Friday, December 31, 2010

HAPPY NEW YEAR 2011!

Numbers taken from http://www.thisnext.com

Wishing everyone have a great health and wealth in 2011!

p/s: sorry for the crap design using paintbrush.

Monday, November 29, 2010

Offshore Support Vessels (OSV) - Current Outlook


As three O&G support companies Coastal Contracts, Alam Maritim and Sealink highlighted in previous post involve in Offshore Support Vessels (OSV), it is important to know more about the outlook of the OSV in general.
Below best illustrated the driving force of the demand of OSV and its current scenario.



                                                   Source: Presented at Tugs & Offshore Support Vessels (TOSV) Asia 2010,  
                                                   Kuala Lumpur, Oct 07 & 08, 2010 by Mantrana Maritime Advisory

The oversupply of OSV is still the biggest issue currently which affecting the order of new OSV and the chartering rate. Latest earning reports of Alam Maritim and Tanjung Offshore which mainly deriving their earning through chartering of OSV is disappointing. Although Coastal Contracts, with shipbuilding as their main contributor, announcing a good set of quarterly earning, there are still no announcement of new order received since 2008.
So, would you still bet on these three stocks? Or which of these three would be your best bet? Please exercise your own judgment.

Thursday, November 25, 2010

Oil & Gas - Sector in Focus

Would the news below stimulate the oil & gas sector?
Prime Minister Datuk Seri Najib Tun Razak is expected to announce on Nov 30, new development projects as well as several entry point projects (EPPs), that will boost the oil, gas and energy sector.
Read more: Najib to announce ETP projects on Nov 30 http://www.btimes.com.my/Current_News/BTIMES/articles/20101125142859/Article/index_html#ixzz16IkVn500
Malaysia will soon become one of the world's four deepwater oil and gas (O&G)hubs, standing shoulder-to-shoulder with industry leaders like the United States, Brazil and Europe.
Prime Minister Datuk Seri Najib Tun Razak said the Asia-Pacific region has seen increased interest in deepwater development and Malaysia is already at the forefront of this development.
Read more: 'Malaysia to be a global deepwater O&G hub' http://www.btimes.com.my/Current_News/BTIMES/articles/20101125164710/Article/index_html#ixzz16IpJnzN7
After scanning few O&G support company, I found few companies still trade at 52 weeks low. Mind you, there are not loss making money companies but very much in profit. It maybe due to certain fundamental issue or they have been off the radar of investors. Below are the charts (copy from tradesignum.com) of the three companies with their previous earnings reported.

Coastal (Current Price: 2.31)

Alam (Current Price: 1.14)
 
 Sealink (Current Price: 0.615)
It would be too simplistic to decide based on the chart and earning but it do tell a small part of the story for you to continue researching it. Please do check on the business, management, balance sheet, Cash Flow, etc or seek the advise from your investment adviser.

 

Saturday, November 20, 2010

Reinsurance?

In my 12 years of investing, I only bought two stocks related to financial or insurance industry. The reason is that I have problem understanding their financial statement.
Lately, I try to look into MNRB, a reinsurance company.
According to Investopedia, Reinsurance is the practice of insurers transferring portions of risk portfolios to other parties by some form of agreement in order to reduce the likelihood of having to pay a large obligation resulting from an insurance claim. The intent of reinsurance is for an insurance company to reduce the risks associated with underwritten policies by spreading risks across alternative institutions.
In simpler term, reinsurance is insurance bought by the insurance company to transfer part of the risk to the other parties.
After getting to know their core business, I have to bypass this company simply because it will be much harder for me to understand their business as the formula below,

Reinsurance = Insurance x Insurance = Insurance2

For those interested to know more about this business, you can read the article on reinsurance here

After reflecting for a while, my problem may be due to the lack of knowledge from my part where the understanding of the technical term like ROE came into play as in my previous post.

Thursday, November 18, 2010

Common sense investing


I have a great discussion with one of my analyst friend regarding my analysis of stocks. He found that my analysis is too simplistic. He mentioned that I do not take into account those ROE, CAGR, and some other fancy terms that I myself never heard of.
From my opinion, those terms is for those analyst who want their report to be more professional so that those reader will think that they are knowledgeable and trustworthy. When I analysis myself, I want it to make sense to myself and not complicated it with those terms. I need to know how much cash or assets and liabilities, how much they earn compare to their price and their previous track records. The most important thing is that I need to be comfortable with their business. I even told him that I myself prefer reading analyst from some of the bloggers than those analyst reports. At least it make more sense to me. Picking stocks is hard, why complicated it?

In the meantime, I am still looking for those terms that he mentioned. Hmm…probably non-existent as he make up himself… hehe

Monday, November 8, 2010

Lottery strike for EPIC shareholders?

AZRB to sell 21.26% of EPIC for RM111.5m
Written by Joseph Chin   
Monday, 08 November 2010 18:56
KUALA LUMPUR: AHMAD ZAKI RESOURCES BHD [] (AZRB) is selling its 21.26% stake in Eastern Pacific Industrial Corporation Bhd (EPIC) for RM111.5 million cash consideration.
AZRB said on Monday, Nov 8 it was selling the stake, comprising of 35.97 million shares, to Lembaga Tabung Amanah Warisan Negeri Terengganu.
“The proposed disposal will result in an estimated gain on disposal of approximately RM11.5 million at group level based on the financial results as at June 30, 2010,” it said.
AZRB said the proceeds from the proposed disposal would be used to repay borrowings and for working capital purposes.
Source: theedgedaily.com 

The price work out to be
111.5million/35.97million = RM3.10
Current price (8th Nov 2010): RM2.09

Saturday, November 6, 2010

The Tricycle

Photo taken from tinyfarmblog.com 

To be successful in stockmarket, the understanding macroeconomic factors is very important. For a start, we should understand three key cycles that shape the market. The explaination of the three key cycles below is taken from Malaysia Investor website ( alot of excellent articles there).

Business cycle
A business cycle is essentially a recurring and fluctuating levels of economic activity that is experienced by an economy over a long duration and typically encompasses the following:
  • Recovery
    - This is where the economy starts to work its way up to better financial footing after the previous recession period
  • Expansion  
    - Here, there would be increasing growth in demand resulting from increased customer confidence
  • Peak(also known as the economic boom)
    - This is where demand surpasses the supply of goods and services in the market, unemployment is low and almost all the production capacity is fully utilised. During this period, we will see increasing inflation rate, which will later trigger central banks to raise interest rate when an economy is deemed to be overheated.
  • Contraction
    - With higher interest rate, we will start to see slow down in capital purchases and inventory build up, followed by slow down in production. This subsequently leads to increasing layoff.
    - Depending on the severity, during the contraction period, there could be just a slow down in economic activities or a recession, which is generally defined as negative economic growth for more than two consecutive quarters.
    - At the trough of this, what is typically observed are businesses restructuring and consumers clearing off debts which they accumulated earlier. After going through a consolidation period, consumers would regain their confidence and start spending. Then, the cycle begins again.
However, very much like us human beings, no two business cycles are exactly the same. Even though all cycles might go through the phases described above, the length and width of the cycles are never the same but generally, the expansion period would be more gradual and longer compare to the contraction period.
Interest rate cycle
This is a cycle that is closely related to the economic activities. A typical interest rate cycle consists of 4 stages:
  • A series of rate hikes
  • A period of stabilisation
  • A series of rate cuts
  • A period of stabilisation
Usually, when a country’s inflation rate rises due to demand-pull pressures, its central bank will raise the interest rate to fight off inflation and cool down the economy. Here, the sectors hardest hit would be banking, automotive and housing, as higher interest rates make loans more expensive. As such, consumers would cut down on purchases from these sectors resulting in the earnings of companies in these industries taking a tumble. As the effect starts to take place with the economy slowing down, the interest rate will be held steady for a while up until a stage where by the economy slow down has gone into a more serious recession. This is when central banks react to lower interest rate to boost up its country’s economic activities. After the economy recovery is in sight, the interest rates would once again, be held steady until the next cycle comes.
However, there are certain times when the above does not happen. There are instances where, even though a country’s inflation goes up high, its central bank holds on to its current interest rate as the reason for the rising inflation was more due to cost-push effect,  resulting from sharp increase in fuel price for example, rather than demand-pull pressure.
Stock market cycle
A most prominent feature of a stock market cycle is that the stock market cycle moves in tandem with the business cycle, and the former is always ahead of the latter. Why is that so? A very simple reason really - the stock market cycle reflects the overall market expectation on the business performance. Hence, when the market expects an economic boom is coming, before it actually hits, the stock market is already on its way up. The reverse happens before a recession. Therefore, if you trace a stock market cycle, you will see that its peak precedes the actual economic boom while stock market index hits the bottom before our economy goes to its trough. As such, the stock market index functions as an excellent leading indicator for the movements in a particular business cycle.
A typical stock market cycle goes through bull and bear periods. Within the bull period, it can be further classified into early bull, middle bull and late bull before reaching the peak. The same can be seen for the bear period; it consists of early bear, middle bear and late bear before hitting the bottom.

For the full articles, please go this link.

When you are not a prolific writer, what would you do? Just search around for a good article to be posted.. :)

Friday, October 29, 2010

Tough Times Never Last, But Tough People Do!

I sincerely apologize after performing David Copperfield's act for 5 months. As in any roller coaster ride, life is full for ups and downs as well but hopefully after some difficult 5 months, everything will be fine. Always reminding myself and hopefully to the readers as well that,
 'Tough Times Never Last, But Tough People Do!' - Robert Schuller
Back to my '5 months' interrupted journey to financial freedom, KLSE have been rallying to 1500. So if you are holding stocks that still stand like a rock (ex. Protasco), what would you do? 
For me, I will review back the stocks and if anything changed from the initial reason of buying it. Of course, always reviewing own stock picking is important as well as there are so much that we still need to learn. Learning is an endless journey.

For the time being, just enjoy as the bull charging.

Sunday, May 2, 2010

Protasco - Updates

Protasco just declared a single tier final dividend of 5cents per share for the financial year ended 31 December 2009 bringing the total dividends to 9 cents for year 2009. Based on the current price, the dividend yield is around 9%. A good dividend yield will act as a good buffer and more importantly, putting less stress to your emotional well being if market retrace or come under pressure.





 New updates from the HCM Engineering (Protasco's main subsidiary) website below,

 HCM Arabia to Complete Libya's TBW Project Ahead of Schedule (source: HCM website) 
HCM Arabia (HCMA) is expected to complete its Tarhona-Ben Waled (TBW) road maintenance project ahead of schedule. It wants to hand it over to Libya’s Road and Bridges Authority (RBA) before the country’s 41st Al-Fatah Revolution Anniversary.
HCMA is wholly-owned by HCM Engineering Sdn Bhd.
In an interview, HCMA Director Dr Akram Agil said it is expected to be completed in early August 2010. The Anniversary falls on 1 September. He added that this would also put the company in a favourable position to secure a new tender to expand the 88km single carriageway to a dual carriageway.
Dr Akram’s smile has an unmistakable positive signal…
First, in respect of logistics, experience, base camp, staff, asphalt and quarry, HCMA is undoubtedly entrenched there. Second, it has the biggest fleet of machinery among the road players in Libya. Last count: 9 pavers, 1 CR 2200, 5 milling machines and 29 rollers.
The TBW project started mainly using the traditional mill and pave technique. However RBA was very pleased with a 10 km-trial using the Cold In Place Recycling (CIPR) method that they asked HCMA to subsequently do another 58 km stretch using CIPR which has now been completed.
Again it was a hit!
The client then asked HCMA to introduce CIPR at another ongoing project. Thus the upgrading of 40km of the 90km dual carriageway Tripoli Gharian (TPG) road maintenance project will be carried out using the CIPR technique. HCMA provides technical assistance for this project. Its main contractor is Libyan Malaysian Company for Road and Construction (LMCRC). The latter is 51% owned by Libya’s Real Estate Investment Company (REICO) and 49% owned by HCM Ikhtisas. TPG is scheduled to finish in March 2011.  
HCMA General Manager, En Mohd Nasir Hassan said he believes that TBW Phase 2 project augurs well for HCM Engineering and the friendly relationship between Libya and Malaysia. Concurs Dr Akram, “ Libyans love Malaysia. It is a Muslim country which they have heard a lot. They like (former premier) (Tun) Dr Mahathir Mohamad. Many of them have also been to Malaysia as tourists and for medical treatments.”   
Working in a foreign land is not without challenges.
 Even so, En Nasir said HCMA workers have generally managed to overcome the test in Libya. He said, “Sandstorms, rain, occasional machine breakdown and language barrier are no obstacles when we approach them positively. Through mutual understanding, teamwork, ingenuity, discussions and negotiations with the parties involved amid sound relationship with the Libyans, we are proud to be associated with useful road projects for the benefits of both countries.”
Dr Akram also attributed the workers’ adaptability to the family-like working environment which has been inculcated in Libya. Said he, “ We have regular gatherings with the site people. They have access to top management.” Besides, the Malaysian workers love Libyan food and they are also prepared to learn Arabic on-the-job.

Sunday, April 25, 2010

Controlling the Controllable

Just a very short post.
Instead of focusing on when the market will have a correction, or will the rally last, we should focus on our own risk and expectation.
We could not control the direction of market but we can control our risk and our expectation.
It's all about Controlling the Controllable!

Tuesday, April 20, 2010

Mamee ! Double Decker, Double Decker

After scanning through the Putra Brand Awards 2010, I would like to announce my winner for Xabi Branded Stock Award 2010....

The winner is..... Mamee Double-Decker Bhd !

Reason 1 - Good Earnings vs Price

Reason 2 - Good Balance Sheet (almost zero borrowings) although not comfortable with the investment.

Reason 3 - Dividend policy of distributing 50% of net profit. (Calculate the DY yourself)
Reason 4 - Good Mission and Vision

Reason 5 - I really like their snacks and drinks... yummyyyy




Happy Investing!

Friday, April 16, 2010

Branding

A brand is a name, sign, symbol, slogan or anything that is used to identify and distinguish a specific product, service or business. (Wikipedia)

Branding is used in businesses and organizations of all sizes and types. Some companies allocate a large sum of money just for the branding purposes.
Why is it important? Because Branding separate one from their competitors.
When we (consumers) think of certain product, we will unconsciously associate it with certain brand and preference will  be definitely given to the brand.
Since branding is so important, I try to search for good businesses with good branding selling at fair price. From the below list of winners in Putra Brand Awards 2010, do we able to find it?

                                             Source: AAAA website

For full list, you can visit,
Putra Brand Awards 2010

Saturday, April 10, 2010

When you have nothing to do, read books!

As the market going higher, it is getting tougher to find undervalue stocks. For the time being, I would try to gain more knowledge by reading more books.
For those who thinks that books are expensive, you can try to visit BookXcess (Amcorp Mall). You could get at least 50% cheaper than those found in other bookstore. The only downside is that the choice is limited. Recently, they moved to a larger store which is much more comfortable and significant increase of books selection as well.
Before visiting their store, you could check those title available through their website.

                     I purchased this hardcover book for only RM24.50.

I learned the hard and expensive lesson of going to sharemarket without any knowledge. Please do not follow my footsteps. Instead of paying the expensive 'tuition' fees, you could purchase tons of books for your own knowledge.
Even if you think that those books are worthless, at least you have tons of paper to burn rather than few pieces of worthless Contract Note. :)

Monday, April 5, 2010

Palm Oil - Basic Information


When we look into the reports/news/website of palm oil plantation companies, we come across of terms like Fresh Fruit Bunch (FFB), Crude Palm Oil (CPO) and Palm Kernel (PK). They will even produce their monthly production statement for FFB, CPO and PK from the example below taken from IOI Corp website.
                                            Source: IOI Corp website

FFB, CPO and PK

                                          Source: FAO Documents

The photos above are self-explanatory of the terms FFB, CPO and PK. Basically, Palm Oil will be extracted from the mesocarp (pulp) while Palm Kernel oil will be extracted from the kernel. The difference between both types of oil is that Palm oil normally used as cooking oil, while, Palm kernel oil mainly used for soap manufacturing. The prices for both Palm Oil and Palm Kernel Oil are different as well, though they have direct correlation.
                                           Source: MPOB website
The point to note is that some companies do directly sell part of the FFB produced to third party instead of processing it themselves.

                                            Source: TDM AR2008
Hope this is informative for the readers.

Saturday, April 3, 2010

Dissecting TDM Bhd

Earnings

TDM Bhd net profit still largely depended on Plantation Division which mean their earnings still depended much on the Crude Palm Oil (CPO) price and Fresh Fruit Bunch (FFB) production. Please do not mistaken the FFB with CPO though. I will post some palm oil information in my next post.

Shareholders
                                                Source: TDM AR2008

As you can see from the list above, almost 70% of the share been tightly held by the state government ,thus, explaining the low daily volume of this share.

For all the readers, this is not a buy or sell call. Please exercise your own judgment or seek advise from your investment adviser.
I shall not be held liable if your share become like this...
or like this
                                       
Enjoy your weekend! :)

Wednesday, March 31, 2010

TDM Bhd - Dividends Don't Lie?


TDM Bhd (Current Price RM1.85) which involve in Plantation and Healthcare business declared a final dividends of 4 sen per ordinary share less 25% and 9 sen per ordinary share tax-exempted which still subject to Board approvals.
Just for information, TDM have a dividend policy statement of paying out at least 30% of its consolidated annual net profit which was approved on 12th April 2009. (you can refer to TDM website).
I am firm believer of Dividends Don’t Lie, but it should not be the only yardstick of stock selection. Understanding the business, balance sheet and their earnings should remain the main priority.

Some comments on this company by the readers for reference.

Monday, March 29, 2010

Healthcare business

Source: Data from KPJ AR2008

 Source: Data from TDM website and Q409 report


Source: TDM Q409 report
Not for comparison between both companies but to show the increase percentage of number of patients year-on-year.
I would like to add in the chart of healthcare cost in Malaysia but not able to locate it thus far. Please email to me if you have any for me to upload it.

Sunday, March 28, 2010

Meaning of Deferred Revenue

Have you come across the term 'deferred revenue' in liabilities column of a company's balance sheet?
Here is the meaning,

What Does Deferred Revenue Mean?
A liability account used to collect deposits and other cash receipts prior to the completion of the sale. 
Investopedia explains Deferred Revenue
Deferred revenue is important because it's the money a company collects before it actually delivers a product. For example, a software company sells and receives payment for a computer program before it gets delivered or installed. This doesn't get recorded as straight revenue because, if something goes wrong with the job, the money is at risk.

Source: Investopedia.com

If you have any terms that you do not understand, you can almost able to look for it in Investopedia (Great site)

Friday, March 26, 2010

KJMC and TDM Bhd

Anyone who pass through Kelana Jaya via LDP should notice that there is one community hospital situated at the side of the highway called Kelana Jaya Medical Centre (KJMC). As I am visiting my friend today, I found out that KJMC actually belongs to a Public Listed company called TDM Bhd.
A check on the website of the TDM Bhd shows that the company actually having core business in Plantation and Healthcare. A quick glance through its latest quarterly report reveals that the earning is impressive and a healthy Balance Sheet. Need some time to digest the reports and get more information on this company. Keep in view.

Thursday, March 25, 2010

Biofuel to be Mandatory?

Came across the news on biofuel from The Star yesterday. Which company will benefit from the implementation?

Mandatory sale of biofuel to start June next year

By WANI MUTHIAH

BANTING: The mandatory sale of biofuel will be implemented in the central region from June next year.
Plantation Industries and Commodities Minister Tan Sri Bernard Dompok, who said this, added that the mandatory sale would be implemented in phases beginning in Kuala Lumpur, Selangor, Putrajaya, Negri Sembilan and Malacca, and the southern, western and northern parts of Perak, Pahang and Johor.
The implementation was part of the Government’s biofuel initiative under the B5 Programme, with bio-fuel derived from blending 5% palm methyl ester with 95% diesel.
Dompok, who launched Sime Darby Bhd’s biodiesel fuel Bio-N and visited its biofuel plant in Carey Island on Wednesday, said petroleum companies had requested for some time before the implementation.
“They needed time to plan their facilities and capital expenditure,” said Dompok, adding that the Government would pay for the setting-up of biodiesel blending facilities at six petroleum depots in the central region.
The depots, which would be fitted with in-line blending facilities, would be located in Port Klang, the Klang Valley Distribution Terminal (KVDT) in Selangor, Port Dickson, Negri Sembilan and in Tangga Batu, Malacca.
An allocation of RM43.1mil would be made available for this purpose, Dompok said.
Dompok said that the price of biofuel would fluctuate according to the market price of crude palm oil and diesel.
“If there’s an increase in diesel price, it would be borne by the oil companies. They have agreed to take it on as operational expenditure,” said Dompok.
Earlier in his speech, the minister said the Government had released the National Biofuel Policy in March 2006 in line with global developments that saw nations pursuing aggressive agendas on the production and use of biofuels to reduce dependence on fossil fuels.
The policy outlined five strategic thrusts, namely the use of biofuel for transport and industry, production of biofuel for export, development of indigenous technologies and biofuels for a cleaner environment.

Tuesday, March 23, 2010

Clarification

After receiving two emails asking about stock recommendation/advice, I think I need to clarify again that I am not a professionally-trained investment adviser. I am in no position to advise anyone about any stocks. Please seek advice from your professional investment adviser.
Furthermore, there are a lot of books about stock investment that you can get from any bookstores. You could even get information through many good blogs around about stock investment.

I just wonder why would anyone asking for stock recommendation from stranger?

There will be some changes to the way I blog. I will remove the simulation portfolio as well. My mistake perhaps as I am still new to blogging.

Monday, March 22, 2010

Good Sign for KFima


When the largest shareholder accumulating the share, it is normally presume that the share is undervalue.
What do you think?

Saturday, March 20, 2010

Best Buy of 2010


One of my best buy in 2010,

Total Price: RM13 (from Pay Less Books Warehouse Sales)
PE : 0
'Book' Value: Priceless



Books are the bees which carry the quickening pollen from one to another mind.  
~James Russell Lowell

Books are the quietest and most constant of friends; they are the most accessible and wisest of counselors, and the most patient of teachers.  
~Charles W. Eliot

A man may as well expect to grow stronger by always eating as wiser by always reading.  ~Jeremy Collier

Thursday, March 18, 2010

Capitalize on India’s Infrastructure Development?


With increasing priority given to infrastructure development in India, with 20,000km road earmarked to be completed in three years, it will not be a surprise if most of  infrastructure companies' focus will be shifted to India. India, which already has one of the largest networks of road in the world, hopefully will be another market for Protasco Bhd to penetrate in.

                                           (Taken from HCM Engineering website)

 A check on the website of HCM Engineering reveals that they indeed looking forward to participate in infrastructure development in India with large delegates from the company attended the India Infrastructure Forum in London on 2nd February 2010. The ability to penetrate into India, hopefully will be another catalyst for Protasco Bhd although it might not happen so soon.

You can refer to my previous post below,

Tuesday, March 16, 2010

Berkshire Hathaway Shareholder Letters

The 2009 Berkshire Shareholder Letter had been released. As usual, a lot of wisdom from the top investor.
You can find the letter from the link below,
Berkshire Hathaway Shareholder Letters

Monday, March 15, 2010

Kumpulan Fima Bhd and Fima Corporation Bhd

                                             Source: Kumpulan Fima AR2009

Fima Corp is 60.9% owned by Kumpulan Fima Bhd ( refer above taken from Kfima AR2009).
Fima Corp meanwhile 100% owned Percetakan Keselamatan Nasional Sdn Bhd, Security Printers Sdn Bhd
and 80% Nunukan Jaya Lestari. Hence, owning Fima Corp will have more direct exposure to those companies while owning Kumpulan Fima will have exposure to those companies plus bulking and food division.

                                             Source: Fimacorp AR2009

Hope this information give a clear relationship between both companies to all readers.

Wednesday, March 10, 2010

Planters Flying today

A look on KLSE today shows that Plantation sector have a good day. Unfortunately, Kumpulan Fima is not a pure plantation play but higher palm oil price should contribute significantly to their bottomline.
Some comparison on plantation landbank of plantation giant, IOI Corp and Kumpulan Fima.
IOI Corp - 251,000Hectares
Kumpulan Fima - 50000acres (approximately 20200Hectares)
Kumpulan Fima will need to increase their landbank significantly beside increasing their yield and efficiency
to get investors aware of their involvement in palm oil plantation.
Accumulate another 5000 units averaging 0.895 for my simulation portfolio today.

Monday, March 8, 2010

Know How or Know Who

Investing in company which have the bulk of earnings contributed directly or indirectly by the Government normally being labelled as 'politically-linked' company by the investing communities. Long term concession contract, monopoly, favourable incentives are some of the features normally associated with those companies. The advantages of having investing in those company definitely would be having the most reliable customer or business that is fairly recession proof. The downside of investing in those companies obviously would be changes of the guidelines or changing of the government altogether.
Some companies would try to shake off those unfair labelling by diversifying to other businesses while some trying to proof their abilities through expanding to other countries.
Hence, as an investor, we should look into the existing businesses and the future plan of those companies to minimise the downside risk while enjoying those advantages.
Two companies posted in this blog, Kumpulan Fima and Protasco might be unfairly labelled by some investors with Kumpulan Fima through their manufacturing of securities documents and Protasco through their long term road maintenance concessions.
From my opinion, Kumpulan Fima have done very well to proof their ability by diversifying to palm oil plantation which contributing significantly to their revenue and bottomline.
Protasco, meanwhile, having good management at helm with many other well planned businesses certainly prove to certain extent .Their ability to penetrate into Middle East is definitely a big big plus!

Friday, March 5, 2010

Buying Stock or Buying Business?

Do we buy stock or do we buy business?
Every now and then, I would keep on reminding myself that my purpose of investing in stockmarket because I would like to own businesses. By keep on reminding myself, I hope I am able to control my emotion when I make a decision to buy or sell.
When you know your own weakness, find a way to curb it.

Wednesday, March 3, 2010

Success Transformers Corporation Bhd



Core Business:
-manufacturing and trading of electrical apparatus and industrial lighting
-manufacturing process equipment

Two main wholly owned sudsidiaries,
Success Electronics & Transformer Manufacturer Sdn Bhd (SETM)
SETM which established in 1980 is one of the largest low voltage transformer and industrial lighting manufacturer in Malaysia. Their line of products include full comprehensive range of low voltage transformers, automatic voltage stabiliser, energy saving lumens regulators, battery chargers and tester,floodlights, highbay and street lighting. Emphasizing on quality, fast delivery, fully equipped factory and various certification (CE mark, TUV) that separate them from their competitor. They are even involve in green technology and one of the eight authorized service providers in Malaysia Building Integrated Photovoltaic (MBIV) projects.

Seremban Engineering Sdn Bhd
Seremban Engineering mainly involve in manufacturing process equipment like pressure vessels, storage tanks, silos and heat exchangers. These process equipment normally cater for Oil & Fats industry. With more refining plant being set-up especially palm oil refining, their growth should be sustainable.

With 2009 EPS at 21.54sen, which translate to PE around 5.6 (based on price RM1.20), it seems attractive coupled with the impending listing of wholly owned Seremban Engineering.

My Portolio

I will try to update my portfolio once a month as my portfolio might not have many changes. Please note that this is only a simulation portfolio.
By starting this blog, my first intention is to record all the findings of attractive company. By doing so, it will be easier for me to refer back and enhance my understanding of particular company.
Hopefully, it will benefit all the readers as well.

Tuesday, March 2, 2010

Protasco - HCM Engineering & Kumpulan Ikram



Looking into Protasco business would not be complete without looking into Protasco's two main and wholly owned subsidiary. I manage to get some information from both subsidiary through their respective website.

HCM Engineering Sdn Bhd
HCM Engineering which incorporated in 1991, is the specialist in pavement construction and rehabilitation. Their ability to produce high quality and cost effective works that separate them from their competitors. With their constant research, they are able to develop new and more cost effective techniques. They even strive to improve their environmental performance by adopting recycling techniques to rehabilitate distressed roads and highway pavements. HCM presently registered with Construction Industry Development Board (CIDB) and Pusat Khidmat Kontraktor (PKK) with a Class A Bumiputra Contracting License.

Kumpulan Ikram Sdn Bhd
Kumpulan Ikram Sdn Bhd is in business involving education, training, geotechnical consultancy, site investigation, project management and infrastucture research&development. They are one of few organisation capable of having self-funded R&D which speaks volumes of their capability.

From the information of both subsidiary, we can see this a well managed and planned company. All their businesses complement well with each other. From churning out talents to constant research & development, it will not only benefit Protasco but the nation as well. Impressive!

Monday, March 1, 2010

Protasco Bhd




Core Business:
-Road Construction, Maintenance, Upgrading & Rehabilitation.
-Engineering Services & Consultancy
-Buildings & Specialised Construction
-Education & Training
-Trading of Construction Related Materials
-Overseas Investment & Trade

Based on information dated 1/3/2010
Current Price: RM0.995
Total EPS 2009: 14.33sen
Total Dividen 2009: 8sen
PE: 99.5/14.33 = 6.9
Dividen yield = 8%

I find this company attractive due to
-Undemanding PE at around 7
-Strong Balance sheet (refer to latest Q4 BS above)
-High dividend yield around 8 %
-Strong incuring income from 3 long term 15years concesion with government for road
maintenance (refer to AR2008)
-Expanding to Middle East (Libya & Syria)

Sunday, February 28, 2010

Kfima - Plantation Division



As plantation division is one of the fastest growing contributor to Kfima bottomline , it will be key to future earning of Kfima.
A check on the Kfima website reveal the following information of the plantation division,

Ladang Ayer Baloi/Machap - Pineapple and Palm Oil Cultivation (2200acres)
Ladang Kota Tinggi - Oil Palm Cultivation (1065acres)
Modern Farming Project -Pineapple Cultivation (300acres)
Fima TLP-Feedlot Sdn Bhd - Cattle Farming
PT Nunukan Jaya Lestari - Oil Palm Cultivation and FFB processing (49,356acres)

With the information, it is clear that future earning contribution from the plantation division will be much dictated by Palm Oil.

Friday, February 26, 2010

Review of KFima Q3 2010 Result - 2

According to the report, the better performance for 9 months period was due to manufacturing and plantation division and higher share of profit from associate company as well as one off recognition of capital gain of RM5.25 mil from the disposal of Banding Resorts.
Please note the impressive profit registered by Manufacturing and Plantation division.

Review of KFima Q3 2010 Result - 1



Current Price (24/2/2010) : RM0.86
NTA: RM1.48
Cash balances: 110mil
Total borrowings: 28mil + 47 mil = 75mil

3rd Quarter EPS: 6.88sen
Total EPS for 3 Quarters 2010: 17.65 sen
Assuming Fourth Quarter EPS to be 6 sen, PE would be 86/17.65+6 = 3.6.
Related Posts Plugin for WordPress, Blogger...