Posted by GLNT > 2019-03-06 18:44 | Report Abuse

Company share buybacks start again

Posted by sense maker > 2019-03-12 12:22 | Report Abuse

Privatisation of some civil service will affect this company.

Posted by Heavenly PUNTER > 2019-03-12 12:24 | Report Abuse

me no troll me hold big big position in RCECap coz i like to make money off the unfortunate or illiterate

Posted by chshzhd > 2019-03-12 15:11 | Report Abuse

just keeep..:)

Posted by GLNT > 2019-03-13 15:28 | Report Abuse

Yawnnn....Can someone wake up?

Posted by (70B-SAPNRG-3Yrs) Philip > 2019-03-13 17:38 | Report Abuse

The office slave just bought RCECAP at 400,000 shares at a price of RM1.37. Immediately sell it for 30 cents profit. Wow! I wonder who is going to pay for that 30 cents, if not the shareholders of RCECAP.

Posted by darkangell > 2019-03-13 22:18 | Report Abuse

Really slow & steady this stock

Posted by antoniomc27 > 2019-03-13 23:33 | Report Abuse

haha Philip! What a feud you have with Choivo...

My opinion:
ESOS programme is commonplace among companies worldwide... if executed properly need not to be overly negative for shareholders. With the right clauses in place (e.g sufficient minimum holding period) it will stimulate workforce productivity without causing significant dilution.

Rgds

Posted by (70B-SAPNRG-3Yrs) Philip > 2019-03-14 09:13 | Report Abuse

Berkshire Hathaway does not have ESOS because the owners and shareholders are aligned. QL does not have ESOS because the shareholders and owners are aligned. Nestle Malaysia does not have ESOS because the shareholders and owners are aligned. PCHEM also does not have ESOS because the shareholders are aligned.

I am sure ESOS can make a difference in motivation of workers productivity (not always, as only those at the top regularly take advantage), but the dilution of shares at a cheaper cost is a COST of doing business, that I calculate when I value a company.

Those who don't look at it in that way needs to reevaluate what they call wonderful stocks.

Posted by Choivo Capital > 2019-03-14 09:39 | Report Abuse

Yes, the difference is this.

Most co's that give ESOS is not held by a private owner with his own interest in mind, but hijacked by career executives due to there not being one single strong owner with 50% of the stock.

I would rather they give ESOS, that takes into account natural compounding effects of retaining the majority of earnings, or related to ROIC. And to not give ESOS at all.

Since often share prices do not tie to your job performance.

But they are good arguments for. Looking at the performance of the management, I'm ok with the ESOS which is reasonable.

Unless of course, you feel that Tan Sri Hisham, the 67% shareholder, has gone insane and loves destroying his own wealth, by giving out shares willy nilly to outsiders, and that the performance of the company for the last 3 years is pure luck, and the management were just lottery winners that contributed no value beyond their base salaries.

Posted by (70B-SAPNRG-3Yrs) Philip > 2019-03-14 09:56 | Report Abuse

Giving extra ESOS to his children no less who is the head of RCECAP. Why not? Slowly take away and dilute all of minor shareholder value, and giving it to his kids, which are not exactly the best managers in town ( look at the management services division, pathetic.) Contrast their management performance to AEON credit, which as you say basically do the same thing. Which has grown better MINORITY SHAREHOLDER value in terms of share price and growing dividends? Which has increased the business value over the years. And still you want to award ESOS for average management. I wonder how much ESOS did they award the workforce of aeon credit?

That answers your question right there.

And that is also why major funds ( only around 14 million shares, really wise) are avoiding investing in this penny stock.

I would not want to invest my future epf money here.

Average company. How long do we have to wait until the business gets to all time high in revenue, profits and share price? The last time share price was above rm2 was in 2007.

Limited prospects, terminal value, limited growth.

I pass.

Posted by Choivo Capital > 2019-03-14 16:37 | Report Abuse

Phillip.

Non executive directors are not entitled to ESOS. The son is the chairman and non executive director.

The vast majority of the shares are given to upper and middle management. I suggest you read the reports a few more times before commenting, or stick to companies you're familiar with.

Talking about ESOS to family members, have you seen's TopGlove's? What do you think of it? Or Yinson's?

Well, i do prefer AEONCREDIT's business and owns some shares. But the valuations are vastly different.

I think that a good enough business, if paid too high a price, turns into a bad investment. A mediocre business at a low enough price, is a good investment.

People just tend to underestimate how low the price needs to be and the fact they are not liquidators.

This is a pretty good business at a great price. Looking at your biggest holding, you clearly feel somewhat differently about that.

Posted by chshzhd > 2019-03-14 17:37 | Report Abuse

price 1.64 pe 6 roe 16% profit margin 36% dy 4.8%

Posted by Heavenly PUNTER > 2019-03-14 18:58 | Report Abuse

sold off all, hate company that give ESOS the most.

Posted by LaoTzeAhSir > 2019-03-15 00:21 | Report Abuse

punter indeed.. change tune so quick. noob

Posted by (70B-SAPNRG-3Yrs) Philip > 2019-03-15 06:17 | Report Abuse

price 1.64 pe 6 roe 16% profit margin 36% dy 4.8%
14/03/2019 17:37.

Why is its pe6 low? It's because intelligent investors know that terminal value has been hit and the business will struggle to grow bigger in the future. It has yet to hit all time high in any department.

If you know a company can't grow, why pay more?

My biggest holding (capital employed wise) is STNE. If you are taking about QL, I did buy in December 50k shares@6.25. I haven't sold a single share yet. Compounded growth and all that.

Your idea of mediocre business is a good investment at a low enough price is an outdated inneficient cigar butt 1930's concept that had already been given up by Warren Buffett a long long time ago,. He promotes buying wonderful companies at fair prices. RCECAP is far from a wonderful company.

This has already been proven by comparing minority shareholder performance if you bought time 5 years ago, RCECAP 5 years ago and aeon credit 5 years ago.

Your concept is flawed because you assume to know the future by deciding that share price is a determinant of the quality of a business in the long term.

That is a wrong way to invest money in the long run. Trust me, I bought one stock for 10 years and have monitored all other stocks by this benchmark. Very few pass the test of time. RCECAP in 10 years did not. Especially not with the bank negara rules ( 10 year maximum loan length) in place.

The determinant of the quality of a business, is it's long term growth, investing revenues, increasing earnings and investing dividends.


And as a minority shareholder, ROE, profit margin, PE is useless if evaluated on its own. As a minority shareholder, what effects you is SHAREHOLDER value. Dilution of shares. Share buybacks. Rights issue. Warrants. Dividends. Share price growth. and in Malaysia ICULS, preferred shares, convertibles.

But of course taken in vacuum that is also silly.

One must also think like a BUSINESS OWNER. Return on capital employed, debt, quality of debt, gearing, revenue, earnings, non performing loans, loan size per person, number of borrowers, the investment grade of borrowers, collateral, performance of peers, the industry projections and horizons, bank negara projections, government (LGE) projections, government salary projections, bond projections, lending criteria, staff employed, performance and growth per branch, branch locations, kpi and performance bonus and (ESOS) for employees and management. And most important, what is the possibility of a bank run, and how much of a hit can RCECAP absorb, before a repeat of what happened 10 years ago reoccurs when the rules change came into effect.

Reducing investment to just 5 metrics is insane for me.

A simple investor is a poor investor.

That is why I don't understand investors who are able to buy 30 stocks, when they can't even name the top 5 management team, their track record and all of the above at the top of their head.

You read the report many many times I assume. Can you name me the top 5 managers without referring back to the report? ( Warren buffet remembers all the managers of his companies by name). If you can do that can you name all the metrics I just put out above as it is all interrelated.

If you can't, I suggest you read the reports a few more times and memorize the details, or stick to companies you are familiar with.

Posted by (70B-SAPNRG-3Yrs) Philip > 2019-03-15 06:51 | Report Abuse

When management is able to execute a full turnaround from a logistics and trucking company into a international fpso company and grow from 100 million revenues per quarter in 2016 to 250 million revenues per quarter in 2018 I have no issues with ESOS.

When a management is able to take the world glove market by storm and go from 500 million revenue per quarter to 1.2 billion revenue per quarter, I have no issues with ESOS.

And these are international companies which has never lost money or a negative quarter, it's business is competing internationally, and are performing far above its peers.

It took 10 years got rcecap to get back to it's 70 million a quarter revenues and earnings level. Will it move to bigger heights in the future? Will it take 10 years to reach 140 million a quarter in revenues? Will it keep it's profit margins and earnings?

Is it worth paying the ESOS to management and workers for this kind of performance?

>>>>

Talking about ESOS to family members, have you seen's TopGlove's? What do you think of it? Or Yinson's?

Posted by (70B-SAPNRG-3Yrs) Philip > 2019-03-15 06:58 | Report Abuse

But don't worry, I'm sure RCECAP is a wonderful investment. I will continue to monitor it closely in the coming years.

Posted by eleh > 2019-03-15 09:09 | Report Abuse

talking on company sbb, i think the cost sbb per share as at today is around 1.06-1.07.

Posted by eleh > 2019-03-15 09:10 | Report Abuse

i think company next move will be giving treasury shares out as ESOS.

Posted by Choivo Capital > 2019-03-15 09:54 | Report Abuse

Phillip,

The only reason why cigar butt method is outdated, is because they are so few of these companies left, and not much money can be placed in them , especially in the US.

Buffet stopped, because his capital is too large and he did not enjoy the process. Schloss stopped because he couldn't find any anymore.

This is not the case in malaysia. You have fairly profitable property development companies, paying out 4-6% dividend yield, selling for 50-70% discount to liquidation value. its a no brainer to buy some in a diversified, for me at least.

Here are two funds in malaysia/singapore who are practicing it quite successfully with good returns. Yeoman Capital, and Aggregate Asset Management.

In the US, you may have heard of this person called Seth Klarman.

There is no such thing as outdated, when it comes to value investing, just whether it can still be executed.

And this is not a cigar butt for me.

That is one way to think about PE6, but at some point, VITROX, PADINI, INARI were below 10PE PE and yielding 7% dividends.

The goal in investing is to find where market is wrong or inefficient, make your purchase, and wait for the market to correct itself.

Wells fargo, BOA etc also have low-ish valuations compared to the market, despite capital structures being far better than in the previous years.

What is investing but the long term arbitrage between the price of the stock and the intrinsic value of the company?

I think the market is wrong.

On your questions on the company, i know enough to understand the 5-10 year competitiveness of the company and the industry, and at this price, i've got a good enough margin of safety. I don't engage in false precision, and chase after information that have low utility.

See the trees miss the woods and all.

This isn't a 50PE company, where i better be right on every single aspect. Still i do enjoy the process of getting to know the company better.

Posted by Choivo Capital > 2019-03-15 09:57 | Report Abuse

By the way,

Its not 10, its 5 years. Moving forward, i don't expect such strong growth, and if such strong growth was obtained in this kind of industry, i would be selling.

I expect a growth somewhere below GDP, since the govt is slowing down hiring etc. If it was fair value, i would not be as keen. But i'm getting a very nice discount.

Posted by Heavenly PUNTER > 2019-03-15 10:00 | Report Abuse

Sharebuyback for ESOS is no difference than taking shareholders money to give themselves. Or I would say robbery if i am not being nice.

Posted by Choivo Capital > 2019-03-15 12:20 | Report Abuse

Their buyback policy is whenever its below book. At this price, i would rather they buy back even more than ESOS issued. They usually buy less.

Posted by (70B-SAPNRG-3Yrs) Philip > 2019-03-15 13:12 | Report Abuse

The last time they hit 70 million was 31st December 2010. Or am I wrong?

Posted by Choivo Capital > 2019-03-15 17:21 | Report Abuse

Oh you mean quarterly revenue. I thought you mean profit for some odd reason.

Yeah in that case, you're right.

I'm in no rush though,slightly below GDP growth is more than enough at this price.

Posted by GLNT > 2019-03-30 08:46 | Report Abuse

https://www.finews.asia/finance/28549-singapore-fintech-launches-platform-for-personal-loans

Posted by GLNT > 2019-03-30 18:50 | Report Abuse

https://www.sinchew.com.my/pad/con/2019-03/30/content_2030352.html

Posted by Choivo Capital > 2019-04-01 11:02 | Report Abuse

Thanks.

Posted by (Clark GKent) Philip > 2019-04-03 19:07 | Report Abuse

Oh god. Fintech startups in Singapore like numoni? Bye bye rm120 million...

Posted by chshzhd > 2019-04-03 23:37 | Report Abuse

fintech so bad meh:)

Posted by GLNT > 2019-04-04 07:20 | Report Abuse

https://sbr.com.sg/financial-services/news/online-lending-startup-offers-personal-loans-50000

Posted by GLNT > 2019-04-04 07:30 | Report Abuse

Philip just simply wanna whack the credit culture deal without without bothering to look at the terms of the deal. Everything RCE is rubbish. George Kent is the best. Got it. Thanks.

Posted by GLNT > 2019-04-04 07:34 | Report Abuse

What happens when credit culture fails? What does the terms say? Will RCE lose the money? What’s the collateral? How does RCE benefit even when CC fails? Oh... everything is gone! Aahhh, who bothers? George Kent is the best investment for now. Yay

Posted by GLNT > 2019-04-04 07:44 | Report Abuse

Is the 120 million investment an equity stake in the company? A bond? Read the sheet. Oh, who cares? GKent!

Posted by Outliar > 2019-04-04 17:25 | Report Abuse

:'D

Posted by ( BNF trader losses ) Philip > 2019-04-12 11:14 | Report Abuse

You don't have to be a genius to know Bitcoin bubble was going to burst, Warren Buffett called it a long time ago.

I buy fintech companies with a specifc purpose that fulfills a certain market need. I don't buy it just because it says fintech. I also don't think the management of RCECAP has the same level of financial acumen.

Maybe you can read more on my fintech investment here ( and the share price today)
https://klse.i3investor.com/blogs/philip2/191042.jsp

>>>>>>>

GLNT Philip just simply wanna whack the credit culture deal without without bothering to look at the terms of the deal. Everything RCE is rubbish. George Kent is the best. Got it. Thanks.
04/04/2019 7:30 AM

Posted by ( BNF trader losses ) Philip > 2019-04-12 11:47 | Report Abuse

Obviously when I say say oh god I back it up with facts.

Here is fact number 1. RCECAP is selling bonds at 10% to credit culture. Sounds good? Wait.

Here is fact number 2. Stop looking at profits, think on the risks ( as someone who borrowed and borrow money to others repayment is more important than profits). In this case there is no collateral or capital guarantee. The bond repayment is based on the loan portfolio receivables. Meaning upon collapse, rcecap will have to do the loan chasing themselves in Singapore. And these will be those b40 people, very hard up already. Got funds? Bankruptcy lo.

Here is fact number 3. What is the basis of lending? Basically it is based on their proprietary internally processed credit scoring system, which we are not privy to. As this is an online, quick lending system, I suspect credit culture will not have the capability to chase after major defaults, and their marketing tool in getting clients is based on lowered borrowing costs, faster approval, no collateral. That is the worst combination I will ever hear in the lending business ever. The best performing banks in Malaysia is public bank and Hong leong, they are successful because they are the most conservative and stringent lenders in town. How safe do you think credit culture will be?

Fact number 4? Look at the founders and the management team. They won after a pilot award from the government of Singapore. Young people and money management had never been a good mix. Ever. Just because it is a cool sounding proposition doesn't mean it will succeed. Especially since it has no track record and a good business fundamentals historically.

Fact number 5? Here is the killer. If you go to the website, the charges are as follows, rates are 0.8% monthly, with 1% setup fees. That means of you borrowed 10,000. You will pay back after 1 year 9.6% + 1% = 10.6% ON YOUR TOTAL LOAN. Let me put it mildly, if we round up and say you are paying 11%, basically credit culture is making 1% profit a year on its loan portfolio. Rce 10% right?

This is obviously ok if you are lending to the super rich or VIP to buy another house, buy that new Mercedes. Especially if it is covered with a huge current/savings/fixed deposit account at the bank. It's perfectly safe.

If you are making 1%, and lending to kids who can barely make ends meet, and need that "personal loan" to pay for things which they can't normally pay for? It's just stupid.

Especially when the chickens come home to roost.

Even rce isn't that stupid.

Posted by stockraider > 2019-04-12 11:54 |

Post removed.Why?

Posted by ( BNF trader losses ) Philip > 2019-04-12 12:04 | Report Abuse

You quarrel but based on stupidity I can't say anything... Let you say whatever you want. I lazy argue with office boys.

Injection Via Bonds

The S$40 million investment from RCE Capital comes via the purchase of five-year bonds issued by Credit Culture. The debt securities are in turn secured against loan receivables from Credit Culture.

The coupon rate on the first S$20 million is 10 per cent per annum, while the rate for the balance S$20 million has not been set, RCE Capital said. The bonds can be redeemed ahead of their maturity at the discretion of Credit Culture.

The Singapore fintech has also granted call options to RCE Capital, which give the latter the right to take a stake of up to 30 per cent in Credit Culture, on the fully enlarged shareholding basis.

Posted by stockraider > 2019-04-12 12:17 | Report Abuse

Put it in a nutshell RCE is investing into the fintech co (credit culture} bonds at the rate 10% pa upto SGD 40m loh....!!

The securities for RCE will be the loan receivable credit created by credit culture by lending to fintech customers loh...!!

Ok mah....RCE is just a lender to the fintech co loh...!!

Posted by ( BNF trader losses ) Philip > Apr 12, 2019 12:04 PM | Report Abuse

You quarrel but based on stupidity I can't say anything... Let you say whatever you want. I lazy argue with office boys.

Injection Via Bonds

The S$40 million investment from RCE Capital comes via the purchase of five-year bonds issued by Credit Culture. The debt securities are in turn secured against loan receivables from Credit Culture.

The coupon rate on the first S$20 million is 10 per cent per annum, while the rate for the balance S$20 million has not been set, RCE Capital said. The bonds can be redeemed ahead of their maturity at the discretion of Credit Culture.

The Singapore fintech has also granted call options to RCE Capital, which give the latter the right to take a stake of up to 30 per cent in Credit Culture, on the fully enlarged shareholding basis.

Posted by ( BNF trader losses ) Philip > 2019-04-12 12:21 | Report Abuse

Ok stockraider you win! You go and borrow rm10 to the beggar in the street tomorrow and tell him pay you back rm11 next year, see he Choi you or not ok? He take your money, say thank you and declare bankruptcy for you big big smile. Nothing to lose if poor.

Enough storytime with despatch kids who don't know how to handle money.

Posted by stockraider > 2019-04-12 12:23 | Report Abuse

Raider just put ur miscommunication to proper perspective nothing about who win who lose lah....!!

Use your brain think lah....!!

Posted by ( BNF trader losses ) Philip > Apr 12, 2019 12:21 PM | Report Abuse

Ok stockraider you win! You go and borrow rm10 to the beggar in the street tomorrow and tell him pay you back rm11 next year, see he Choi you or not ok? He take your money, say thank you and declare bankruptcy for you big big smile. Nothing to lose if poor.

Enough storytime with despatch kids who don't know how to handle money.

Posted by qqq3 > 2019-04-12 12:26 | Report Abuse

I like the participation of Philips and the young One....


and everyone knows whose side I am on.....

Posted by stockraider > 2019-04-12 12:29 |

Post removed.Why?

Posted by qqq3 > 2019-04-12 12:30 | Report Abuse

In stock market, A lot of people are like Choi

But I consider Philips the 1%..........the better approach.


I also think the difference is because Philips do it using his own money while Choi depends on client money. Much easier to get client money using Choi approach.

Posted by qqq3 > 2019-04-12 12:31 | Report Abuse

and of course raider spamming, as usual.

Posted by stockraider > 2019-04-12 12:32 | Report Abuse

qqq u add no value on your comment loh...!!

Posted by qqq3 > Apr 12, 2019 12:30 PM | Report Abuse

In stock market, A lot of people are like Choi

But I consider Philips the 1%..........the better approach.


I also think the difference is because Philips do it using his own money while Choi depends on client money. Much easier to get client money using Choi approach.


qqq3
9420 posts
Posted by qqq3 > Apr 12, 2019 12:31 PM | Report Abuse

and of course raider spamming, as usual.

Posted by qqq3 > 2019-04-12 12:34 | Report Abuse

stockraider > Apr 12, 2019 12:32 PM | Report Abuse

qqq u add no value on your comment loh...!!
======

I think its very insightful of me......I got good insights.

Posted by Choivo Capital > 2019-04-12 12:47 | Report Abuse

Every sen in the fund is mine, or guaranteed by me.

Where its not guaranteed, i earn zero. At least until i have a good enough track record, where i think i can charge as i can get above average returns.

I suggest you consider thinking a little before talking.
=====
I also think the difference is because Philips do it using his own money while Choi depends on client money. Much easier to get client money using Choi approach.