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.

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!

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.

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.

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!

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)