of all the 3 quarters, you can deduce that 1Q had unrealized forex gain of rm890K and 2Q loss of rm531K whereas for 3Q there was an unrealized forex loss of rm1.321M This made the differences...

Posted by Skliew > 2017-09-19 20:12 | Report Abuse

Also please read note 25, Profit Before Tax, of the annual reports, you will get an idea of the sources of "other income".

Posted by nikicheong > 2017-09-20 18:52 | Report Abuse

Does anyone here have any opinion on the impact of FX movements on Prlexus' bottomline? How much of their strong performance in FY15-FY16 can be attributed to the favourable FX rates?

Posted by Dericlock > 2017-09-20 21:38 | Report Abuse

Niki, the profit it makes about 20% come from fx movement last few years. So because of tyr strengthen this year which start causing impact start from previous reported quaryer.
Hence removes all these fx factors, the profit and growth it has is not as attractive as it show in previous years

Posted by Dericlock > 2017-09-20 21:39 | Report Abuse

Anyway, i am still pretty fresh in evaluating report so my opinion might worth nothing. Just my own view though

Posted by GooGooDolls > 2017-09-21 10:26 | Report Abuse

what? still got ppl trap in it? good stock won't be like this lar

Posted by Skliew > 2017-09-21 11:10 | Report Abuse

.........'000

FY...Revenue..G. Profit..Other Income...Gain(loss)forex/Dvt
13..235,545...39,577....2,504...................824
14..294,113...51,374....2,390...................1,216
15..350,340...60,126....6,539...................5,778
16..402,737...81,243....4,977...................747
FY16, 737 other income could be traced from note 25 of AR16; balance of 3,493, I am unable to trace...someone may help to enlighten..

Other Incomes actually not that significant as compared to the Gross Profits. FY15, forex gain was significant for the FY period of 1.8.14-31.7.15, as RM depreciated towards end of 2014.

As RM depreciated to current level of 1USD: more than RM4, Malaysia, in disguise, becomes more competitive....

Be forward looking rather than backward looking in the evaluation of the value of Prolexus..

Good luck !

Posted by Skliew > 2017-09-21 11:19 | Report Abuse

Note that upon completion of the Fabric Mill, gross margin could improve by 5% ultimately.... that would be very significant and would add to the intrinsic value, much more significant than the forex gain experienced in FY15....

Posted by nikicheong > 2017-09-23 20:36 | Report Abuse

Result will be out sometime next week. I will be cut off from the Internet (going for a one week off the grid trip).

Good luck to everyone. It's probably going to be lower profits by about 20%, but I believe everything's been priced in. If things drop below RM1.07, then I will top up on the following Monday (after re-assessing the company's prospects, of course).

I believe it will re-rate upwards however, as long as the cash position drops below 33% of total assets. For this to happen, the cash must be transferred to PPE, either to the Johor mill or the Vietnam plant. Once this happens, the company will gain Shariah status and the Shariah funds will re-purchase the stock to average down.

Either way, this is the stock market. Crazy things happen. It's up to us discerning investors to take advantage of Mr Market's mood swings.

Posted by GooGooDolls > 2017-09-25 09:35 | Report Abuse

sleep long time lar

Posted by AKUMAUKAYA > 2017-09-29 12:21 | Report Abuse

QR out hali ni...???

Posted by sumflow > 2017-09-29 18:13 | Report Abuse

QR out result not good! Down again next week!

Posted by nikicheong > 2017-09-29 18:26 | Report Abuse

QR is ok. Negatives should be priced in. But who knows, may drop to rm1. Problem is cash to total assets still don't meet shariah requirements. Gone case lah like this. Hold your horses guys. These will be some bearish months ahead.

Posted by apolloang > 2017-09-29 18:30 | Report Abuse

waiting for 3 months already to see the report and,another profit fall again, soon 1.00 if continue like that

Posted by apolloang > 2017-09-29 18:31 | Report Abuse

Monday open 1.10 or below,then slowly drop bit by bit towards 1.00 if fundamentals no change in another 3 months

Posted by Stock Kingdom > 2017-09-29 19:54 | Report Abuse

Result is not ok actually, market will tell the truth on Monday

Posted by Stock Kingdom > 2017-09-29 19:56 | Report Abuse

Revenue fluctuated quarter to quarter, very hard to predict the next quarter's figures, full of uncertainties

Posted by apolloang > 2017-09-29 20:53 | Report Abuse

looking at the results is 99% opening down,is either down much or less.it won't down 20cts maybe a few cents cos the volume also slowed down already in recent days

Posted by nikicheong > 2017-09-30 00:06 | Report Abuse

Come on guys, are you capable of doing any reading? There was a one-off expense of RM4.1mil billed in this quarter. You can see that's why admin expenses much higher.

Look at the ROE, very solid. NAPS also solid. Borrowings pared down even further. Fundamentals are sound.

Posted by apolloang > 2017-09-30 00:09 | Report Abuse

even so,the growth is not much

Posted by Gn021 > 2017-09-30 00:54 | Report Abuse

It also incurred a one-off loss on the deconsolidation of subsidiaries of RM4.18 million during the quarter, its Bursa Malaysia filing today showed, which was offset by higher operating income and lower selling and distribution expenses

Posted by nikicheong > 2017-09-30 01:06 | Report Abuse

Well, each to their own. To me, the Q result is not bad, not that great either. More worrying is the fact that it will miss out on Shariah list re-inclusion by a very small margin! The current cash:assets ratio is at 33.8%, just very slightly above the requisite 33.33%.

Thing with Prolexus is, there are definite growth catalysts with the fabric mill and the Vietnam plant. Topline growth + margin expansion from both the new plants. I'm happy to pay ~0.9X BV for almost assured double digit long-term ROE.

Posted by Frank Soweto > 2017-09-30 01:26 | Report Abuse

haiyo looks like mon will laosai again :( Hope the sai won't be too much :(

Posted by apolloang > 2017-09-30 01:49 | Report Abuse

Apollo research price range 0.98-1.15 for the next 3 months

Posted by tealeaf > 2017-09-30 07:01 | Report Abuse

din expect this Qr will be good as expected ... but at least not too bad still.....

Posted by daytona > 2017-09-30 08:56 | Report Abuse

Whether they are Shariah compliant or not, will depend on whether they place any of their cash under any Islamic funds. If yes, then that Islamic cash portion will be excluded from the cash over total asset ratio calculation. I believe they should know what to do gua....

Posted by nikicheong > 2017-09-30 09:09 | Report Abuse

@daytona, that's correct! If they place just a mere 2 million in Islamic institution...then we are green to go! Thank you so much. I feel much better now!

Posted by value88 > 2017-09-30 09:15 | Report Abuse

This quarter's earning is good actually.

Posted by value88 > 2017-09-30 09:18 | Report Abuse

The EPS has improved a lot QoQ.
In term of YoY, the reported EPS was lower, but the core EPS (after excluding the RM4.17mil loss on consolidation of subsidiaries + other one-off loss), is actually slightly higher YoY.
Thus, the earning is considered good and I wonder why some i3 people react negatively to this quarter's earning (??). Maybe, they do not read the quarterly report in detail..

Posted by value88 > 2017-09-30 09:20 | Report Abuse

Its stock price has been beaten down after previous quarter's poor result because people worried about fundamental change in Prolexus' business. This quarter's earning should prove otherwise.

Posted by value88 > 2017-09-30 09:22 | Report Abuse

The not-so-good news is the new Vietnam garment plant is delayed due to re-application of construction permit.
The good news is the management claimed they plan to fast track the fabric mill.

Posted by value88 > 2017-09-30 09:27 | Report Abuse

The capex is as high as RM22mil in Apr-July'17 quarter.

Posted by value88 > 2017-09-30 09:28 | Report Abuse

I am not sure how market will react on next Mon on its stock price, but I do see earning improvement in this quarter and am expecting the contribution of its new plants in quarters to come.

Posted by nikicheong > 2017-09-30 10:07 | Report Abuse

The Vietnam plant delay had already been in the news.

http://www.thesundaily.my/news/2017/08/28/prolexus-plan-build-vietnam-plant-delayed

Since there wasn't much negative reaction then, I don' believe there will be negative reaction now. But according to my research the fabric mill is on target to become operational in Q2 FY18, i.e. by end of Jan 2018. You can see they started the hiring process 2 months ago. The capex spend is mostly for this. Email exchange with the CFO also confirmed that the fabric mill is on schedule while the Vietnam plant was delayed to next year.

EBITDA as a whole for FY17 is higher than FY16.

I think the price reflects much of the worst, on the better times ahead!

As ever, you can't predict the market...but if that manic-depressive Mr Market offers you some damn good bargains you best be taking them!

Posted by nikicheong > 2017-09-30 11:11 | Report Abuse

"Besides, there is one-off loss on deconsolidation of subsidiaries of RM 4,176,000."

Actually, can somebody please explain what the above "deconsolidation" could actually mean, and why on earth does it incur an administration expense of RM4.176mil?

To add, PPE of RM0.9mil was also written-off. So you can say that there was one-off expenses amounting to RM5mil during Q4 FY17....discounting this, the core profit is much better actually despite the reduction in topline. This probably means that operational efficiency (particularly in the new China plant) has improved.

Posted by SuperLaber > 2017-09-30 11:19 | Report Abuse

earnings back on track, just that the revenue quite volatile, else i think quite good QR being released, hopefully mgmt will be able to get back the Shariah compliance in November 17

Posted by nikicheong > 2017-09-30 11:53 | Report Abuse

Another positive is that gross profit margins increased from 21.8% to 25.8%. Pretty substantial rise I'd say!

Posted by apolloang > 2017-09-30 15:20 | Report Abuse

mon opening sure drop. it's either drop more or less. a drop is a drop and cannot be deny

Posted by value88 > 2017-09-30 15:21 | Report Abuse

Yeah, the revenue YoY decreased but core earning YoY can improve slightly, mainly due to higher gross profit margin and higher PBT margin.
If you check and compare the profit margin in past 2 years, u would find that this quarter's margin is the highest.

Posted by value88 > 2017-09-30 15:23 | Report Abuse

@Nikicheong, the deconsolidation of subsidiaries are explained as below :

"When a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value. The gain or loss on the deconsolidation of the subsidiary is measured using the fair value of any noncontrolling equity investment rather than the carrying amount of that retained investment."

It is an one-off item.

Posted by value88 > 2017-09-30 15:28 | Report Abuse

The management also claimed in quarterly report that the Group performance for the forthcoming year is expected to be "stable".
The earning should back on track until improvement is seen when the new plants start their contribution.
Logically, Prolexus' stock price should also come back to RM1.40 to RM1.50 range which is the price range before the previous quarter's poor performance. But, market is not rational most of the time, so its stock price can go anywhere.

Posted by apolloang > 2017-09-30 15:31 | Report Abuse

if prolexus can up to 1.40 means next quarter results must jump 50% at least,and I don't think so. so it will still in the slump unless it will only achieve that

Posted by nikicheong > 2017-09-30 18:13 | Report Abuse

Well, let's wait for Monday to see how the institutions perceive it. Kuci kuci sellers selling out at the open means nothing. Wait for the big buy/sell orders to see whether the downtrend continues, or we can recover to RM1.25-RM1.40 range.

I won't buy/sell anymore over here for now. Hold my horses unless a truly incredible bargain opportunity presents itself. Hold for the long-term in either case (3-5 years).

@appolloang, I don't think that's how the stock market works. Prolexus got beaten down from RM1.65 to RM1.15 in fairly short order, as long as some confidence is back, and given the closer timeframe to expansion in production capacity/vertical integration, I won't rule out recovery in the share price from here on out. The fundamentals, if you care to look at the balance sheet and cash flows statement, is as good as it has ever been!

Posted by minuteCEo > 2017-09-30 19:40 | Report Abuse

The construction permit of the garment factory has been obtained. It is just the matter of time, not the worst case such as they are not allowed to build the factory there. However, do take note that management did mentioned about the softening of retail environment in US.

By observing the latest QR, it seems that management listened to the inputs from investors to improve the quality of their QR. This is a good sign.

One question, the amount of "authorised and contracted for" has been reduced from 87.9mil to 57.2mil. Does it mean the reduction portion has already been included into PPE in balance sheet when the targeted property/equipment/equipment has been bought or built?

Posted by nikicheong > 2017-09-30 20:39 | Report Abuse

@minute, yes the reduction in the "authorised and contracted for" should be reflected in an increase in PPE on the balance sheet.

Do take note that the utilization of rights issue proceeds breakdown does not fully reflect the cost of building the fabric mill, as a substantial portion of the fabric mill was to be made using internally generated funds (per the abridged prospectus).