Thursday, 23 November 2017

This Aluminium stock that you can consider to keep

Approaching the end of the year, the Malaysian market had yet to see any excitement despite the global market reaching new high. For example, Tencent had become a company with a market capitalization of more than USD 500 billion, and the US DJIA Index had started to challenge 26,000. Despite this bullish event, Malaysian equity could be lofty now for several reason such as -

1. November is a month where most of the company will furnish their 3rd Quarter financial result.
2. As 2017 approach to the end, much of the fund will undergo a portfolio evaluation, and will start to trim equity position on company that are not really performing up to expectation.

The situation had almost been the same last year. As experience tell, it will be good now to invest into some fundamentally performing stock which are still within the valuation, and have the room to appreciate.

One of the stock that I would like to point out will be this almost forgotten "Aluminium" stock which could one day, become a next PMetal hopefully. As for me, even becoming 30% of PMetal is good enough.

This stock is no stranger for you and me i suppose, is none other than A-Rank Berhad (Arank - 7214)

As you can see, technically speaking, Arank had been trading in the range of RM 1.05 to RM 1.15 for almost the whole year of 2017. Technically speaking, anything near RM 1.05 would be a good point to accumulate on the stock. Short term wise, Arank can easily rebound towards RM 1.20 should the coming quarterly result is performing well.

One of the most important thing in order for the stock to perform is to have it's result talking directly to the investor. Attached below is the FYE 2017 result for Arank where EPS is 13.5 cents, and giving out 3.25 cents as dividend to investor.

As you can see, there isn't much good stock left in KLSE which are giving good dividend and trading at single digit PER. For the case of Arank, it is only trading at a PER x8 which is still had the room to appreciate. As this stock is suitable for long term investment, and not for flipping purposes, it is understandable on why it's PE is slightly lower.

However, I believe Arank will be trading higher soon as investor start to realize the steady performance of Arank, and also rewarding investor with dividend.

Do you think Arank is a good for investment now ? Now that is your call again.


Tuesday, 7 November 2017

Monetizing this vast land bank is good for the shareholder of this company

Despite the slowing property sentiment surrounding Malaysia, corporate exercises involving company diversifying into property development and construction in fact happen even more frequently this year.

However, most of these corporate exercise falls into company that are struggling to perform in their existing industry, and a diversification could give the company a new light of hope in order to turn the company back into the black.

While there are a few example, some notably successful example on listed companies diversifying into construction had to be Mercury Industries Berhad and Voir Holdings Berhad.

As you can see, for the case of Mercury where Dato Tiong inject his own construction firm into it, the share price appreciated much and shareholder are confident on the diversification that will bring in more benefit. That had been the same case for Voir, and shareholder view the diversification as a good.

While such are the successful case, it had me wondered if this company can also repeat such wonderful feat created like the above 2 example.

So, this company is the little known Bsl Corporation Berhad (Bslcorp - 7221).

This company had been laying on the lower side for the past few years. However, the recent month saw the company share price appreciated as the company start to turn into profit with new manufacturing contracts.

What is interesting is the latest development where Bslcorp had formed a JV with Mr Wong Sze Chien to explore on the property development and construction opportunities.

Prior to that, Mr Wong Sze Chien had also some dealing with Bslcorp through Bsl Eco on the purchase of net metering system.

Albeit the current share price which could be trading at a considerably higher PE, the share price of Bslcorp had been sustainable at the range of RM 0.60, implying that the company had greater plans ahead.

The joint venture will be able to see Bslcorp diversify their income stream and tap into the property development.

According to the latest annual report filling, Bslcorp had a vast land piece at the area of Kundang, which is near Rawang. The land spanning 1214 hectares, which is almost 3000 acre, can be suitable for township development.

It will be very wise for Bslcorp to finally tap into this resourceful land and monetize the land to reward the shareholder.

Currently, Bslcorp is having a NTA of RM 0.80 per share.

Will Bslcorp break above RM 0.65 and trade higher in the coming days after consolidating at the range of RM 0.60 for more than 6 months ? That depends on how you will see it.

Thursday, 2 November 2017

When your chance come, Just seize it without doubt!

Life is tough, but the tough gets going. Market is always tough and not for sissy investor. As the year 2017 is coming to an end, it is a good time to reevaluate how far you had gone this year. Be it in your studies, your career, or your investment. It is always good to review on everything you had done, so that you will pick up on the mistake, rectify it, and tell yourself that you will never repeat it again.

In investment, sometimes, our mistake comes when we do not believe in our instinct when the stock price is still low and not moving with any momentum. But the problem is, when it is moving with momentum, it is either without you, or you are chasing it at a very high point which will in turn put your position in a high risk situation.

While some instinct leads to miserable outcome, it should not shy us away into trying to believe our instinct again. Some say, once bitten twice shy, twice bitten and dun wanna try.

But, I am sharing with you one instinct that is proven before with result, and I want to challenge you one more time to believe this will happen - Are you with me now ?

As you had know, 1 of the landmark case involving the take over of company in the KLSE had to be Denko Industrial Corporation. Denko got a take over offer from a Singaporean company at a price of RM 0.55.

Today, Denko is trading at a range of RM 1.40 as more corporate exercise took place including asset injection and private placement at a higher price as well.

If you had acted upon the time where this take over offer is announced, then you would had see your investment double up easily.

Now, Denko is a past tense. Nothing can be done if you had missed that opportunity. Denko is trading at RM 1.4x now, and no use to harp over things that had become something.

But, today I am giving you another chance of your lifetime - Once again.

This counter got a take over offer from it's major shareholder at a price of RM 0.785. This company is Yi-Lai Berhad (Yilai - 5048).

Talking about Yilai, I am telling you that this company is no mistress material at all, because they are tile manufacturer.

But, 3 years ago, this exciting company actually was bought in from it's major shareholder at a stunning price of RM 1.30. According to filing, Hampton Capital Ltd bought in 31.12% stake from the previous owner at RM 1.30 some where in May 2014. The director behind Hampton Capital are Aaron Tan Jian Hong and Wendy Kang.

Firstly, the person acting in concert had breached 33% and triggered mandatory general offer, where the offer is at RM 0.785. As you can see, this is an offer, and is not subject to any acceptance if any shareholder do not agree with the price. Yilai will be continue to be listed in the KLSE as long as the acceptance of offer is less than 75% (which is very likely to happen).

Secondly, the NTA of the company is actually sitting at RM 1.40, notwithstanding some plot of land that are not revalued.

Thirdly, Yilai is actually a company without any borrowings. That means, it's balance sheet can be stretched with new projects or new business.

Now Yilai is actually trading around the range of 80 cents, which is not far away from it's take over offer price of RM 0.785.

As you can see in many previous example of take over offer, I can tell you that there is high possibility that Yilai will be surging upwards very soon due to
1. Major shareholder bought in at RM 1.30
2. NTA is RM 1.40

Yilai will be properly valued at the price range of RM 1.50. Moreover with the x 2 take over factor, Yilai can be looking at RM 1.57 in the future.

Are you going to seize this chance with conviction ? I had done it, the ball is at your feet now.

See you above RM 1.00 in no time.