Posted by tonylim > 2013-06-22 18:32 | Report Abuse

kcchong, are you heavy in favco?

Posted by wayne1982 > 2013-06-22 18:38 | Report Abuse

Beside Fima, I have intention to invest in Hapseng. By looking in the diversified business and dividend, it is attractive to me.. Mr Kc, can you share your view?

Posted by kcchongnz > 2013-06-22 18:43 | Report Abuse

wayne1982, I have looked into Hapseng if it meets my strategy of investing as a high dividend stock. It may serve as a guide for you.

Posted by kcchongnz > Jun 10, 2013 06:25 PM | Report Abuse X

does Hap Seng Consolidated meets the requirements of a high dividend yield strategy as mentioned in this thread?

Posted by gordan85 > Jun 9, 2013 02:33 AM | Report Abuse
thank you kc, as FCM100 said, do you mind to comment on hapseng?

Hap Seng paid a dividend of 10.5 sen last year. It is expected that the dividend payment will be the same of higher this year. Hence the dividend yield is 0.105/1.96=5.4%, higher then the FD rate of 3.5%. Hence Hap Seng meets the first criterion, ie

1. Does the dividend yields exceed the bank fixed interest rate, currently about 3.5%.

As Hap Seng earns 19.6 sen last year, the dividend payout ratio

b=10.5/19.6=54% which is less than the criterion as stated below:

2. Dividend payout ratio should be less than a cut-off, say 65-80% to have growth.

Hence it is assumed that adequate amount of money is spent on capital expenses, and hence future expected growth.

I don't know what is the expected growth rate of Hapseng for the next 5 years. That is the job of analysts to analyze and find out. However from the past 5 years, Hap Seng's revenue and profit has been growing at a CAGR of 6% and 8% respectively which meets the third criterion below:

3. Reasonable growth rate in earnings at least matches the overall economy, say >4%.

Hence overall Hap Seng meets all the three criteria as a stock for the high dividend yield strategy stipulated by me.

Posted by kcchongnz > 2013-06-22 18:45 | Report Abuse

Posted by Hafiz Millip > Jun 22, 2013 06:29 PM | Report Abuse
kcchongnz...would like you advise on CSL which receive bad sentiments from local investors. Is it a bad counter?

Hafiz, what does the stock price of CSL below tell you?

CSL 0.3 14/06/2013
Period 2-week 6-month 1 year Since listing
Price 0.36 0.78 1.42 1.00
Return of stock -16.7% -61.5% -78.9% -70.0%
CAR -99% -85.2% -78.9% -60.4%
Dividend 1.1% 21.0%
Stock price appreciation -99% -85.2% -80.0% -81.4%

Posted by kcchongnz > 2013-06-22 19:03 | Report Abuse

Posted by tonylim > Jun 22, 2013 06:32 PM | Report Abuse
kcchong, are you heavy in favco?

tonylim, I don't own any Favco share. I have given very positive comments of many stocks because people asked for my opinion, not because I own the share. I am not that rich btw.

Posted by Steve Jub > 2013-06-22 19:26 | Report Abuse

Kcchong, what do you think benalec and azrb fundamental? I check it look good to me. I bot some benalec but azrb not yet.

Posted by Drachen > 2013-06-22 20:44 | Report Abuse

Thanks kcchongnz. Great analysis.

Posted by kcchongnz > 2013-06-23 17:40 | Report Abuse

Benalec Holdings - Slowly turning sand into gold. Really?

Posted by Steve Jub > Jun 22, 2013 07:26 PM | Report Abuse
Kcchong, what do you think benalec and azrb fundamental? I check it look good to me. I bot some benalec but azrb not yet.

All the three investment banks covering Benalec, CIMB, Kenanga and AMMB have target price of over RM2.00 for Benalec in their most recent analysis. The average target price is RM2.20. Most forumers in i3investors here are also bullish about Benalec. So what can go wrong with this high flier?

There are lots of interior land in Malacca, Johore and other states. Why is “manufactured land” which requires high cost to “manufacture” so valuable? Is this model of reclaiming the land first with your own cost and then hopefully sell to others a durable business?

Benalec’s revenue for the trailing twelve months 2013 has grown by 34% to 210m but its net profit dropped 21% to 65m. Net profit margin plunged from 53% to just 31%. Return of total capital deteriorated from 19% to 13%, just about the cost of capital. It did not produce any positive cash flow from operations for the last two years. Hence Benalec is hardly a “good” company in my book.

At the close of its share price at RM1.37 on last Friday, 21/6/2013, it is trading at a forward PE ratio of 16.7 (>10) and a price-to-book value of 2 (>1.5). Hence it is also hardly a value stock in my definition. Nothing interesting about Benalec for me.

Posted by Steve Jub > 2013-07-01 08:40 | Report Abuse

Thanks KCChong...Just wondering do you also invest into REIT? I was thinking to allocate half of my portfolio into REIT which is safer investment and another half into stocks investment. Any good REIT to recommend? ARREIT

Posted by kcchongnz > 2013-07-01 12:37 | Report Abuse

Steve, Reit by regulation is required to pay out most of its income as dividend. 90%, I think. Hence generally the dividend yields for reits are higher. As I have argued before (not really argue but from academic research), high dividend yields do not necessary mean high total return. And many reits also regularly ask money from shareholders through right issues. May be good for people who require regular income, but then if there is right issue, have to fork out money, not too good.

So investing in reits have to do homework too; such as are their properties at good location? always fully rent out? Management have been making right decisions in acquisition etc etc. I personally am not that interested in reits and have not much knowledge about them.

Posted by alx > 2013-07-01 13:31 | Report Abuse

KCchong. very good discussion here. This is the main purpose of forum.

What do you think of Hua Yang? Does not have DIBS scheme. Cash flow almost double up from 2011 to 2012. NTA is around 1.7 (price about 2.8 now). Consistent growing of EPS. Focus on affordable housing.

Posted by Jonathan Keung > 2013-07-01 13:46 | Report Abuse

DIBS will have an impact on certain high end developer. Hua Yang more on affordable market will not be impacted. i believed Hua Yang also not selling Penang houses thru DIBS

Posted by rcdahmad > 2013-07-01 13:49 | Report Abuse

Mr kcchongnz.....
i think mkland also undervalued properties counter..... EPS and div. keep increase, except that mr kasi always dump and press the share price down....
any comment mr kcchongnz.....

Posted by almufathal > 2013-07-01 14:02 | Report Abuse

DAIMAN

Posted by htyeap125 > 2013-07-01 14:16 | Report Abuse

Mr kcchongnz, wat do u think of E & O, with its over 700 acres of land to be reclaimed n healthy balance sheet? Need your advice, thanx

Posted by oldman > 2013-07-01 14:23 | Report Abuse

Any comment to share on KSL? Recent article in NYSP highlighted this counter.

Posted by kcchongnz > 2013-07-01 15:19 | Report Abuse

Is Hua Yang a hidden gem?

Posted by alx > Jul 1, 2013 01:31 PM | Report Abuse
KCchong. very good discussion here. This is the main purpose of forum.
What do you think of Hua Yang? Does not have DIBS scheme. Cash flow almost double up from 2011 to 2012. NTA is around 1.7 (price about 2.8 now). Consistent growing of EPS. Focus on affordable housing.

Below is what I posted for Hua Yang about 5 months ago. I said Hua Yang should at least worth 2.80. And at that time it was trading at 1.69. But now it is 2.82 already. So what do you think?

Posted by kcchongnz > Feb 8, 2013 10:51 PM | Report Abuse X
necro, my opinion on your Hua Yang
Hua Yang is one of the fastest growth property companies in the last three years. Its main project is the One South Sri Kembangan development which has a GDV of RM920m, with other minor projects spread over in Johore, NS and Selangor. Revenue rose by a compounded annual rate of 82% and 62% respectively in the last two years to 306m for year ended 31/3/2012 and profit ballooned by almost 5 times to 53m. Net profit margin has expanded every year to a respectable 17.3% last year and ROE to 20%. A dissection of its ROE below shows that the high ROE is achieved with the high net profit margin, NI (17.3%) and skillful use manageable debts and good financial leverage of 1.7.
ROE=NI*AT*FL=17.3%*0.7*1.7=20%
With more projects expected to come on-stream, it is expected that asset turnover will increase and so is the ROE. Earnings per share increases every year, despite the issuance of bonus share each year to its shareholders. In the year ending 31 March 2012, EPS is 37 sen. For the three quarters ending 31 December 2012, net profit increased further to RM53.5m, or 28 sen per share with a another increase shares outstanding to 198m due to the 1 for 4 bonus issues. EPS is estimated to be about 40 sen for the full year. Its balance sheet is healthy with a debt-to-equity ratio of just 0.36 (<1), and low solvency risks with current ratio high at 3.0. However, there is no free cash flow yet as Hua Yang uses all its CFFO to buy up more land for development and other capital expenses. FCF will come soon. Hua Yang gave a dividend of 15 sen for the last few years, despite the increase in outstanding shares. If this dividend persists, this will translate to a dividend yield of 9.3%, with today’s closing price of RM1.61. Meanwhile the PE ratio is incredibly low at just 4.4. Using the simple valuation with ROE of 20%, a 12% required return,and a net tangible asset per share of RM1.69, Hua Yang should worth RM2.80 (20%/12%*1.69). Don’t you think it is a good investment?

Posted by euclid > 2013-07-01 15:20 | Report Abuse

Hua Yang has been uncovered. No more hidden...

Posted by kcchongnz > 2013-07-01 16:19 | Report Abuse

MKLand a hidden gem?

Posted by rcdahmad > Jul 1, 2013 01:49 PM | Report Abuse
Mr kcchongnz.....
i think mkland also undervalued properties counter..... EPS and div. keep increase, except that mr kasi always dump and press the share price down....
any comment mr kcchongnz.....

I posted my comment on MKLand some time ago when MKLand share price was 33 sen. Now there is not much different when many property share price has gone up by leap and bound. MKLand has not been distributing dividend since 2008 until very recently when 1 sen was declared after they got some cash selling land. Correct me if I am wrong.Earnings keep rising? Sure or not? The biggest problem to me about MKLand is the credibility of the management. I read that bosses bought properties developed by MKLand and sold to public at much higher prices. That is fatal for the minority shareholder. So MKLand a hidden gem? Definitely not in my book.


Posted by kcchongnz > Mar 26, 2013 12:37 PM | Report Abuse X
anbz, how are you? Wah MK Land ah, quite a lot of asset oh. I share with you what I think about MK Land ok or not?

[Posted by kcchongnz > Dec 25, 2012 05:54 PM | Report Abuse X
Again the revenue and earnings of MK Land for this few years is relatively little. It could be an asset play as its NAB per share is 89 sen, is 2.7 times its share price of 33 sen. Even with the Graham net-net valuation of MK Land at 40 sen, ignoring its asset of 160m in plant and equipment and assuming value of its receivables and property development cost at 50% of their stated value, is still higher than its share price of 33 sen. It has quite high debt of a total of closed to 200 m though and hence quite high annual interest payment of 20m. The good thing is it has stopped hemorrhaging since its worst performing year in 2008 when it lost 65 m, and the subsequent 26 m loss. That is the peril of a highly leverage company. Again there are so many other property companies which are also highly undervalued, many of them even cash rich. So is there a better story for MK Land?]

Want to know about its DY history? MK Land never gives dividend for at least 5 years already loh! Yeah I know I know, Public Bank gave a minimum price target of 80 sen. In the share market, anything is possible.

Posted by rcdahmad > 2013-07-01 16:34 | Report Abuse

thank a lot mr kcchongnz....

Posted by alx > 2013-07-01 16:42 | Report Abuse

KCchongnz...thanks for the insight. We really appreciate your useful comment here.

Posted by kcchongnz > 2013-07-01 18:31 | Report Abuse

KSL a hidden gem?

Posted by oldman > Jul 1, 2013 02:23 PM | Report Abuse
Any comment to share on KSL? Recent article in NYSP highlighted this counter

Well, the author of that article definitely knows more about KSL than I do. In actual fact I don't know much of KSL at all. what did the author say?

I know this person Ooi Teik Bee also likes KSL very very much. He seems to know a lot too about this Iskandar play thing.

But that shouldn't stop me from giving my don't-know-much opinion too, right?

KSL's Iskandar land bank is definitely very valuable. This is evidenced from its consistently high gross margin (60%) and ebit margin (>50%). Its ROE and ROIC are also ok lah, meeting minimum requirement of 12%. What about its price?

At the close of RM1.99 today, PE ratio is about 6 (<10), and earnings yield (ebit/EV) is about 20% (>12%). Both these metrics show the price of KSL is quite cheap and hence worthy of investing.

A better way of valuing KSL may be is to use its land bank and value them based on market value. But that is beyond what I can do. Maybe some other can help here.

Posted by Ooi Teik Bee > 2013-07-01 18:44 | Report Abuse

Dear valued members,

It is not a recommendation to buy, I just want to show the Intrinsic value of KSL share. It is really undervalued. This worksheet was done recently when KSL share price is 2.12 and WA is 0.925.

KSL
Total Net profit years 10/10

Total Positive Operating Cash Flow years 9/10

Total Dividend Payout years 9/10

Total Positive Free Cash Flow years 4/10
32/40
Growth
10 years Average Turnover 255,442
31/12/2012 (latest) 404,431 58.3%

10 years Average Net Profit 92,069
31/12/2012 (latest) 131,580 42.9%

2010 2011 2012 Q1 2013 Growth
EPS 32.0 21.5 34.1 39.47 15.92%
PER 6.63 9.86 6.23 5.37 15.92%
ROE 13.8 8.78 12.2 13.34 9.34%
NTA 2.51 2.46 2.79 2.99 7.17%

Price CAGR % (Buy and Hold)
Average return (history) 9.76%
3 years return 14.29%

Method 1
EPS 39.47
g (growth) 7.96
Y 7.0
IV=(EPS*(8.5+1.5g)*4.4)/Y 5.07
Current price 2.12
Margin of Safety 58.19%
Potential gain 139.20%

Method 2
Discounted Cash Flows Calculator
Discount rate 12.00%
EPS 39.47
Earning expected to grow (annually) 7.7
for the next (? Years) 3.0
before leveling off to an annual growth 3.00
Calculate Stock Value per share 5.05
Current price 2.12
Margin of Safety 58.02%
Potential gain 138.21%

Method 3
IV=ROE/Rr*NTA
ROE 13.34%
Rr 12.0%
NTA 2.99
IV 3.32
Current price 2.12
Margin of Safety 56.8%
Potential gain 56.8%

Method 4
(22.5*EPS*Book value per share)^0.5
EPS 0.39
Total equity 1155443
Number of shares 390548
(22.5*EPS*Total Equity/share)^0.5 5.13
Current price 2.12
Margin of Safety 58.64%
Potential gain 141.78%


KSL-WA
Expiration date 19/8/2016
Exercise price 1.60
Price of Mother share (KSL) 2.12
Actual price of WA 0.925
Premium 19.10%
Gearing 2.3

Conclusion

Please note that base on aforesaid calculation, KSL price is about 5.13, KSL-WA is = 4.24.

Technical chart
This stock is very weak technically because LTAT is still selling this stock. This is a down trending stock until big seller completed their selling on this stock. I do not think it is time to buy this stock unless you are willing to hold it for at least 6 months.

I want to cautious valued members here that it is a correct strategy for someone to push down the share price so that this stock can be taken private at a low price. Please reject this takeover unless the takeover price is 110% of its NTA (2.99) which is = 3.29.

Thank you.
Ooi

Posted by kcchongnz > 2013-07-02 07:26 | Report Abuse

E&O a hidden gem? Really?

Posted by htyeap125 > Jul 1, 2013 02:16 PM | Report Abuse
Mr kcchongnz, wat do u think of E & O, with its over 700 acres of land to be reclaimed n healthy balance sheet? Need your advice, thanx

1) When and how long to claim the land?
2) What is the cost and benefits? Any numbers and projections?
3) How healthy is its balance sheet? Have you analysed it yourself or just a sweeping statement?

Let me just present my view as an armchair investor with the principles used by Cold Eye. Revenue increased by 23% to 606m while net profit increased by 6% to 130m last year ended 31/3/13. The table below shows the 5 yardsticks used and their computations based on the latest financial results:

5 yardstick of investing by Cold Eye
E&O RM1.99 1/7/13

1 ROE 9.4%
Net profit 130071
Equity 1389963
2 Cash flows
CFFO/NI 32%
FCF -40835
3 PE ratio 17.0
Price 1.99
EPS 0.1172
4 Dividend yield 2.3%
Dividend , sen 4.5
5 Price/NTA 1.6
NTA 1.26


The Table above shows E&O doesn’t fit the value investing of Cold Eye. ROE of just 9.4% is way below my required return of at least 12% in view of its relatively high debt of 0.6 times of equity.

Earnings quality is poor with cash flow from operation of just 42m, or 32% (<<100%) of net income. There is a negative FCF of 41m last year. Cash flows have been poor for the last two years. That is why you can see its total debts are increasing each year; 772m last year compared with 605m the previous year.

E&O paid a dividend of 4.5 sen last year, increased from 4.25 sen the previous year, or a dividend yield of 2.3% basing on its share of 1.99 now. But understandably the money from this dividend is obtained from more borrowed money, and not from its free cash flow which there is none.

Is the price cheap at 1.99? With the above mediocre performance, a PE ratio of 17 and price-to-book of 1.6 is very high for me.

So do you still maintain that E&O is a hidden gem? Not for me.

Posted by iska > 2013-07-02 08:01 | Report Abuse

Hi. I posted on Iskandar theme stocks previously. I entered the Msian mkt rather later, around Dec 12, but has made more than 50% from my portfolio of Iskandar stocks. Have exited about 70% of my holding, but still own Sunway wrt, Tropicana wrt, Mah Sing wrt, WCT wrt, and to a lesser extent, Crescendo and Benalec. Those I have made and exited are IJM Land, Tebrau, Hua Yang, KSL n its wrt, UEM Sunrise and UOA. I am inclined to re-enter Iskandar stocks, but am not sure about the timing.

My analysis is very unprofessional, but I base my picks on many analyst reports, amount of land the property companies hold in Iskandar or KL, impending project launches, dividend history, comments by others about management, etc.

Based on all that, I am inclined to continue liking Sunway and its wrt, Tropicana and its wrt (though looking for lower entre price), Crescendo (lower price), IJM Land (lower).

kc, could u comment on Sunway, Tropicana, Crescendo, IJM Land if u have the time, or if u have already looked at these stocks? Thanks.

Posted by kcchongnz > 2013-07-02 08:26 | Report Abuse

iska, sorry again I really don't know much about valuation of property companies. You did much better in looking towards the future,basing on many analyst reports, amount of land the property companies hold in Iskandar or KL, impending project launches, dividend history, comments by others about management, etc., and as a result made handsome return. Congrats.

My view is a rear mirror view. Just like what I have commented on Crecendo before in i3. May not be that useful.

Posted by iska > 2013-07-02 09:56 | Report Abuse

hi kc, np. Thanks. I enjoy your generosity in sharing. Much appreciated.

Posted by oldman > 2013-07-02 09:58 | Report Abuse

Thank you Kc amd Ooi for your time on KSL.

Posted by tonylim > 2013-07-02 10:00 | Report Abuse

Kcchong. . Use the front mirror.
I see Peugeot cars has a front mirror what looks like a periscope

Posted by aaron69 > 2013-07-02 10:40 | Report Abuse

Hi,Kc,
Been following your views and found them to be amongst the best in the forum.Could you please provide some view on LANDMARK and A&M?Do they fall into your category of stocks which you would consider to invest in?Thank you for your replies in advance.

Posted by kcchongnz > 2013-07-02 11:38 | Report Abuse

Landmark good investment?

Again I am not sure but let me show you what an analyst wrote about in 2 years ago when Landmark was trading at RM1.40+.

From: Phillip Capital Management Sdn Bhd <pcm_investment@poems.com.my>
Date: Mon, Jun 27, 2011 at 7:09 PM
Subject: Landmarks Bhd ("Landmarks") - Rich in Assets, Poor in Earnings
To:
Dear Investor
We like Landmarks for its huge asset base and its potential development of Treasure Bay Bintan. Additionally, we have strong conviction with Genting Bhd's financial backing. In terms of valuation, the P/B is only 0.4x and it is trading at 75% discount to its RNAV of RM5.80 which is far below the industry average. If we use the P/B of 0.7x from the close comparable, Gallant Venture, Landmarks should trade at RM2.47 per share or 69% upside potential. Furthermore, technically its share price is near its support Therefore we initiate a "Long Term Buy" for this asset-rich but earnings-poor stock.
Thank you.
For Phillip Capital Management Sdn Bhd
27 June 2011

Sounds great right? But if one has followed the recommendation and bought Landmark then, he would have found his investment depreciated by more than 20%. He would definitely feel heartache when comparing with most other stocks which have appreciated by leaps and bounds. Since then Philip Capital has taken this stock off from recommendation list.

The thing with this stock is it is highly dependent on its estimated RNAV, a dicey figure. The catalyst for landmark is that Treasury Bay. Don't know when that thingy going to be done and completed. RNAV has no meaning if that thingy not going to be done. If it is carried out, could be a multi-bagger for landmark in the long term. Of course the project must be successful, attracting huge number of holiday makers and gamblers from the region. But it is only a projection,a projection which could also be grossly wrong on the other side.

I am one who won't rely on rosy projections. Hence I seldom strike multi-baggers in my investment and can't get rich. So for Landmark, I will give it a pass over too.

Posted by Steve Jub > 2013-07-02 12:19 | Report Abuse

KCChong, since huayang has reached it fair value (RM2.8) and time to sell to move to another ?

Posted by htyeap125 > 2013-07-02 13:02 | Report Abuse

Mr kcchongnz, thanx for the valuable info, really appreciate your effort and help

Posted by Tiago Gt > 2013-07-02 15:53 | Report Abuse

hey guys....how about nextnat?

Posted by newbiestock > 2013-07-02 16:18 | Report Abuse

kcchongnz how come u analysis cheap stupid stock ony ah? neva good expensive stock? are you poor oso ah?

Posted by newbiestock > 2013-07-02 16:19 | Report Abuse

i guess poor people like to c big numbers to buying cheap stock makes them feel rich. i guess that is y kcchongnz always talk cheap stock!!!

Posted by newbiestock > 2013-07-02 16:23 | Report Abuse

tell me la kcchongnz and ooi tek how come u analyse cheap pathetic stock ony ah?

Posted by inwest88 > 2013-07-02 16:34 | Report Abuse

newbie, you should appreciate the effort of others for their stock analysis. They do not owe it to you to do what you want.

Posted by oldman > 2013-07-02 16:35 | Report Abuse

L & G, any comments? Thanks.

Posted by newbiestock > 2013-07-02 16:38 | Report Abuse

lolz@inwest88 u mus be poor too ? like cheap stock ah?

Posted by newbiestock > 2013-07-02 16:38 | Report Abuse

kcchongnz and ooi tek should be banned from this site for promoting cheap stocks

Posted by newbiestock > 2013-07-02 16:39 | Report Abuse

dis site is for investor not for poor people who buy cheap stock no wonder then KLSE is messed up to much cheap propoganda here

Posted by gark > 2013-07-02 16:40 | Report Abuse

Now i know why your name is newbiestock cause you are total idiot in stock investment. You cannot differentiate between cheap and expensive stock based on value.

Posted by newbiestock > 2013-07-02 16:42 | Report Abuse

lolz@gark u mus be intelligent i guess? u like cheap stock too?? maybe 2o cent counters? i am new here that is why that name u imbecile

Posted by KC Loh > 2013-07-02 16:42 | Report Abuse

Posted by newbiestock > Jul 2, 2013 04:38 PM | Report Abuse
kcchongnz and ooi tek should be banned from this site for promoting cheap stocks

alexlulu aka newbiestock aka cheebai aka optikusrich etc etc, dont disturb people who are contributing. come come! disturb me la! i am always available to hammer you and whatever nick you want to come out with! LOL

Posted by newbiestock > 2013-07-02 16:43 | Report Abuse

gark y don u trying buying Rm10 and above stock la and c if u make $ then those 50 cent counters u buy try that??

Posted by newbiestock > 2013-07-02 16:44 | Report Abuse

gark please do consider buying expensive stock. OK. it may make u rich so u dont remain poor all ur life

Posted by newbiestock > 2013-07-02 16:44 | Report Abuse

kcloh again picking on me ah? u mus like cheap stock too are u poor?

Posted by KC Loh > 2013-07-02 16:44 | Report Abuse

newbiestock wait, i take my dogs out for a walk first ya? i will be back for you! order of priority! LOL

Posted by newbiestock > 2013-07-02 16:46 | Report Abuse

stock pickin on me jus because i am telling u guys off..kcloh i know u are a chinese hater so i do as u wish