Thursday, 10 August 2017

Superman downed in rubble, but Supermax will grow with rubber

You can call me thick faced hard sell on Supermax. So, I had to tell you - Yes I am indeed thick face hard selling on Supermax, but with a condition - When Supermax is currently trading at the price of RM 1.90.

I recall those hard time during last year (2016) when one of the stock that I had been recommending is not moving despite displaying convincingly good results with growth. That stock was Arank. I remember recommending Arank when it is just trading at a mere 70 cents region, and the stock continue to stay stubborn, not until the sentiment starts to recover, and Arank starts to get it's momentum and now Arank is trading at the range of RM 1.10.

As you can see, investing during tough times takes a lot of patience in order to see your fruits blossom. But firstly, the fruit that you choose must be healthy and not infested with worms.

Now come back to Supermax.

Talking on business fundamental, Supermax is definitely a fundamentally strong company. Given consistent dividend and showing growth from year to year basis.

Despite that, Supermax is now trading at an all time low position, with share price going far back into the 2013 price range. Yes, you can argue that this company could be shun by investor due to some governance issue such as insider trading and also being accidentally involved in some political talks. But those are past and I think potential investor should not punish themselves by losing out this opportunity by clinging on the past issue. After all, past is past, and what we are going to do in the present world will determine the future.

Now, I have to tell you that the glove industry actually do not depend largely on medicine industry alone. In fact, manufacturing sector such as semiconductor industry are consuming high amount of gloves due to the operation in the cleanroom environment.

With the thriving business in the semiconductor industry, the demand for gloves usage is continue to be on the rise. Healthcare also continue to see consistent demand, while seasonal flu in various countries will push demand higher for a certain period.

Hartalega, being one of the leading gloves manufacturer in the world had recently reported a 71% increase in net profit.

I believe this surge of revenue is industry wide effect, while one of the leading factor will be the stronger USD.

For the period of Jan to Mar 2017, Supermax had a total revenue of RM 308 million. For the same comparative quarter, Hartalega had RM 527 million. Hartalega latest financial result Apr - June 2017 shown RM 601 million in revenue.

Should this be an industry wide benefit, what we can assume is that Supermax revenue could be able to linger at the range of RM 350 million, and probably looking to see EPS around 3.5 cents.

Based on a projection of annual EPS at 12.72 cents and trading at an industry PE of x 20, Supermax valuation can be looking at RM 2.50

At the current price below RM 1.90, Supermax is deem undervalued from an industry perspective.

Will Supermax wake up soon ? I hope before he wakes up, you are on boat for the ride.

Tuesday, 8 August 2017

This Underdog Can Rise Up Again !!

The latest catch in the international sports arena might have you seeing Conor McGregor taking on undefeated Champion Floyd Mayweather in the coming 23rd August highly anticipated boxing match.

On the local side, you will be seeing Deputy Prime Minister Dato Zahid vs Former Premier Tun Mahathir. Who is the Conor Mcgregor and who is the Floyd Mayweather of Malaysia, I don't know, I will let you decide.. Haha

These are big news, but somehow these kind of news can hardly enable you to profit from an opportunity resulting from such event.

Let me show you another piece of big news, which I think might be able to benefit you.

As usual, big news is usually bad news, that is because bad news sell way better than good news does. It is a fact, psychological proven in fact. Bad news always send shivers down the reader mind, thus motivates them to make frantic decisions. For example, when the market drop and the media label them as blackest day of the world - You will get nervous, and the tendency to throw / cut loss of your holding is very high. Delusional. The good part of it ? Those who know what is happening will brave themselves and take position.

Of course, now I am not telling you that the market is going to crash and fall and so on. Honestly, I don't know. It might happen, but I don't know when. But for now, what I know is that there is a massive flu happening in Asia which had stricken Hong Kong badly.

So how bad can the flu be ?

According to official source, the number of recorded flu cases in 2017 is catching towards 20,000, and this is just up to July 22. In comparison to 2016, that is just 21.2k for the whole of that year. I can tell you that flu virus are getting bad to worst, and they are evolving stronger than ever to infest and killing people silently. News sources had it that the flu outbreak had taken a toll of more than 300 lives in Hong Kong, majority of them are elderly citizen and kids. As such, hospital are full to the brim for such moment.

Of course, this is bad news for mankind. There is nothing much we can do about, except to make sure that we have enough rest and beef up our own resistance. But as such event happen, the gloves industry will always blossom.

As you can see here,big player such as Topgloves, Hartalega and Kossan had seen share price trending upwards on this event.

Beside this, smaller player such as Careplus and Comfort are also seeing similar effects

So, I would like to conclude that such event does have huge influence on share price of gloves industry. Because of this, I would like to point out to 1 underdog for this case - Supermax.

I know Supermax might be tainted with some controversy earlier, but that doesn't mean a bad horse will always be a bad horse for life. What if this bad horse can become the black horse for this case ?

Here, I will not talk much on financial statements and equivalents topic, but to point out that Supermax indeed had fallen from a great height to rest at the rock bottom stage now, where a potential break out is very possible. With Kossan, Hartalega and Topglov trending upwards and trading at high PE, Supermax can be an explosive candidate to play catch up now.

The answer for the question now lies in the control of your hand. Can Supermax break the curse of the pearl and rise back above the waters ?

Monday, 31 July 2017

Good opportunity is nothing without action. This opportunity can make you a hero if you believe in it

Talk about DRB-Hicom selling off 49.9% stake to Geely of China, I would assume that this event might still appear fresh in our mind, and also resemble one of the hot market topic in the street. Back then, if you are still in the market, you would know that Proton Holdings Berhad is still listed in the KLSE 5 to 6 years ago. That was not until DRB privatized Proton at a price of RM 5.50 a share, which cost them a huge RM 1.29 billion bomb.

Today, I would like to teach you how to look at the event of the privatization of Proton by DRB back then from November 2011 onward.

Pointing on the privatization of Proton by DRB, I would say that many of us see this as just another corporate exercise of merger and acquisition between companies in order to create synergy, but fail to interpret the happening of the event in order to turn them into trading / investing advantages. Of course, everyone is not born smart into this world and knowing everything. The universe just doesn't work this way. As for the capital market, I have to tell you that the ability to predict and interpret based on given facts from media along with market participation plays an important role in good decision making to make money out of the market.

One of the main point that you need to know is that major corporate exercise that involves core asset disposal doesn't happen frequently in a company. Such an event, you can either do it out right and complete it 1 time, or play around the news for a few times before concluding the sales. Both are pointing towards 1 same objective - disposal of the asset, but different method yield a different manner. One good example will be Gpacket. If you are very found of Gpacket, you would know that Gpacket had been in the news for at least 3 years before the real deal is concluded at TM. That is at least is share price had been speculated for at least a few rounds, which is good if you know how to play the game.

For the case of Proton, the same will apply. But since this is an almost 6 years ago event, let me bring you back to see what happened. I will teach you how to look at event such as this.

As you can see, the media first toyed on the news that Proton is heading for a management buy out by firms such as Naza, Sime or Drb in the market at November 2011. Proton had surged from a lowly price range of RM 2.60 to a high of RM 3.50 before denial of such news came to subdue the price surge.

However, the news subsequently become more solid as time is running out and Khazanah looks set to divest all of the 42.7% stake. Market returned in speculating the front runner, and Proton share price continue surging to almost RM 5.00 in December 2011.

To cut the story short, DRB is the concluded winner at RM 5.50 a share for a General Offer for all Proton minorities shareholder after buying all of Khazanah stake.

As you can see, one of the major characteristic is that Proton share price did not falter much despite the news of denial. Subsequently, the news continue to brew with more interest and it's share price went higher.

So, if we implement the historical lesson of Proton into Nationwide, you might be interested to see that Nationwide may bear the same traits with Proton. 

According to the movement of share price, Nationwide consolidated at a higher price range, and volume consolidated, forming a mirroring triangle. This is despite the news that Century and Nationwide issue a denial.

What do I see here ?

From my perspective, Nationwide could be at it's stage 1, just like how Proton begins. What we know is that Century will be having their multi-storey warehouse ready by 1H of 2018. However, plans are intact for Century to start parcel delivery as soon as 4Q 2017. If you tell me how to get this fleet as fast as possible, the most possible answer will only lies at Nationwide.

At the current scenario, Century is lacking of a fleet of transport to penetrate into the parcel delivery industry. On the other hand, Nationwide is lacking of a strategic partnership that can provide them with consistent supply of delivery order and better management process in order to fine tune the operation.

The logistic sector had been firming up with M&A, and the possibilities of Century teaming up with Nationwide is just as good as synergy formula of 2+2 = 5.

End note, I had shown you how Proton had moved up with it's M&A with DRB in 2011. Now, it is your choice to either be part of the show, or just to see the show. This could be your last chance before Nationwide will shoot up higher as news firm up later. As mentioned previous, I had bet my name and reputation into Nationwide to have a M&A exercise very soon. Now, time will only tell how it will goes.

Thursday, 27 July 2017

Small doesn't means weak. This company can pack a powerful punch.

The current equity market had been riding on tough wave with diminishing volume after a long bull run since the start of the year 2017. Industry involving with export, semiconductor and construction had been enjoying a good season as valuation continue to soar.

Selection of stock continue to be a challenge. As for me, I always like to poach on stock that are still sleeping, or had consolidated for a long time and had a good number of reason to see the stock to rise in the future. For this reason, I like to keep an look out on stock that have corporate exercise such as diversification, M&A or potential coming bonus issue.

Malaysia being a leading emerging market country in the South East Asia region had saw property and construction sector enjoying a good boom for the past 4 years. As a result of this, a lot of company are diversifying into the property development sector. One of the reason for this action is to unlock the underlying asset value (land value) through development purposes.

In fact, as of lately, Boon Koon had also made movement to diversify into property development. Another example is Kobay Technology from Penang which had also diversify into property development.

Now, I am interested to present to you this smallish company which is going on the same path like some other had done, diversifying into property development and unlocking the value of the land asset that they are holding from the past. This company is Sanbumi Holdings Berhad (Sanbumi - 9113).

To recap back, Sanbumi had made public on it's intention to diversify into the property sector back on July 2015. It's foray into the property development will be seeing a mixed development project at the prime area of Jalan Alma, Bukit Mertajam.

Location wise, it is not too bad as it is situated in between of the 2 bridges linking to Georgetown.

The project will be developed by Sanbumi Sawmill Sdn. Bhd. (subsidiary of Sambumi Holdings Berhad). The location is strategically located on a 1.62 acres land along Jalan Rozhan, about 1km away from AEON Mall and Tesco Stores.

According to known sources, the project is slated for a 42-storey commercial tower, offering a mix of shop offices and serviced residence. There will be two residential towers with 260 units in each tower:
  • Level 1: Retail shops (18 units)
  • Level 2: Shop offices (16 units)
  • Level 3-8: Multi-level car parking
  • Level 9: Facilities floor
  • Level 10-42: Serviced residence

This will be Sanbumi first maiden project in its foray into the property development. The GDV is estimated to be at RM 350 million at the current market price.

You may wonder why this company caught my interest.

Here is how I will see it in my own angle. According to the latest financial report, Sanbumi do not have much debt, and they have a strong cash holding after the fund raising exercise from private placement. This development will be able to see great profit due to the absence of the cost of acquiring land at the current market value. Assuming a development cost of RM 250 million for a span of 5 years, that will be able to see a gross profit of RM 20 million a year for the next 5 years into Sanbumi income statement. Of course, all these are assumption from my own view, and you should go and do your own study in it.

According to related sources, Sanbumi had already obtain the approval for the construction. Prior to that, their project also had good response from expression of interest from interested purchaser.

The technical reading of Sanbumi had also express substantial interest in the development of the company in diversifying into property development. As you can see from the chart, Sanbumi had been consolidating in a good manner at the range of RM 0.26.

I believe that on upon the official launching of it's first maiden property development project, Sanbumi share price will see good interest pouring in. If you see that happening, locking in a position now will be better than chasing for a position later.

As the saying goes, chance sometimes, only come once. Will this be a good chance? You decide on it.

Wednesday, 19 July 2017

This Pekan Company can really fry up when time's come

"Market theme" is a proven key factor that will influence the share market. When "market theme" start to play in, companies that falls within that theme will see heavy trading interest, or in direct - speculation. Usually, this kind of market theme movement will disregard the underlying company fundamental and past financial records.

For example, if FCPO contract suddenly shot up to more than RM 3000, the next thing you will see is that plantation company will be speculated upwards. Or when the media hype up the news of USD getting stronger against the local MYR, then you will see certain sector like the furniture and gloves sector being speculated upwards.

There is no right or wrong is such speculation. However, one of the main concern is - whether you are in it before the market theme kicks in, or you are only starting to go into it when the market theme already kicked in. Of course, both will yield very different sets of result, and the early birds, for this case, always get the best money.

Earlier this year, there are lots of market theme. Starting from Lim Kang Hoo theme (IWCITY and Ekovest), Jack Ma theme, packaging and logistic theme, then e-commerce, then banking and so on. All these are good if you can forecast it coming, and the main thing moving forward is to forecast which theme is coming next.

As for this, allow me to tell you that our nation will be having the next big event - 14th General Election. Since we did not really experience the election frenzy yet, I think it will be a good to look out for potential targets now.

This time around, I will like to point at some hot election seats. Since we are saying hot hot seats, then Pekan seat should be hot enough, right ? So what is happening over at Pekan ?

Lately, there was a company by the name of Merge Energy Berhad (Merge) which was awarded a RM 158 million construction project in Pekan in March.

Subsequently, Merge went on rampaging upwards as per shown in the chart.

Now, I think this company which is also involved in intensive project in Pekan should not be missed, especially when it is still at it's low level now. Of course, this company is BHS Industries Berhad (BHS - 7241)

As you can see, the technical chart highlights that BHS is currently resting at it's long term support line, which is at the range of RM 0.40. Moreover, it had also started to broke away from it's mid-term down trend line, highlighted in red color. Technically speaking, BHS can be viewed as bullish biased, with good upward potential as volume kicks in.

So what does BHS got to do with election ?

Firstly, BHS is planning a mega township in Pekan, dubbed as GTP (Green Technology Park), whereby energy supplied is created from renewable energy, which used biomass energy from waste products of palm oil plantation, such as empty fruit bunches. Secondly, this GTP will also be housing several factory such as paper mill, corrugated box manufacturing as well as tissue paper and box. The total GDV will be more approx RM 2 billion.

While the above plans are parts of the diversification plan, the original business of BHS is actually printing and publishing. Now with the new printing factory ready, BHS is expecting to kick in more revenue.
Excerpt taken from the 3rd quarter financial result of BHS also highlight that the group will be expect to deliver higher sales in the 4th quarter.

As for me, I caught interest in the line highlighted in green where it says - "the government print order which were absent in previous 2 years have now been revived and tenders were called."

I will interpret it as because the general election is drawing very near, hence the demand of print media will rise. Aside from the electronic media, the need of printing such as political magazine, leaflet, and other print media is still an important source for spread of information. For this, I can be expecting millions being poured into it, which will be very beneficial for BHS.

Now BHS can be still considered as a sleeping giant, consolidating at the range of RM 0.40. Will it get awaken by a in the later stage by some election theme speculation ? I don't know, but if it does, make sure you are in it before the big run.

Thursday, 6 July 2017

Gdex is a successful story, but missing this company will be your successful sorry!

In life, when you want to be respected, it is not given just like this, you have to earn it. However, it is the process of earning it - many quit halfway, and thus, did not get the respect from others.

For the same comparison and applying this to the share market, I have to tell you that everyone that started to venture into the share market do not become an instant market genius in a short period of time, and the same had to be applied to me as well.

Many see me as a big master sifu in the Malaysian share market, but is that really who I am ?

There are 3 kind of sifu. The first kind is very simple, and can be defined as - When you are right, you are sifu, when you are wrong, then you will instantly become another piece of seafood. The fine line of become sifu and seafood, is just a thread away.

The second kind of sifu is made after having track record of a long term consistent result. This is more of a real sifu, which can juggle with facts, and very patiently prey on the target. This kind of sifu usually eyes upon fundamental stock only, hence cutting off the large excitement of sitting the roller coaster of the market, and the feeling of switching stock in a frequent manner.

The third kind of sifu is a more complex kind of sifu. Beside having the traits of the second kind of sifu, he will also dabble in non fundamental stock and turnaround stock, and can uncover real gems from dirt. The important element to be this kind of sifu is by having a strong sense of prediction of the particular company, both in corporate action, and also share price movement.

As for me - I am Bonescythe, and I will let you choose which kind of sifu I am. I am totally alright to be called seafood, at least I know very well that if I am a seafood, I will by far taste better than many other seafood that is in the cooking pot. Hahaha

But if I am your highly respect sifu, today, I have to tell you that I am going to put my respectable name in the ring once again, and make a gamble on my name in this one corporate event that is happening in KLSE.

As you know, one of the latest most happening event in the Malaysian market have to be in the logistic/warehousing arena. In fact, the battle had just began to tense up lately as heavyweight player continue to get arm up in order to secure and increase their market share.

For this reason, CJ Korea had came all the way from Korea, and hitch on Century Logistic Holdings Berhad by purchasing 31.44% of controlling stake in Century at a price tag of RM 175 million for it's expansion in the South East Asia region. RM 175 million might sound big to you, but that could just be a pie for CJ Korea.

One of the attractive reason is that Century are having the strategic infrastructure to sync on with CJ Korea objectives. That is the strategic multi storey warehouse from Century, and the intention of CJ Korea to expand into parcel delivery in Malaysia.

So, the latest new is that Century is planning to acquire a mid size logistic firm with parcel delivery with presence in major town. Wow, this is a big big news, and missing it could be very expensive.

To put it in a more objective manner, there will be 2 main question here. The first question is which is the most potential target ? And secondly, how much will CJ Korea / Century be willing to splash in for that.

For that, I am willing to put my name to bet on this - Century will be heading for Nationwide Express Holdings Berhad (Natwide - 9806). For instant, Gdex will be out of the list, because Gdex is being cornered by bunch of Alibaba related investor, and the valuation is too high now, which is probably trading at PER x 150, x10 the NTA value. There will be no other better candidate other than Natwide. Natwide also met most of the important requirement by Century, which is having presence in most of the major town.

Now, how much is Century willing to fork out for Nationwide ?

According to the latest event in the logistic arena, Tasco Berhad had bought Gold Cold Transport Sdn Bhd for RM 186 million. Now that is quite a huge sum I can tell you. And for this, I can surely tell you that the money that Century is going to fork out will be definitely in the hundreds of million.

Now, here comes my prediction.

In my opinion, I think Century will not be privatizing Natwide, however, the deal will be good enough to see a mandatory take over offer being offered to all the minority shareholder. This is because the best possible stake sell out will be BHR Enterprise Sdn Bhd, with 54.78% stake in Natwide. The is very similar to what CJ Korea did when they came into Century, which is to take a controlling stake in the company without needing to privatize it. Therefore, there is a very high chance that this technique will be repeated in Natwide.

Now the tricky part is to know how much Century offer to BHR Enterprise Sdn Bhd until it is so sweet not to reject the deal. Honestly, I had no idea, but I can come out with the best possible scenario for comparison based on revenue and market capitalization with Gdex.

As you can see, Gdex is currently having a quarterly revenue of approximate RM 60 million, while Natwide is running at RM 20 million, which is one third of the revenue size. If we use this simple comparison, Natwide should command a market capitalization of RM 1 billion, right? As you can see, Gdex earning is so tiny, hence trading at a PER x 150 is almost as good as nothing. If Century director is able to overhaul Natwide's  whole operation, and putting it back into the black, Natwide is just as good as a Gdex in making, just smaller by two third in Gdex revenue scale.

After seeing the potential, so I will put it simple. Let's say Century will be throwing RM 100 million for 54.78% stake, ok ? Too high ? Ok, we discount 30% from RM 100 million, we talk about RM 70 million for 54.78% stake (65,863,090 shares), this will work out at around RM 1.06 per share, so let's discount another 6%, and make it a RM 1.00 offer. Now fair and good? Discount and discount many times already.

Since the purchase involve more than 33%, then it will be mandatory to offer a take over exercise to all at the same price, RM 1.00. But, if Gdex can be hype up until PER x 150, why would Century want to privatize Natwide ? Might as well let it float like a Cadillac and put up a good fight with Gdex.

If that comes true, RM 1.00 take over offer will see the share price becoming RM 2.00 based on my theory.

Wow, amazing amazing amazing. I must be dreaming in deep blue sea.

I remember the time when I recommended Rex at RM 1.83, some naysayer come cursing me and as me to go fxxx myself when the share when to RM 2.00 and fell down. Today Rex is standing at RM 2.30, with an occasion hitting RM 2.38 ! Now, I am taking this opportunity to send back those word you gave me.. Go xxxx youself. And for those who ask me to xxxx myself at Natwide when I first mentioned at 30th June in a forum, you gotta watch and see who will have the last laugh!!!

Friday, 30 June 2017

This company will be doing big things in China

The Malaysian market continue to remain strong amidst the continuous prepping of the market due to domestic influence such as incoming general election that is expected to happen in the next 7 months. Such an event continue see foreign funds coming into the local market in anticipation that the local government will be dishing out more infrastructure projects to GLC linked conglomerate.

Analyst are looking at month of Nov-Dec if the election is going to happen this year. This is partially due to ann important event happening in October 2017, where China's President Xi JinPing will visit Malaysia to witness the official opening of Xiamen University's Malaysian campus in Bandar Sunsuria, Sepang. For this reason, it is quite reasonable for you to believe that the local market will continue to be supported until then.

While Malaysia continue to see big investment from China in some core infrastructural area, it is also important to note that some Malaysian counterparts too have big influential development in China. If you still do not know what are the big developments in China that is owned by Malaysian businessman, then you should open up your eyes once again to know this company potential involvement in China and it's big development in the tourism sector.

So this company, is none other than the sensational hit of 2017 - Dataprep.

By now, I will not go about what is Dataprep doing, what will Dataprep will doing and where will it be doing. I think I had gave out more than enough data concerning Dataprep, and the rest is up to you to do your own reading and research.

All I can tell you that at the crucial point where I had identify and share with you about Dataprep, it is lingering at a lowly 12 cents. Yes!!! It is just a freaking 12 cents!!! And I continue to inform interested investor to take position at anything below 30 cents back then.

Lo and behold, I don't know what happened to Dataprep until it hit a high of 70 cents, and I have to tell you that I had nothing to do with that - seriously. But one of the thing I did is, I did not ask anyone to run towards Dataprep and grab it when it is flying too overly high at that point of time. I only recall me telling you about the potential and goodness of Dataprep when it is 12 cents, 20 cents, and the last being 30 cents.

Now, as the price of Dataprep consolidate, I am here again to share with you that this might be a good price to take position in Dataprep.

Today, I will talk more about technical charting of Dataprep. Here, I will look into 4 important points, - a long term support line
- a mid/short term support line
- a resistant line
- consolidation in terms of price and volume.

The red color line is a long term support line. I had drawn it from the start, touching the base of the whole up trending chart. Today is the defining moment, where the long term support line had finally touch another upper base of the price chart. If the uptrend continue to be intact, then Dataprep will be continue to trend upwards, and not violating the long term support line.

Now, I will support my chart with another mid/short term support line, which is highlighted in blue. As you can see, the blue line is formed at the higher region, after the major spike. This mid term support is important to show that the entity holding substantial stake is still in the game, and not selling out.

Then, as I already form a good judgment on the support base of Dataprep, looking for a good entry into Dataprep will have to see the intersection of a resistant line and a support line, which I had highlighted in Green Color. The intersection point resemble the best potential point of entry into Dataprep as there will be heavy interest in technical traders looking for big rebounds when there is a strong breakout.

Finally, in order to confirm your decision, it is important to know if the consolidation is ripe or not. A good consolidation will see a price holding at a certain price level without much volume being transacted. For this case, Dataprep at the price range of RM 0.40 is proven to be well consolidated technically.

Putting all of this fantastic 4 factor together, I could be able to sum up that Dataprep might be in a good position for you to invest, trade, or increase your stake. As you see, I am not someone that will ask people to buy when stock are flying up, but I will ask you to take note when the stock is sleeping, consolidated with low volume but still with greater potential. For this case of Dataprep, I will let you decide on your course again.

As you can see, despite the flat financial performance by Dataprep in the latest quarterly result, the company share price had been holding good. If by any chances Xi Jinping will touch on Genting Secret Garden during his visit in October 2017 at the official opening of Xiamen University, then you will know what is going to happen.

For this case, like what Bono sings - With or Without You.

Friday, 16 June 2017

Special Cash Dividend Never Fail

For some, investing is an art; for some, investing is a game of luck; for some, investing is just a gamble. As for me, investing is about hard work - putting away leisure time, screening charts manually, reading through all the newspaper from local, global, social, sports to business news.

Of course, there are many more component to form a decision to invest, and emotion is one of them. Human are very vulnerable to emotional swings, and that is why stock prices have to swing up and down, so that human emotions will follow along the swinging of going up and down as well. It is very easy to say to buy at low, and sell at high. But at practical, it is not as easy as you think.

Today I am not going to talk on the effects of emotion towards a decision on share trading. But I would like to show you how a normal individual can trade the stock market without having any super natural intelligence, or being a super investor, or super logical thinking.

If you are hardworking enough to look for company that is going to pay special dividend (usually after some asset sale, or after capital reduction, or some special one off big dividend), you will notice that upon the approval of such dividend, the company share price will definitely go up.

Take for example, last year Sapura Resources had disposed off it's entire 49% stake of APIIT education group. The deal was announced in March 2016, and the dividend is approved in September 2016. Prior to the announcement of the dividend, the share gap up accordingly to reflect the cash payment back to the share holder.

So in this case, you can see that buying in at a period of time where the dividend is going to approve might be advantage for you because you the price had probably found it's balance, hence lesser fluctuation.

The second case I am going to present to you is the case of MAA. If you are aware, MAA had sold it's takaful arm to Zurich Insurance in 30 November 2015. Approximate 6 months later, MAA announce a 35 cents special dividend to be paid back to shareholder prior to the sale. As you can see from the chart, from the sale to the approval of dividend, the share price had been trending up strongly.

The third case is about Alcom. This stock had been suffering for the past 2 - 3 years, but the company had gone back into the black as aluminium demand shifted upwards. Despite that, the company restructure capital and pay back shareholder a hefty 20.5 cents. Upon this announcement, the share price continue to rocket upwards.

As you can see, if you are hardworking and looking at chart manually, you will know what is happening and most importantly why it is happening this way. You will not get this if you are too reliant on robotic screener.

Of the 3 example, 2 of them are related to asset disposal, while 1 is capital restructure and pay back to shareholder. All of them carry the same trait - a big fat dividend in the kind of special dividend, and subsequently, the share price gap up upon the confirmation of the special dividend payment.

So, as historical result prove this concept to be right working, it is back to an individual hard work in order to get the company which such event happening, and most importantly, is to board in before the confirmation of such special dividend being declared official.

Now, your problem is, you are too tied up, no time to scan manually, not to say search up and down the internet for such news. If I will to give you this news, of course, you have to decide on your own again.

So this company is nothing than a bleeding company, but had concluded the sale of it's infrastructure arm, netting in RM 380 million cash. This company is - Silk Holdings Berhad.

As you can see, the onus here is that the company will be using RM 70 million from the sale proceed to declare a 10 cents dividend for each shareholder. For a share trading at the range of 50 cents, that will means a 20% return. Or to put it in other words, this special dividend is akin to the company giving you 5% return a year for 4 year in a very instant manner. Sekali gus kaw tim 20% for you.

According to the technical chart, Silk had also broken away from the short term down trend line after consolidating at the range of RM 0.48. This is amidst the coming EGM that will be happening on 21st June which will determining the  approval of the special dividend amounting to 10 cents per share. Should the EGM approved the special dividend of 10 cents per share, where will Silk be at that time? 55 cents ? 60 cents ? I don't know, but all I know is that if you buy in before any solid announcement of the dividend, you will stand a better chance among all the others who bought it after the announcement.

In conclusion, I am educating you on how to look at opportunity in the share market using some solid examples and case studies. In the future, if such case arouse again, be very sure that you are the first one to notify it and get your position ready.


Wednesday, 7 June 2017

If you suck in stock investing, read this to understand why

Today, I am going to share with you another one of my secret on how I do my market analysis. As you would know, the market had 2 general analysis - Fundamental Analysis and Technical Analysis. But as for me, I always go beyond Fundamental and Technical Analysis, because I believe that in order to out perform the market, there are much more stuff required to learn. To me, one of the most important factor is the study of Psychological effect towards human being in reacting to news and it's underlying intention.

As you would see, if you are able to crack this great code, you will definitely be at the upper hand because you are able to analyze a market event different from the others, which is the herd.

One of my biggest reveal in the market is being the "Secret behind the Take Over Offers". You could had read a lot of investment journal, investment and trading courses, Warren Buffet books, Peter Jack or Jill trading strategy and etc... But I have to tell you that you will be in no where at any corner of the world that gave you a free education on cracking the secret behind take over offers.

If you had been reading my article and journal word by word, you will notice that I had teach you how a Take Over Offer without intention of delisting the company will result in the company share price doubling up from the take over price. Not even any prominent investor, trader, guru in the world would had taught you this, but only me, and giving you for free.

Plenty of example of take over offer, and share price doubling up. For instant, Euro, Denko, Halex, Gwplast, Iwcity, Alcom. You can check them out on your own as your own research. Of course, when REX (take over RM 1.65) goes to RM 3.30 in the coming future, then my basket will add in another proof of event.

Today, I am going to release another secret weapon of my analysis to you - FOR FREE AGAIN!!! But if you think I am putting up another BS talk, and thinking that Free stuff is never good stuff, then for goodness sake, you can close the browser and don't let me poison your mind. I have to tell you my poison is highly toxic, and will poison your investment mind forever. Haha..

Now, I am going to teach you, how to see beyond a bad news, which is actually a good news. As usual, I will give you a good example of this case for your understanding.

I am going to study the case of Masteel with you.

As you can see, during the year 2015, Masteel had a shocking event that put great fear on investor. That event is a delay in submission of financial report, which had resulted in the counter being suspended for 3 months. As a company running more than 10 years, suddenly slapped with trading suspension because of delay in submission of financial report ??? Weird, funny?  I don't know.

Honestly, there hasn't been much change in the fundamental of the company, but the effect of the counter being suspended for 3 mths trading due to delay in submission of financial report is loud enough a story to shake up the weak investor. Adding salt into wound, the period of 2015 to 2016 is the year where Malaysian equity market are suffering, especially from weakening exchange rate and exit of foreign funds. The share price drop 60%, from 90 cents to trade at 35 cents.

But now, 2 years after this event, Masteel is enjoying windfall from selling steel bar when MITI implemented some trade protection on certain steel products which had greatly benefited them.

Now, let's put it this way to think. If there is no such suspension, I would reckon that Masteel will definitely not be trading at 35 cents region. At most, it would be lingering at the range of 80 cents. As you can see, comparing the percentage of rise from 80 cents to the current RM 1.20, and 35 cents to the current RM 1.20,  you know how to do the math.

Alright, but I am not painting a picture that the management deliberately make this happen by intention. Honestly, I do not know, and also don't want to know. But as far as I know, they delay, they got suspended, they pay the fine or penalty and do the require submission, and things are done. All I can say is, they are playing within the rules of the playground. Not white nor black, it is grey.

As of now, you might be able to put up an argument - what are some other underlying factor that I can back up on seeing Masteel being able to perform better in the future ? Of course, I had to tell you that this one really do not come easy. If you had been following the steel sector closely, you would know that the local steel industry player had been actively seeking for protection from imports since 2014. If this is a standalone news, there might not be any click. But if you would put this news together with the temporary suspension order, now there might be a click.

So now, did you get it ?

If you don't get it, then go to sleep now, wake up later and read again, repeat until you understand.

With the above case as reference, now I am going to show you one potential case.

This is the case of Eden Inc Berhad (Eden - 7471)

I know you might not even know such company even exist. So, I will give you a brief background of what Eden is doing. Basically, this company is the holding company for Garden of Eden, where you can find a tree that grows apple. As this mysterious apple is so tempting, entry ticket to the garden of Eden is selling at unknown prices - And I will cut the crap now. Haha...

Now jokes aside. Eden is a company that had been bleeding cash for many years. Despite that, the bleeding got worst when their power plant unit got flooded during a wet season in 2014. Not only incurring lost of revenue, it comes with additional cost for repair and maintenance as well. You might be asking, so how bad is it ?

In short, it is so bad that the external auditor from Ernst & Young had issued a qualified opinion that the company had material uncertainty related to going concern.

Ah ? What material uncertainty ? What going concern ? Alright, unless you have accounting background, you will not understand what is going concern. As for me with "rojak" background, I am going to explain to you in a very simple manner.

Going concern means - Can the company continue to operate properly for a period of time, say the next 6 mths or 12 mths. If a company keep losing money, it will reach to a stage where there is no more money in the bank, and no cash flow, and everything stuck and boom and bankrupt.

So, on 31st May 2017, Eden is slapped with going concern issue! Waah..... If it get worst, default in banks payment, then it can potentially slip into Pn17, and that is a big big warning.

So, should a share price drop when there are potential of slipping into Pn17 ? Obviously, a human with rational mind will think that manner. But according to the chart, Eden had broke away from a long term down trend, and the down trend resistant line had become a temporary support line for Eden now. Now, this is very interesting.

For a company rich in asset, if got cash flow issue, the first thing to do is to dispose off the asset and convert into liquid cash. You do not need a PhD to teach you this step.

So what kind of asset that Eden really have ?

Of course, if you browse through the list, the highest possibly is definitely the investment land at Gebeng, Pahang. First the land is vacant, secondly, it is for investment purpose. Since it is for investment purpose, then I don't assume that they want to develop the land, and will be looking to sell it off when the time comes. Make sense to you ? Well I don't know, but it makes sense to me at least, haha.

But I had to tell you that this is not enough. If you are doing your analysis research, you should not stop here. You should dig further to know where is this piece of land actually.

For this case, I will dig for you.

Since it is 450 acres, it is very big. I had no idea how big is 450 acres in this map, but I had plot out 2 potential location which is near to Sungai Karang, Gebeng.

By looking at it, this is just a piece of land, situated at Pahang, near the sea, and nothing much. But I have to tell you that if you are thinking so, you are wrong. First, you must notice that this land is very near to Kuantan Port. And do you know how valuable is the land near Kuantan Port. Go and study the case of Tenaga Nasional Berhad taking Integrax private.

Not only that, now we already know about the development of ECRL (East Cost Railway Line), with major eastern hub at Kuantan Port. And to have big development, we talk about big big piece of land. And 450 acres of Industrial land is actually very big.

Since this land is so good, let's talk about RM 12 psf for the land, reasonable or not? Reasonable la, because KL land all talking 500 to 800 per square foot, some talk 2000 per square foot. So Pahang talk RM 12 per square foot, very reasonable, maybe undervalue.... Haha

Based on 450 acre (x 43560) = 19,602,000 square foot, then x RM 12 psf to get the potential selling price.

Wow, a freaking RM 235 million !!!
To support my assumption, I will do research to see what are the asking land price. So iProperty got a
land is selling at RM 526 million for 928 acre, which work out to RM 13 psf.

So I assume RM 12, and reality check is RM 13psf. Reasonable assumption ?

Just the land alone, it is worth 75 cents for a share in Eden. So by selling the land at RM 235 million, I don't know if you want to smile or laugh, because I scared this company later will limit up.

As a conclusion, you know why you are still reading this blog ? Because, you will never find another site, or another guru, or another prominent investor teaching you such thing step by step for FREE. Everything is here for you to study as a reference.

Eden now slapped with going concern issue, but your decision to take the rocket or not, is your own choice.

Limit up to Moon? Mars? Saturn? or Pluto ? It is your choice also.

Tuesday, 6 June 2017

This Company can Load Up your Duit Raya Packet now!

In the stock market, we must admit that irrational things will happen. As a normal human being, we are always taught to be rational in everything we do. Rational in our thinking, rational in our action and there goes the list. However in stock market, many a times, we start to have self doubt when we are accessing stock rationally, yet the stock acted otherwise.

The irrationality of the market that frustrate most of the investor is when bad stock are in good times, and good stock are in bad times. This happened so often that investor are conquer by frustration, which lead to emotional judgment, and hence a potentially wrong decision. And often due to this, we will be shy to recognize and confront the wrong move made, hence, we will always repeat the same old movement again and again.

Many a time in investment, we have to really cling to our own precious study, and endure the market irrationality towards the pricing of the stock. Of course, here I am pointing out on stocks that are fundamentally good, yet traded at a misunderstood pricing.

Before I would hand to you this stock that had been misunderstood by the market, and trading at a irrational low price, I had to tell you a real scenario where I had encountered the same situation in 2016.

Back then in the spring of 2016, the Malaysian equity market is severely punished, with problem such as low crude oil price, volatile and weak exchange rate and a series of scams as well. Banks are doing huge restructuring and taking in big impairment that had drag down the financial reports. During those tough moment, it is where undervalue share with great fundamental become gems. So it is this one stock named KESM that I had noticed then which is very undervalued despite it's solid earning and cash position in the company.
As you can see, during bad times like 2016, a good stock can be misunderstood, and being priced at a valuation of PER x 5, despite the fact that the company had been growing in revenue, sector is beefing up for a much greater expansion, and the company had been sitting in huge cash position.

However, when the market turn on to a bullish note, albeit the company did improve it's bottom line EPS by 33%, the valuation shot up from trading at PER x 5 to PER x 15. And I had to tell you that this big leap in valuation brought KESM into almost four fold in price appreciation, from RM 4 all the way to RM 15.

So, did you get your lesson now ?

As the Hari Raya is coming, I would like to try to point to you this 1 valuable share that could increase your Duit Raya. This share I believe is bearing the same traits of being misunderstood for it's fundamental, and to see it trading at irrational prices, you either take action, or see people take action.

So this share is called KSL Holdings Berhad (KSL - 5038).

You might think that what is so special in this property developer now that can give you a fatter and juicier Duit Raya to spend.

For this, I have to show you few things that is happening in this company that is comparable to KESM.

Firstly, we must talk about earning. Base on FYE 2016, KSL had a final EPS of 31 cents. If we talk about valuation of PER x 5, that is also RM 1.50 already, right? Now let's forget about 2016, we will talk about 2017.

Based on Q1 FYE 2017, the earning is 5.25 cents. Most of the contribution are from property development in Johor and Klang. Others contributing segment is property management and car park.
Since KSL have a good track record and as property billing are progressive in nature, let's take annualized the earning and take 80% of it, that will come out to a projection of 16.8 cents for FYE 2017. I had to tell you this calculation is very "kiamsap" to the max, because as you can see property sentiment had started to pick up, I am taking a very bad case scenario by further discounting 20%. What if KSL 2nd Quarter is better, 3rd Quarter is even better, and 4th Quarter also around the same? Alright, we will stop building big mansion in the sky first.

Let's talk about putting a PER x 10 valuation on projected earning of 16.8 cents. That alone will see KSL worth RM 1.68 per share. I have to tell you that KSL is now trading at RM 1.25 and you have to be fast, because these 2 parties are not going to wait for you at all.


As you can see, the first party is Lembaga Tabung Haji. As a matter of fact, they had been mopping up KSL share since earlier this year, and it had gone even intense lately, with the latest being 870,900 units mopped up on 1st June 2017.

The second person mopping up is none other than director himself. As you can see, for the past 3 days, he had been committed in mopping 100,000 units from the open market.

Both their action signal 1 thing in accord - The share of KSL is very undervalued, misunderstood, and trading at irrationally cheap price !

I do not need to convince you further, but you have to look at the cash position as of lately.

As you can see, one of the major reason on the massive drop in share price is due to no dividend payment in 2016. With this RM 230 million cash pile in the bank, KSL will probably restart their dividend again in 2017.

To make sure the cash are not loaded out from extra loan incurred, this financial statement is a strong proof, showing great decrease in liabilities and bank borrowings as well.

In a nut shell, with RM 230 million in cash and only RM 80 million in bank borrowing, this is a net cash property developer company.

So, I had presented to you a company
1. Trading at low single digit PE
2. Trading 50% from NTA
3. Net cash company
4. Consistent development plan in Johor and Klang
5. Share mopped up in open market by director and institution fund

Now the ball is yours. Take the shot wisely. Good luck!

Thursday, 25 May 2017

Talk about business combo, probably you need to look at this company

Despite the 4 to 5 months long bull run in the KLSE, if you would agree with me, 1 of the segment which is still lacking is the plantation industry.

There had been a lot of headwinds in this particular industry. Firstly, the industry is hit by a higher minimum wages for it's worker. Subsequently, the usage of palm oil in edible consumer good is being boycotted by some Europe country in order to promote the usage of soy beans. Then, we have a cyclical weather of El Nino that will hamper the production of the fruits and the OER (Oil Extraction Rate) of the fruits.

While all this uncontrollable factors are inevitable, it will then boils down to the plantation company's prudent management as well as new strategy in order to keep it's competitiveness in the industry. Those company that had taken initiative to evolve for the better will continue to survive and keeping on the top of the packs.

But, if I would to ask you - How many plantation companies that you know, had taken such measure to make a bold step and evolve for the better ? For some bigger plantation company, probably that would be having a palm oil mill for oil extraction. But for most, they just want to plant palm oil, and sell palm oil.

Of course for now, I am going to share with you this 1 company that had taken a bold step in evolving it's business and adding value to it's existing plantation operation. As you know that global warming had push further on the usage of green energy, and what this company does in investing for a Biomass and Biogas renewable energy plant is just perfect to the notch.

Need not much of introduction, this company Sabah based plantation company is called - CepatWawasan Group Berhad (Cepat - 8982).

It was in 2014 that Cepat had invested in a 12MW Biomass Renewable Energy Plant and a a 3MW Biogas Renewable Energy Plant. However, the Biogas Renewable Energy Plant is currently upgraded into 3.8 MW, hence putting a combined output of 15.8 MW.

Now it is the time where Cepat will be able to reap the profits from the investment from the operation of the renewable energy plant. For the 1st Quarter of 2017, the renewable energy segment had contributed to 6.35 million in revenue. The figure will be expected to be raise with an additional 0.8 MW added into the Biogas plant, as well as more production of fresh fruit bunches this year.

The latest quarter had saw Cepat revenue increase significantly. For the past 4 rolling quarters, it had achieved a total EPS of 9 cents.

For a consistent growing company that pay dividend with diversified income from renewable energy, it will be fair to value Cepat based on PER x 12, which bring to a valuation of RM 1.08.

As you can see, the price of palm oil had been looking at a long term bullish with higher volatility in price swing. I will not give you a 5000 words research to tell you why palm oil is going up, but summarize in 3 of my own point
- Population is going up, and demand for food is going up.
- The higher usage of palm oil blend in bio diesel.
- The global weather is getting hotter and hotter, and a tough crop like palm oil tree can withstand harsh weather, making it a reliable investment.

By looking at the CPO price chart, we can possible see CPO being traded at the range of 3000 for the next 3 months due to a hotter weather generated from El-Nino. And a hotter weather with lesser rain will encourage more harvest at the plantation site, hence boosting the input to the renewable energy plant.

Now as you look at the price chart of Cepat, honestly I do not think Cepat will fall back below the support at 80 cents. This is due to additional revenue stream from the renewable energy division that can cushion the price fluctuation in the CPO. However, the share price could possible poise for an up leg, which can potentially looking to hit RM 1.05.

Last but no least, there had been a strong correlation movement between MHC and Cepat. It is understandable that MHC is also the biggest single shareholder in Cepat. With corporate exercise spanning across the equity market, it will not be impossible for Datuk Mah King Seng to do a reorganization with M&A activities to streamline the group operation and unlock the value in Cepat.

So, if you are a investor that like recurring income, I believe a plantation and renewable energy combo can be considered as one of the good combo that you can get in the market. Of course, through the journey, I believe the dividend from the business operation will subsequently increase.

In the end, you have to be "Cepat", because if you are "Lambat", then you will get nothing.