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Friday, April 29, 2016

Gadang, MFCB, TGuan, LBS, Superln, Mitrajaya, Prolexus

Gadang stock.
Low PE ratio with growth potential. Dividend normal.

Public Bank research said...
Mega First Corporation Bhd MFCB
The construction of Don Sahong Hydropower project has started since October last year. The Group is expected to recognize construction profits over the construction period of next four years starting from next year. We expect additional earnings contribution of RM35m-38m per annum to the Group’s bottomline for 2016-2019, which is an increase of 63-67% from FY15.

Thong Guan stock.
The China noddle related business will contribute significant to the company.

LBS stock.
Some brokers recommended buy.

Superlon said it will benefit from the global warming.

Mitrajaya stocks
Many brokers still recommend buy.

PROLEXUS stock. A research recommended but but then down a lot.

Saturday, April 23, 2016

Inari, GUH, Mitrajaya, Caring stocks

We continue with the journey, but today I'll post more stocks.

2nd quarter of 2015, newbit bought Inari Ametron at RM3.3X.

The buyer seller was about RM3.38. He told me he will key-in good-till-date to buy RM3.50 for two weeks. I was curious and asked him why market price was RM3.38 but want to buy at RM3.50. Then he realised he made a mistake, and joked that he must be drunk.

Is it quite common that remisiers, dealers or clients made mistakes. Bursa has implemented dynamic limit in which I think is wonderful. It helps reduces mistakes in addition to price marking. Many brokers also have some sort of system controls to help reducing mistakes, but at the same time it causes some inconveniences. We must understand that brokers want to help us, and should not be screaming at remisiers or brokers if some of the controls have affected our genuine trades.

Coming back to Inari shares, in the end he bought at RM3.3x, the PE ratio was not cheap but not too high and with reasonable growth. So he bought it.

After 6 months, it went up to RM4.7x, up more than 40% from purchase price. Then there is a bonus issue of 1 for every 4. So his cost is about RM2.6x.

Now the Inari stock price has dropped 25% from RM3.7x after bonus to now slightly more than RM3.00.

Lessons? Please be careful when you key in your order.

Should he have sold when it was up 40%? Talk is easy, because now we knew it has dropped back to RM3.00. When it up 10%, should he sell? 20%? Nobody know the 40% is the highest.

At that time there was no adverse reports from analysts, so he decided to keep. He is for long term, there will not be any active buying and selling.

Currently his Inari is up more than 10%, plus dividend also not so bad.

GUH.
Then after few months he bought GUH. It was RM1.60 when he first saw it, but it dropped to RM1.0x. Lazy to find out what price he bought it, I think is RM1.0x.

Now GUH stock price is about RM0.90, dropped more than 10%. Made from Inari but lose on GUH. Only gain from dividend.

GUH he sometimes receives business news that GUH got projects. Always got good news. But it did not translate into an increase of GUH share price.

Lessons learned? Project does not equal to good stock buy. It is the PE ratio and growth that are more important.

Caring.
Not sure have I posted he sold Caring stock and made 90% or 100%? Can't remember. This Newbie he then sold his Caring stock.

Reasons for selling?
1)PE ratio was very high after share price increase, close to 30
2)lack growth from analysts reports
3)dividend yield low because share price high.
4)almost all analyst recommend sell.

I think I have posted so will not write more. Nobody remember why he sold half on the first selling. Maybe he que there only done half or maybe he threw to buyer only done half. After a few weeks he was quite curious why he still have Caring shares, then he sold the balance.

Good profit. Almost 100% I think. Congrats.

Then Newbie bought Mitrajaya stock.
Mitrajaya share price he bought was RM1.1x if I'm not mistaken. With current Mitra stock price of RM1.27, made 10% profit already.

That's all for now.

Almost cover all, I think the next post I will be able to cover all the the historical transactions.

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Saturday, April 16, 2016

Why So Easy to Make Money in Stock Market

Many people will think that making money in stock market is difficult. But it is actually very easy.

Take a look at Fixed Deposit first.

If you put FD in a bank, example one month expiry will give you 3% per annum. One year expiry will give you 3.3%.

If you withdraw your FD before expire date, you will lose all your interest.

You may compare with few banks and select the highest rate.

Then look at insurance for pure savings plan. Some insurance give a high rate of return, very minimun insurance coverage, and you invest monthly, quarterly or yearly for a period of time, example 5 years, 10 years or 15 years.

If you withdraw before the maturity date, you will lose interest and probably lose a lot of your principal/capital.

You also compare a few insurance companies and trying to select the best.

Now come back to stock market. If you compare stocks, invest in good fundamental stocks, fixed amount periodically (example every month, quarter or year), for 3 years, 5 years or 10 years, then you can expect good profit. That is as easy as that.

Why is it so difficult? Because you have to wait. FD and insurance also have to wait. Is making money from FD or Insurance savings plan difficult? No. Then why you think making money from stock market is difficult? Just wait.

Don't know what stock to buy? Do you know which bank offer the best rate? Which insurance company offers the best savings plan? You have to do a bit of homework. For insurance plan is very difficult because they are with different terms, some give you better coverage, some give you better cash rebate, some give you bigger lump sum at maturity, some give you shorter period, some give you better cancellation sum, etc. Stock market also, some give you high forecast growth, some good past records, some good dividend, some low PE ratio, some low gearing and high cash, etc.

It is hard to select the best insurance savings plan because of so many different factors to compare. Similarly for stocks. As long as we buy reasonable good fundamental stocks, that will be great.

We have insurance agent to help us. We also have remisiers and dealers to help us.

In conclusion, it is very easy to make money in stock market. The most difficult part is "WAIT".

You work as part-time worker in shopping mall, easy, as long as you work, you will get paid. Because you put your effort and working hours. In stock market, as long as you put some effort investing in good fundamental stocks regularly and put effort to wait for a period of time, profit will come.

Easy? Some said easy.
Some said no, because have to put effort. Just like working part-time, have to work. No free money.

But at least we know one thing, work in part-time job, money will come. Invest in stock market, profit will come.

Is making money in FD, insurance savings plan and stock market easy?

If yes, all three will be yes.
If no, all three will be no.

Don't always listen to those who lose money. There are a lot of people lose money in 1994 (down from super 1993 bull run), 1997 (asian financial crisis and down from 1996 2nd Board super bull), 2000 (down from 1999 IT bull), 2008 (sub prime crisis).

Think by yourself. Where EPF, unit trusts, Warren Buffett and insurance company invest their (or our) money? Answer: stock market.

Insurance company invest in fundamental stock, keep investing and wait.

Those who lose money, did they invest in good fundamental stock? No? Yes?

If yes, did they keep investing? They may entered at wrong time. Need to keep investing.

And lastly... wait.

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Saturday, April 9, 2016

Why Newbie Loss more than 20% AGAIN?

Bought BJAuto at RM3.7x in second quarter of 2015. Bonus issue 2 for every 5, so his cost is RM2.6x.

Now Berjaya Auto is RM2.10, lose more than 20%.

Don't know why he bought Berjaya Auto but I think for new investors they are interested in stock names that they are familiar, examples AirAsia, BJauto becuase of Nissan, Aeon, Maybank, Public Bank etc. But some probably will not buy Nestle or Public Bank because they feel that the prices are expensive, eg RM74 and RM18.

Whether a stock is expensive or not is not RM74 or RM0.74. It is the PE ratio. Please take note.

Between Mitrajaya and BJauto, newbie had choosen BJauto. At that time the PE ratio was 1 year forward 14x, 2 year 11x. With dividend yield of 3.5%, with some growth potential and recommended by analysts. Therefore, I did not object because he needs hands-on experience.

Fast forward one year now. What went wrong? I believe is the depreciation of MYR, where ringgit dropped sharply and the import cost is much higher plus poor market sentiment.

Diversification is important for him, if he had concentrated all money in BJauto, his portfolio will be under water now. He has to buy different stocks from different industries.

Despite of many stocks where he made losses more than 20% or 30%, his overall portfolio currently is still making money. Stay tuned, will continue to post more of his journey on the trading by a newbie who has no time and lack of interest and lack experience/knowledge in stock maket.

All the best to you newbie. As long as you continue to buy good fundamental stocks by the same amount or more, you will continue to make money.

The keywords are:
CONTINUE
SAME AMOUNT OR MORE (if you can afford)
FUNDAMENTAL

Yes newbie, you can do it!

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Saturday, April 2, 2016

How Newbie Lose 20% from Stock Market

Newbie bought his next stock Sime Darby at RM9.2x and sold at 7.4x in less than a year and made 20% loss.

He told me he wanted to buy Sime Darby. He said moderate PE ratio with some growth prospect and recommended by few analysts. I did not object, although I felf that it was not a very good growth, it was not a bad stock. If I object, I will have to explain why and the stock actually was not bad as per the research reports. Cannot spoon-feed him and he need to learn by experience also. Furthermore, he is on the opposite side of the earth, I day time he night time. When we talk, better talk about his studies, girls, jobs, movies, etc.

He bought it and lose 20% with few months and sold about 11 months after buying. I think most probably is because of the low palm oil prices from last year until early this year.

One day he suddenly told me he wanted to sell Sime. I asked him why, he said many analysts recommended sell.

I was very reluctant to say yes, sell. Because he is very busy and few months only buy one stock, portfolio also not many and now want to sell.

Then he told me he got two stocks in mind and will buy one and next month one.

I agreed for him to sell, because....
1) let him learn to cut loss. Analysts said not good, can consider to cut loss.
2) he has identified two stocks. So one is to replace Sime and one is additional and his portfolio will be bigger. After selling one, buy two stocks at a time. He is super slow, just can't wait for him to finish off all the money allocated for buying stock.

Coming back to Sime, one day after he has sold, Sime share price went up strongly.

For the past few weeks the crude palm oil prices kept going up. I just check, Sime share price is RM7.88.

His timing was totally out. Bought at the wrong time and sold at the wrong time. But at RM7.88 not a big difference from his selling price.

Will share what are the two stocks he bought.

Once again, timing is important in stock market. But as you see, this newbie went in at the wrong timing many times, but his overall portfolio is still making money.

He bought oil and gas company (Barakah), plantation (Sime), car company (DRBHICOM proton and Bjauto), all were badly hit by big drop of oil prices, palm oil price and Ringgit.

But as a normal investor, how do we know how to time the market? How to predict? That's why I normally do not time the market. Because I do not know how.

Fundamental is important. Newbie got no experience also can make money.

Will continue to post Newbie trades, journey, experience and lessons learned.

All the best to you newbie.

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Wednesday, March 30, 2016

PECCA GROUP Berhad IPO

PECCA GROUP BERHAD

Opening of application 29 Mar 2016
Closing of application 05 Apr 2016
Balloting of application 07 Apr 2016
Allotment of IPO shares to successful applicants 18 Apr 2016
Tentative listing date 19 Apr 2016

Stock code stock name PECCA.

INITIAL PUBLIC OFFERING OF 91,126,000 ORDINARY SHARES OF RM0.50 EACH IN PECCA GROUP BERHAD ("SHARES") IN THE FOLLOWING MANNER:- (A) PUBLIC ISSUE OF 47,796,000 NEW SHARES; AND (B) OFFER FOR SALE OF 43,330,000 SHARES

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KUALA LUMPUR: Pecca Group Bhd, which is en route for listing on the Main Market of Bursa Malaysia Securities Bhd, is looking to raise RM67.87 million from its initial public offering (IPO) exercise to increase its production capacity.

Founded in 2010, Pecca is primarily involved in the styling, manufacturing, distribution and installation of leather upholstery for car seat covers, and the supply of leather cut pieces for the automotive leather upholstery industry.

Its shares will be listed on April 19, with a market capitalisation of RM266.96 million.

The IPO exercise entails a public issue and offer for sale of 47.8 million new ordinary shares and 43.3 million existing ordinary shares respectively, totalling 91.13 million ordinary shares, at an issue price of RM1.42 per share.

Proceeds from the IPO exercise will be used mainly for its working capital (39.74%), repayment of bank borrowings (25.2%), purchase of new machinery and construction of an additional floor on its existing factory building (18.49%).

Chairman Datuk Mohamed Suffian Awang told reporters at its prospectus launch yesterday that the group intends to increase its production capacity to 170,000 sets of car seat covers annually by year 2017, from 120,000 currently.

“This is to support our current business activities and to cater to the anticipated increase in our sales volume from contracts currently secured and to be secured in the future by us,” he added.

He said the balance of the proceeds will be used to open 50 retail outlets (5.52%), to establish an entity in Thailand (2.21%), for the expansion of Pecca Leather Aviation Services Sdn Bhd business (1.47%) and listing expenses (7.37%).

On the outlook, Mohamed Suffian said he is positive that the group is well-positioned in the automotive leather upholstery industry, given that it has been a fast-growing sector of the economy for the past 30 years.

He expects the demand for the automotive industry will continue to increase moving forward, driven by the rising income level of consumers, the country’s car-centric culture as well as support form institutional policies.

“Thus, we are confident that we will be able to leverage on this rising demand, which offers a favourable outlook as well as promising growth prospects for the group,” he added.

Pecca’s net profit for the financial year ended June 30, 2015 grew 23% to RM17.86 million, from RM14.48 million a year ago, while revenue was up 30% to RM129.5 million, against RM99.5 million previously.

Source: thesundaily

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Monday, March 14, 2016

Bison IPO share price target fair value

KUALA LUMPUR: PublicInvest Research has accorded a fair value of RM1.15 to Bison Consolidated, which operates press and convenience retail chains in Malaysia, based on 25 times FY16F earnings per share (EPS) of 4.7 sen.

The research house said on Friday its fair value of RM1.15 implied an upside of 4.3% from its IPO price of RM1.10. Its FY16F earnings growth is supported by network store expansion of new outlets and better product sales mix such as fresh foods with higher margin.

Bison Consolidated, which is set to be listed on March 29, is expected to raise RM88.7mil from the new issuance of 80.6mil shares.

The group is involved in the business of press and convenience retail chains in Malaysia under trade names of “myNEWS.com, “newsplus”, “MAGBIT”, and “THE FRONT PAGE”. It also operates “WHSmith” outlets within Malaysia’s international airports.

Presently, the group operates 255 outlets across Malaysia. According to an independent assessment done by Smith Zander, Bison is the second largest retail convenience store industry player in Malaysia with a market share of 8.6% based on the number of outlets and 6.6% based on revenue in 2015.

It is also the largest homegrown retail convenience store industry player in Malaysia. The company also has a 50% joint venture in “WHSmith” with WH Smith Travel, an indirect unit of WH Smith PLC (UK), one of UK’s leading retailers. To-date, it has eight outlets in Malaysia, located in KLIA, klia2, Langkawi International Airport, Penang International Airport and Kota Kinabalu International Airport.

Bison Consolidated expects to increase its outlets by 115 units over the next two years to boost its revenue, focusing on “myNEWS.com” as the main trade name. There are plans to set up another distribution centre in the medium term to improve its warehouse efficiency and cost effectiveness. On the cards is to expand the outlets by franchising “myNEWS.com”.

However, PublicInvest Research said the company was highly dependent on the “myNEWS.com” brand value, reliance on major tobacco suppliers and also any disruption in logistics and distributions would affect its operations.

Meanwhile, CIMB Research has placed an indicative equity fair value range of RM464mil to RM581mil for soon-to-be listed Bison Consolidated. This indicative value translates into a valuation of between RM1.49 to RM1.87.

The research house said it derived the value by using P/E methodology, where it asribed P/Es of 25 times on the high-end of the valuation and 20 times on the low end, based on its FY17 earnings forecast for Bison.

“The lower end of the equity value range is based on a 20% discount to the implied forward FY17 P/E of its closest listed peers, 7-Eleven Malaysia Holdings Bhd,” CIMB said.

It explained that the discount was mainly to reflect the group’s smaller market cap and market share in the retail convenience store industry.

CIMB Research said higher end of the equity value range was in line with the forward P/E of its peer to reflect Bison’s superior two-year earnings CAGR and higher net margins.

Source: The Star

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