Posted by kcchongnz > 2013-03-14 09:27 | Report Abuse

Where is the substance in your statement? contradict where? BS where? Decorate which statement? Roti canai shop????

Hey you not substantiate anything yet on your allegations. ???

Posted by kcchongnz > 2013-03-14 09:27 | Report Abuse

Hey, taking on my challenge on some intelligent discussions?

Posted by iafx > 2013-03-14 09:29 | Report Abuse

find out in yr own posts lah, stupid! later no staircase to come down cry again

Posted by kcchongnz > 2013-03-14 09:30 | Report Abuse

i can't find any woh!

Posted by iafx > 2013-03-14 09:31 | Report Abuse

intelligent? sorry lah, after reading many of yr statement, u r juz a narrow minded forumer holding several accounts, copied a few finance statement here and there then try to start a group of yr own? after u.

enough said, what the heck wasting time here pulak...

Posted by kcchongnz > 2013-03-14 09:35 | Report Abuse

????? show me the proof! Yeah btw which "several accounts" do I hold? Copy from where? Which group I started? Say them out and show your proof. You just simply shoot and show no substantiations at all. Where is your substance. Hey want to challenge for a debate on finance and investing, and see who BS?

Posted by kcchongnz > 2013-03-14 09:36 | Report Abuse

Hey, don't simply shoot and go hiding again. Don't MIA again.

Posted by 9182 > 2013-03-14 16:27 | Report Abuse

Guys, I have read your messages but I'm still not clear on Plenitude.
Management says proejcts have been delayed and that's why earnings are down - implied that they will bounce back this year. That being so, and given, the cash/landback postion then the price should bounce too.
Is it that easy to predict? Show me why my thinking is incorrect before I go out and buy more.

Posted by Melvin G > 2013-03-14 16:33 | Report Abuse

Chill Kc. Ever heard of Mark Twain's quote ?
“Never argue with an idiot. They will only bring you down to their level and beat you with experience.”

Posted by 9182 > 2013-03-14 16:36 | Report Abuse

Melvin, your reasoning is impeccable, but there is none viz the mnatter at hand. Do you have anything relevant?

Posted by iafx > 2013-03-14 16:44 | Report Abuse

since the "smart" is beaten with experience, so who's the real idiot at whose level; in yr mighty quote?! no worries, diff level, right? hahahaaaa... XD

Posted by kcchongnz > 2013-03-14 16:52 | Report Abuse

9182 relax relax relax. The above message is definitely not for you. Since you are new here, let me tell you my opinion.

I didn't know the pipeline until you mentioned it. If it is true then I agree with you earnings will improve when that pipeline thingy is solved. Good information from you.

Yes, Plenitude got huge amount of cash and their land are in choice areas and were bought cheap. Hence if you look at their margins, they are very high because of the cheap land they have at good locations. For example in 2012, their gross margin is 51% and net profit margin was 35%, very very high. However the share price often is not the same as the value of the company. Price is what the market think it should worth but value is what it is worth looking at what it has and guessing on its future prospect. Look at what I wrote on its value in this thread. It is a guide only.

Price is what you pay. Value is what you get. Warren Buffett

No you are wrong to think that it is easy to predict its share price, that it will bounce back or go down further. Nobody can do that correctly in a consistent way. If he says he can, he may be a snake-oil salesman.

Posted by Steve Jub > 2013-03-14 16:56 | Report Abuse

kcchong, i see you mention safety margin, how u calculate the % of it? using Benjamin Graham's formula/guide?

Posted by tptan45 > 2013-03-14 17:03 | Report Abuse

They are no magic figures. Figured that one out some time back.
My principle = KIS, keep it simple.

Posted by 9182 > 2013-03-14 17:19 | Report Abuse

kcchong thanks for the latitude and reason

Posted by kcchongnz > 2013-03-14 17:36 | Report Abuse

steve, the concept of margin of safety was first coined by Ben Graham many years ago in his book "Security Analysis". It is the margin above the intrinsic value of a stock. For example say you compute the intrinsic value of a stock using Graham's growth formula which is in the form of

Stock price = EPS*(8.5+2g)*4.4/Y

Where EPS is earnings per share, g is the growth rate and Y the MGS long-term bond rate. You make the assumption that the growth of EPS is constant for the 5-10 years and that the MGS rate would not change. But you know that the world is not so perfect that all these things don't change and that your assumptions are right. So if you invest, you must apply a margin of safety, meaning that you will only buy if the share price is certain percentage below this "intrinsic value", just to be on the safe side. For me I often use a margin of safety of about 30%. Note that the Graham growth formula for finding the value of a stock is just one of the numerous ways of valuing a stock.

Posted by Steve Jub > 2013-03-14 18:24 | Report Abuse

@kcchong, oh first time i see this formula. last time, when i read pauline's book, she mentioned also. but she mentioned it in rules, think about 10 rules for safety margin.

Posted by KC Loh > 2013-03-14 18:28 | Report Abuse

that is Ben Graham's calculation of intrinsic value! in fact, he is a genius because this theory came close to many stocks' intrinsic! margin of difference is less than 4% in most cases!

http://en.wikipedia.org/wiki/Benjamin_Graham_formula

its very good kcchongnz utilize this as example on may occassions already!

Posted by kcchongnz > 2013-03-14 18:32 | Report Abuse

Tonylim as promised. But you must understand this is the opinion of a novice armchair investor.

I look at Daiman as a company don’t bother much about developing its land bank at all although it seems to have a lot of good land in Johore, over 400m in book value. It has too much assets, hard cash of over 200m, or 1.00 per share, 257m in investment properties (hotels?). Past records have shown that it is a no growth company. Its average net income has been bouncing around 40m since the last 7 years. Daiman’s management “eat full already and sell pau” (meaning they are not interested in developing its land) only. It is clear if you look at its pathetic ROE of just 4% all these years, achieved with a very low asset turnover of 0.2, although the net profit margin is high at 23%.

However, if you look at Daiman as an asset play, then it is another story. Its hard cash plus its land bank, investment properties, property development costs and other investment are worth 930m. After taking away its total liabilities of 216m, Daiman’s valuable assets is worth at least 714m, or 3.37 per share. This excludes its PPL, receivables, inventories etc of about 280m.

So what is the true value of Daiman depends on how you look at it. Is Daiman going to liquidate its assets and return the cash (4.61 net asset backing per share) to its shareholders? Highly unlikely in my opinion. Are they going to be more aggressive now in their development? How the hell I know?

This is why scuttle-butting is required to be done by tonylim and iska.

Posted by tptan45 > 2013-03-14 19:44 | Report Abuse

Keep it simple.
Look for an online formula (numerous available)
key in whatever is needed
apply a massive discount. I suggest 70%.

Posted by Tipster > 2013-03-14 21:50 | Report Abuse

Huayang is cheap n good

Posted by rlch > 2013-03-14 21:56 | Report Abuse

What about PW? NTA RM3.63 but share price only 42.5sen; 88% discount.

Posted by tptan45 > 2013-03-14 21:57 | Report Abuse

sorry, but what is PW? I would love to check that one out.

Posted by Hustle > 2013-03-14 21:58 | Report Abuse

If all the land bank can directly developed to generate cash flow than is quick good but don't forget that the land bank tax is not cheap and you have to pay it yearly.Means that if you own the land for 10 years without generate cash flow,then all the tax will cash out your pocket.

Posted by rlch > 2013-03-14 23:07 | Report Abuse

tptan45, sorry, but what is PW? I would love to check that one out.
PW is a poultry stock but recent revaluation of its properties cause its NTA to jump to RM3.63.

Posted by kcchongnz > 2013-03-15 06:36 | Report Abuse

Melvin, thanks for the advice. But do you see me going down to his level? My purpose was also to simulate discussions; getting various opinions especially those with opposing views. This will definite help in our investing experience. Don't you think so? You can see we already have some interesting feedback from experienced people like tptan45, Tipster and even my good friend (seriously I treat him as my good friend, I hope he feel the same) Hustle gave us very good information. Some more rich gave us a tip too on PW. This I would put forward my opinion soon.

Also thanks the other KC for helping me to explain the Benjamin Graham's growth model. I truly appreciate it.

Posted by tptan45 > 2013-03-15 08:20 | Report Abuse

Graham's formula: replace the long term bond rate with the max FD rate that you can get in Malaysia and you simplify it further to
EPS *(8.5 +2G )

Posted by tptan45 > 2013-03-15 08:38 | Report Abuse

For a company with a growth rate of around 5-6%, the formula will be approximately EPS*20.
if the growth rate is 11%, it approximaes EPS *30

Posted by kcchongnz > 2013-03-15 09:17 | Report Abuse

PW consolidated Berhad announced its financial year ending 31/12/2012 on 28/2/2013. It made 8.6 sen a share and its asset backing per share is RM3.63. With the market price today at 42.5 sen, if you don’t quickly go and grab some shares, you are an idiot. So is investing that simple, just look at PE ratio, PEG, price-to-book value and apply Benjamin Graham Growth Model etc?

The profit before tax (PBT) in the income statement says that it is 5.4m but in the cash flow statement it is 1.2m, it is a difference of 4.5 times! Which is the correct one? Who is the external auditor? Did I read and misinterpret wrongly? I hope someone can correct me. EPS wise it is between the stated 8.6 sen or less than 2 sen. So which EPS do you use in the Graham Growth formula? I have the strong feeling that the latter one is the correct one because somebody must be trying hard to adjust this EPS. Believe me, there are thousands of ways a creative accountant can manipulate this EPS. Can’t help myself, I have seen this way too often in Bursa. I have seen company utilizing tax credit as earnings, booked claims they think others owe them as earnings. Very common. Worse still I first time saw a company treated its “Bargain purchase gain on acquisition of subsidiaries” as part of the earnings. Companies treating extra-ordinary gains as ordinary earnings are abundant in the Bursa, I believe. These are grossly wrong and can even be considered as frauds.

What is the meaning of PW revaluate its property, plant and equipment and gives an extra-ordinary gain of 89.9m? Are they going to sell these properties and that buyers are willing to pay for these newly revaluated and inflated assets? What is the motive behind this revaluation? PW’s major asset is its PPL of 243m, or 4.00 per share, newly revaluated. Its other assets are inventories and receivables which made up a total of 76.5m, or 1.10 per share. The stock of inventories requires 10 months to clear and the receivables 5 months to collect, very long time indeed. How is the quality of these assets as compared to those of Daiman above? Big difference in my opinion. So what is the fraction of the assets I would take into consideration as “real”, or probably be collected under a fire sale? I will arbitrary assume just one third of it. This will give this asset value of Rm1.80 per share. Coincidently, this is the amount the company owes the banks, the IRD and its creditors. So unless you put a higher realizable value for its assets, PW doesn’t justified as an asset play either.

Poultry farming is a very competitive business. It requires quite some capital outlay and the industry is a price taker. One company which has done very well as one of their businesses is QL Resources. That is because they have a wonderful and dedicated management. Others I am not sure. I still remember I invested in one poultry company named Confarm may be 15 years ago. It had good financials. Actually not too sure about that as that time I don’t read financial statements when I invest (more appropriate term is punt). I lost quite some money there and I have framed up those share certificates in my bedroom as a remembrance.

So is making money in the stock market that easy? I will end here with the following phrases:

“No one protects the retail investor-not corporate officers, not brokers, not analysts, not the media, not even government agencies and elected officials whose job is to do so. An investor must use his own best judgement, all the information available (bearing in mind that publicly available information is never equivalent to insider information), and be very conservative.”

Posted by tptan45 > 2013-03-15 09:36 | Report Abuse

A look at the trend of PW's profit and revenue was enough to put me off.
Just 1 or 2 yrs of good earning is never good enough for me.
A spike in earnings always smells fishy. Rather pass.

Posted by Hustle > 2013-03-15 13:33 | Report Abuse

Bro kcchongnz,regarding to poultry counter I have a very bad experience at CAB & DBE.By logic thinking,their product is a daily consume product and should be very profitable.But,as their share holder,we really cannot get any benefit from the investment.Possibly just once a while get some capital gain and it is only once per year.If you log in at high price then really sorry,even capital gain you also cannot get.Just personal sharing,no hard feeling.

Posted by lotsofmoney > 2013-03-15 13:40 | Report Abuse

Keep away from property counter. Everything from raw material, land price and wages are going up. The rental is flat or down and very soon the resale value will come down as well. Then the bubble will burst.

Posted by Hustle > 2013-03-15 13:42 | Report Abuse

Wages hard to going up lah,as you can see the Bangla still demonstrate in front of the furniture factory.

Posted by ytlok255 > 2013-03-15 13:53 | Report Abuse

kcchong many thanks

Posted by Jonathan Keung > 2013-03-15 14:20 | Report Abuse

undervalued shares is very subjective. the company may be assets rich but please bear in mind is the (major) shareholders pro active or passive in managing the company.

that particular undervalued counter may continue to be under value for a long-long time IF the shareholder does not sell out or maintain the current status quo. this is my personal opinion

Posted by kcchongnz > 2013-03-15 15:21 | Report Abuse

Posted by tptan45 > Mar 15, 2013 08:38 AM | Report Abuse
For a company with a growth rate of around 5-6%, the formula for the fair price will be approximately EPS*20.
if the growth rate is 11%, it approximates P = EPS *30

Yes, very easy to remember. Good rule tptan45. Take note that the long-term interest rate Y now is approximately the same as the time Graham gave this simple rule, ie at about 4.4%.

V=EPS*(8.5+2*g)*4.4/Y

Actually the 8.5 in the formula is the PE ratio assumed with no growth company. Yeah this may be a little bit too generalized as most people assign different PE for different company. But Graham kept in simple at 8.5, which he was actually interested in earnings yield, the inverse of PE ratio of about 12%. Quite rational, isn't it?

Note the importance of growth, g for the value of a company. That is why tptan45 didn't want to look at rich's PW because there is no growth.

But look back at the formula, even a no-growth company may still be a good buy depending on the market price because no-growth company still has a fair value of V=EPS*8.5. This means that company can continue to give you an earnings yield of about 12%. So if a company continues to earn 10 sen a share, even at 0 growth, its fair value is 85 sen; and if it selling at say 50 sen, isn't it still worth to invest?

Posted by Joshua Lee > 2013-03-22 10:57 | Report Abuse

Anyone has views on Tambun? Been eyeing it since 70c but not daring enough to go in due to its short track record in Bursa. But it has kept its promise in paying dividends and seems to be doing really well. The share price is doing well too.

Posted by kcchongnz > 2013-03-22 11:04 | Report Abuse

Joshua,
Tambun, another property stock in the North, is a much better run company with better future than Ivory. This is what I have said before.

Posted by kcchongnz > Feb 13, 2013 03:48 PM | Report Abuse X
jtpc2006, again don't know much about Tambun. However I just had a quick look at its most recent quarterly report. Very good indeed. I would expect its full year 2102 results should make about 15 sen per share. At a price of 74 sen now, PE is just about 5, another undervalued property stock. Balance sheet is very healthy. This year's cash flow abundant. ROE about 13%, not bad. Good choice. If I am not mistaken, they give good dividend too, don't they? I think I am contemplating to buy some too. I don't know about its prospect. That has to look at the land it has, the development plan they have, the demand etc which is beyond what I can do as a small time retail investor.

The latest financial statement ended 31/12/12 announced recently actually shows that Tambun made 15 sen per share, right to the spot, by chance.

Posted by pyramidpoh > 2013-03-22 11:08 | Report Abuse

Many property sectors haven't been updated their EPS,NTA,Financial Reports,Cash flow etc.You invest in property sectors should be careful.You must make a thorough research and study before you invest.I get rid of this sector as we have still a lot of sectors to invest.

Posted by kcchongnz > 2013-03-22 11:16 | Report Abuse

I only have one property stock. Not very keen in this sector too. but I don't understand what you mean below.

Posted by pyramidpoh > Mar 22, 2013 11:08 AM | Report Abuse
Many property sectors haven't been updated their EPS,NTA,Financial Reports,Cash flow etc.

Every company listed in Bursa has to provide their quarterly report, audited reports, annual report etc. They have datelines to do that and seldom they fail to do that.

Posted by passerby > 2013-03-22 11:20 | Report Abuse

Scientex is considered property sector le :), you got 2 in your holding including Plenitude if i'm not mistaken

Scientex doing well

Posted by kcchongnz > 2013-03-22 11:32 | Report Abuse

passerby, yes, I bought Scientex before but sold already. Make some money but bang balls. See the problem of itchy finger? For plenitude, I am still in the negative side. But Plenitude has good value, in my opinion. I have written about this.

Actually Scientex should be doing much better in the near future because of its acquisition of Great Wall plastics. Its industrial packaging manufacturing with various products such as stretch film, laminated bags, bulk bags, corrugated carton boxes etc will be taking over its property segment soon. i have posted this before.

Posted by pyramidpoh > 2013-03-22 11:32 | Report Abuse

I meant that the financial results reported in the stock quote is not very transparent.Take example PW Consolidated BHD NTA in general information is RM3.63.Maybe it had a lot of debts in Bank borrowings we don't know.What I mean you have to make a thorough research and study before you invest.

Posted by Joshua Lee > 2013-03-22 11:35 | Report Abuse

>>Posted by kcchongnz > Mar 22, 2013 11:16 AM | Report Abuse

I only have one property stock. Not very keen in this sector too. but I don't understand what you mean below.

>>Posted by pyramidpoh > Mar 22, 2013 11:08 AM | Report Abuse

Many property sectors haven't been updated their EPS,NTA,Financial Reports,Cash flow etc.You invest in property sectors should be careful.You must make a thorough research and study before you invest.I get rid of this sector as we have still a lot of sectors to invest.

>> Yeah I agree. That's another reason holding me back from buying Tambun thus far. I've been holding Plenitude (based on fundamentals) and Mulpha (which was more of a punt) with paper loss for more than a year now.

Posted by kcchongnz > 2013-03-22 11:39 | Report Abuse

iayah pyramidpoh, you are talking about a poultry stock PW, not a property stock. Btw, PW like any other public listed company has submitted their reports on time. It just that you have to understand and interpret the financial statements yourself to see if PW really has a NAB of 3.63 per share. I agree with you, its financial statements is very deceiving.

Posted by iafx > 2013-03-22 11:48 | Report Abuse

good DY is one of the must-have catalyst to grow property stock price, not only depends alone on how much cash in-hand, land asset. if the company is not able to unlock these value and translate that into real $ (e.g div) for u, u r holding a nice looking paper - subject to drop

there r several properties stock that have 7% yield and above, try these counters. btw, buy small, slow and hold steady, don't rush.

Posted by kcchongnz > 2013-03-22 13:51 | Report Abuse

One must understand cause and effect. A company with good growing business, good earnings and free cash flows only have the money to enhance its balance sheet with cash. With this cash then only company can distribute good dividends to shareholders. One of them is Pintaras. In the process its share price also can go up. A company pays high dividend but with poor business and cash flow and high borrowings don't have the cash to sustain the high distribution of dividend. In fact it will go bankrupt one day rather than "grow property stock price"

So this statement "good DY is one of the must-have catalyst to grow property stock price" is flawed.

Posted by Desmond Liew > 2013-03-22 14:09 | Report Abuse

Hi kcchong,,, what is your opinion as per my example below:-

Majority people say Alam (case study only) has a TP RM1.10 & its current price is 0.93. During & after GE13, its price assumes to fall 20% to 0.744. After GE13, everything goes smooth, will the price go back to its 0.93 or in short, does the TP stii effective?

Posted by tptan45 > 2013-03-22 14:11 | Report Abuse

Buy a company which can grow, and with a business which 'an idiot can understand and run, because sooner or later an idiot is going to run it.'

Posted by iafx > 2013-03-22 15:48 | Report Abuse

div is REAL HARD CASH, property counters that capable of giving good DY proved itself (in real world) is growing and SUPERCEDE the inflation rate. such property counters are far better than those sits on pile of $/lands (so call 'strong bs', 'undervalued'), best is certain 'famous' counter even called for right issues to gather $, despite their 'strong bs'

bcos property counters r selected for mid term holding at least, rely only on 'strong bs' in hope for capital gain, which in turn affect by greater economic, policy contexts will expose yr holding to overweight risk. with good DY, yr holding is strongly back by the earning capability of the counter, NOT VALUE ON PAPER

u also want to watch out low liquidity counter, which also depends on 'wish list', such counter without strong catalyst, will trade like dead water, and r no securities house covering them as well - which already tells u 1 way or another, the management is in question