This week bought KESM at RM7.7x. After the quarterly result, the share price took a dive from RM8.00 to RM7.52 during the morning session. This was expected because their profit down year on year. I was not panic because I have studied their result, the drop in profit was due to forex, reversal of sundry items last year and tax. All these are exeptions and the core operations profit in fact has increased.
Whatever past is past, I buy shares for the future. What is the future of KESM at KESM share price of RM7.7x?
1)PE ratio 10 times. Not cheap but not expensive
World-wide semiconductor revenue is decreasing, however, the world-wide automotive integrated circuit market is forecasted to grow at 7.2%, from
a revenue of USD22.2 billion in 2016 to USD23.8 billion in 2017.
KESM is at the right unique sector, automation in car.
The company said...... We are just at the starting point of an exciting road ahead focusing on our strategic plans. Our customers are rolling out new devices and solutions to meet the growing demands by the car makers.
"We see great potentials as increasing new automotive devices are required for added features in the evolution of cars and our opportunities will remain as the demand grows," Lim said.
You see the word "starting point"? Means baru start (just started)
3) Affin Hwang recommended buy KESM with KESM fair value of RM11.00. Maintain BUY and target price of RM11
No major changes to our FY17-18E EPS forecasts and we introduce FY19E EPS of 129 sen (+26 percent yoy). We continue to believe that KESM is in the position to benefit from the strong growth in the automotive semiconductor segment, underpinned by rising electronic contents, from safety to infotainment and autonomous vehicles. Maintain BUY and target price of RM11 (12x calendarised 2017E EPS) which offers almost 40% upside.
4)With share price of RM8.00, high chances for bonus issue and share split which will attract more buyers and volume, get re-rating and unlocking value.
KESM dividend is poor, 1% yield I think. But they have generated a lot of cash and reduced a lot of debt. In fact, the dividend has increased. Last year dividend RM0.06, this year 25% more RM0.075. I strongly believe they will pay more dividend in the future.
I was waiting for a lower price but KESM share price rebounded from RM7.52 to RM7.7x. I couldn't wait and bought it. I think many people had realised that the quarterly result is not that bad after all. Please remember we are buying for the future and not the past.
KESM share price closed at RM7.94. I bought at RM7.7x, about 3% higher from the low. Am I bad investor? I don't think people will always get at the lowest price, only SKL can do that. Who is SKL, those who know cantonese will know.
Those who have just sold, after getting more info, if they think KESM is good to buy at this price, can consider buy back. I'm not saying KESM is good to buy for them, I'm saying with all info and "they think" KESM is good at this price, can consider buy back. Because what's wrong if we buy a stock that we think is good? Past is past.
All things come with a risk. With the information that we have for KESM, I will continue to add KESM, unless got negative news.
Again, did not manage to add FIBON stock.
PRLEXUS, as shared in my previous articles, their factories and fabri mills ready in around 2017. I was supposed to KIV this stock and buy in 2017, but as shared in my facebook it seems the volume and share price has started moving a bit. Bought at RM2.4x.
Sometimes i forgot to share what I want to and forgot what I have shared. All these bloggings taking a lot of times because I have to check here and there. I don't even have wifi at home. All typing via phone. If you eat I dont feel full, if you don't eat I will not get hungry. But as long as my sharing can help others, I'll be very glad.
After searching, I have not shared my selling of CIMB. I sold my CIMB for gain. Bought at RM4.4x sold at RM4.7x. This CIMB is not for long term, took opportunity on the low price and momentum.
LBS stock announed some don't know what developments. Newbie bought it at RM1.6x and now RM1.78, up more than 10%.
His Gadang continue to grow strong, with Gadang share price almost RM3.00.
His Inari share also steady, maybe is because of the launching of new iPhone.
I don't have these stocks.
Those he cut loss examples DRBHICOM and GTronic share prices are higher than his selling price.
Oh, have I shared newbie also bought KESM few weeks ago? His price was RM7.8x if I remember correctly. He kind of like the idea of growth in the driverless car/taxi which may benefit KESM.
Many people are making huge gain from steel companies. I missed it because was not aware of what was happening. Some of the steel related stocks shared by prominent uncle: (for concrete reinforcement in construction) players such as Masteel, Southern Steel, Annjoo; downstream players like Choo Bee, Leon Fuat, AYS, Leader Steel and etc. He said must study carefully, not all steel companies are the same. Some produce different products, some only small percentage of revenue from steel.
Superlon stock. Dropped from RM2.3x to RM2 and now rebounded to RM2.4x. Quarterly result is out soon. Hopefully will be good.
MBSB price looking good. Will not buy more.
Bison share price is almost RM2.00. I made but did not buy more because the PE is high. Analysts also did not give high fair value. I will just hold.
PERAK TRANSIT BERHAD IPO
Kenanga said... We like this new IPO, Perak Transit, for: (i) its quasi-recurring income model, (ii) being in a highly defensive sector with high barriers of entry, (iii) tax incentives and strong PAT margins of 30.2-32.1% in FY17-18E, and (iv) future growth from new Kampar terminal (IPO proceeds of RM36.8m is mainly for this development). Forecast earnings of RM27.1-RM31.1m and 4.0-4.5% yield in FY17-18E. Our DDM derived Target Price of RM0.22 (52.6% total returns) implies FY17E PER of 9.4x. SUBSCRIBE.
Forecast earnings of RM27.1-RM31.1 for FY17-18E mainly from A&P revenue growth, additional 25 buses in FY17, while the project facilitation fee remains the icing on the cake. We are expecting bottom line margins to expand in FY17, and estimating 30.2-32.1% PAT margins in FY17-18E from continued growth in the A&P revenue YoY, and on the back of lower effective tax rates (9%,7%,7% in FY16,FY17E,FY18E) derived from tax benefits received. A dividend pay-out policy of up to 25% translates to FY17-18E DPS of 0.59-0.68sen (4.0-4.5% yield based on the IPO price of RM0.15).
DDM-driven Target Price of RM0.22 with total return of 52.6% (7.69% discount rate; 3.19% 5-year risk free rate). Our TP implies FY17E PER of 9.4x. There are no direct comparable but given its quasi-recurring income base, we back tested our valuation method against small cap (<RM1b market cap) MREITs. Based on average small cap MREITs’ FY17E PER of 16.0x and yield of 6.0%, we derive a Fwd. PER of 10.2x for Perak Transit based on its FY17E yield of 4.0% and this imply a TP of RM0.24, which reaffirms our valuation. We opt to maintain our DDM approach and TP of RM0.22 to be more conservative. SUBSCRIBE.
PTRANS target price is RM0.22.
Opening of application 15 Sep 2016
Closing of application 23 Sep 2016
Balloting of application 27 Sep 2016
Allotment of IPO shares to successful applicants 04 Oct 2016
Tentative listing date 06 Oct 2016
INITIAL PUBLIC OFFERING IN CONJUNCTION WITH THE LISTING ON THE ACE MARKET OF BURSA MALAYSIA SECURITIES BERHAD COMPRISING PUBLIC ISSUE OF 245,000,000 ORDINARY SHARES OF RM0.10 EACH IN PERAK TRANSIT BERHAD ("PERAK TRANSIT SHARES") IN THE FOLLOWING MANNER: (I) 58,000,000 NEW PERAK TRANSIT SHARES AVAILABLE FOR APPLICATION BY THE MALAYSIAN PUBLIC; AND (II) 187,000,000 NEW PERAK TRANSIT SHARES AVAILABLE FOR PRIVATE PLACEMENT TO SELECTED INVESTORS; AT AN ISSUE PRICE OF RM0.15 PER SHARE, PAYABLE IN FULL ON APPLICATION.