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Monday, February 28, 2011

BJFood Share price target fair value IPO

The latest BJFood IPO news, HwangDBS is recommending BJFood IPO.
But let us use PEGGY Method and see how.

PE: PE Ratio
G: Growth
G: Gearing
Y: Yield (dividend)

I am using BJFood IPO share price of RM0.51.

BJFood PE ratio is 8.4x (EPS RM0.061 Apr 2010).
BJFood growth is 3.5%(2011), 10.6%(2012)
Bjfood gearing: net cash.
Bjfood dividend yield n/a. Projected 4.1% for year ending April 2012.
The above figures are from HwangDBS.
With BJFood target price fair value at RM0.61


HwangDBS said BJFood is the operator of Kenny Rogers Roasters restaurants in
Malaysia. BjFood has a growing cash position (from RM0.19 per share after Bjfood IPO), and will drive the expansion plan.
Bjfood fair value of RM0.61 based on CY11 P/E of 9x, offering 20% upside potential to bjfood IPO price of RM0.51.


Polite Market's Comments:
Bjfood PE ratio is ok, and with net cash and dividend.
But the growth is just moderate.
I think Bjfood target price of RM0.61 is fair.


According to HwangDBS, there is a possibility that BFood could be granted the franchise right to develop and operate Kenny Rogers Roasters chain of restaurants overseas by its controlling shareholder, Berjaya Group (which holds the worldwide KRR brand with an existing presence in the Philippines, China, Indonesia and Bahrain) as it leverages on BFood’s expertise and experience to expand the business. BFood is also in a position to acquire from BGroup its other food & beverage businesses (e.g. Starbucks Coffee, Papa John’s Pizza, Krispy Kreme Doughnuts, Wendy’s).


More info on BJFood and recent IPO.
http://politemarket.blogspot.com/search/label/IPO

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Margin Call is it a concern?

Somewhere in 2010, market was down for few weeks. I went to a broker, and I heard someone ask a remisier "margin call still got a lot?". He was afraid that if the margin call still a lot, then stock market will still have a lot of selling pressure and cannot recover. Then another person in another place also ask the same question. Many tends to ask the same questions during market down turn.

Politemarket's Comment:
Margin call or forceselling will create selling pressure in the stock market. They will cause the market to go lower. But this will NOT hinder market recovery.

Let me explain.
1) Only a very small percentage of investors are using Share Margin Financing to invest in stock market.
2) Not all hit by margin call will sell shares, half will top up by cash or additional collateral.
3) Stock market just need to go up moderately for two days and most of the margin call will be rectified. When the share price up, the total collateral value also up, and many clients will have no more margin call.

That is why whenever there is a crisis, stock market is getting lower and lower, more and more margin call, but suddenly market reach a bottom and start to recover and no more down trend. What happen to all the margin calls? Most have been rectified by two days of market up.

When you need to be concerned?
Single counter financing and illiquid counters. These kinds of counters will take very long time to recover or may not recover. Single Counters Financing also include those share margin financing that is highly concentrated in one counter, example 80%.

Although many counters are illiquid, mixed counters margin clients can sell any stock that have volume. Example if investor A has 7 counters and no money to pay for margin call, he will sell the stocks that have buyers. So, it will not cause sharp drop in any of the counter.

But if investor B has just one counter, and he got no money to pay for margin call, he got no choice but have to forcesell the illiquid stock and push down the price sharply.

How to identify these single counter financing and illiquid stocks?
Illiquid stock you can look at the volume of the stock, easy.
Single counter financing you have to look at the list of largest shareholders. You can find it in annual report. If most of the largest shareholders name are with Nominees Pledged Account, then most probably it is a single counter financing.

Conclusion
Don't worry about overall margin call, stock market just need to go up moderately for two days and most will be rectified.
Only worried if the counters are illiquid and with many single counter financing.

Hope this will clear your perception on margin call.

Can post any question of Share Margin Financing to me and I hope I can help. But don't ask me which bank offer the cheapest rate because I didn't do survey and they always change their rate.

For more info on Share Margin Financing, here....
http://politemarket.blogspot.com/search/label/Share%20Margin%20Financing

My blog link.
http://politemarket.blogspot.com/



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TSH Share Latest News (a High Growth Company)

TSH Resources Bhd's fourth quarter net profit ended Dec 31, 2010, up 115.98% to RM44.22mil compared with the previous corresponding quarter mainly due to higher contributions from Indonesian operations.
Revenue for the quarter was 12.83% lower at RM247.44mil.

TSH group chairman director Datuk Kelvin Tan said the record profit was primarily attributed to the robust performance of the Indonesian plantation where the fresh fruit bunch (FFB) crop grew 107% compared with the same quarter last year as more areas came into harvesting.

The record profit was achieved despite modest crude palm oil price of RM2,610 per tonne realised for the quarter.

Datuk Kelvin Tan said the company was confident of achieving more record profit as the mature hectarage at end-2010 represented only 34% of Indonesian oil palm plantings.

“With more immature areas coming into harvesting over the next few years and as more areas reach peak yield age, we are assured of strong FFB crop growth. With the resultant unit cost reduction and on expectation of remunerative price, TSH is entering an exciting profit growth phase,” he said. The Star 24/02/11

More in on TSH share.
http://politemarket.blogspot.com/search/label/TSH

My blog link
http://politemarket.blogspot.com/


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Sunday, February 27, 2011

Hua Yang Share Latest News

Hua Yang Bhd plans to expand to East Malaysia Sarawak and Sabah in the next two years.

Hua Yang Chief Executive Officer CEO Ho Wen Yan said currently Kota Kinabalu Sabah is the best entry point for Hua Yang to penetrate the new market.

"We have identified Kota Kinabalu as a growing vibrant city with strong economic growth in Sabah and Sarawak, due to tourism, plantation, timber as well as oil and gas".

Hua Yang is in talks with several parties from Kota Kinabalu, and expect to have at least one project there within one or two years. Hua Yang plans to buy 100 to 300 acres of land in Kota Kinabalu with most of them to be in the outskirts. The land acquisition would be funded by internal funds or bank borrowings.

The company would start off with a small project in Kota Kinabalu in order to test the market.

"We are looking for affordable residential development and township development. "The affordable segment is always very resilient. The RM90,000 to RM400,000 price range demands are currently very strong and we expect it will remain strong for the next two years," he added. -- Bernama/Business Times 24-02-11

More info on Hua Yang.


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Saturday, February 26, 2011

52 Ways of Making Money in Stock Market - Part 07/52- General Offer

We can make money in stock market by investing in General Offer.
General Offer is where the offeror made an offer to buy the remaining shares that it does not owned.
Example ABC Ltd currently hold 29% of Stock X. Stock X price is $0.50.
ABC Ltd (the offeror) makes an offer to all existing shareholder of Stock X at $0.60. When the news are out, then Stock X price will shoot up to near $0.60, example $0.585.
If Mr Z is existing Stock A shareholder, he can choose to accept the offer at $0.60 or he can sell it through the market at $0.585.
 
How you can make money through this. If can buy the Stock X at $0.585 and accept the offer at $0.60. You make 2.56%, minus brokerage, then you make more than 2% within two to three months.

Two extra benefit that you may get is i) if not many people take up the offer, the offeror may revise the offer. So you make more than 2.56%. ii) depending on the fair value of the company, the share price may trade higher than the GO price.

I saw one big company always do this. Don’t know what company is that, but after the GO was announced, they will buy very large quantity and accept the offer. Because they are buying large quantity, they have to make announcement. I saw their name few times.

Depend on the complexity / conditions of the offer, some take longer time and some take shorter time. A formal GO take about 2 to 3 months. That means your money will be stuck and you may miss other investment opportunity. Once all the conditions are met, the offer become Unconditional and the offeror will have to pay you within 21 days from the day you accepted the offer.
Most counters after the GO is announced, the buying and the seller quotes are quite stable/stagnant already. Example many people queing to buy at $0.585, so you may have to offer higher price or you may need to que. Higher price means less profit.

Most of the times the percentage of profit is very low. You may get lower than 1%. You may feel not worth of doing it. However there are many Fund Manager or big company doing it because it is much higher than putting in FD. Assuming FD rate of 2.4% per year, one month is only about 0.2%++ .


RISKS, LIMITATIONS AND DIFFICULTIES
One major risk is that if the condition of the offer is not met, then the deal may be aborted and the price may drop back to somewhere near the price before GO announcement.

Example of General Offer conditions is where Offeror have to get more than 75% of the company total shares before the deadline. Other conditions such as the offer has to be approved by Securities Commission and Offeror’s own shareholders.

However, not all counters prices will drop if the deal is aborted. Example in 2010, MRCB share price went up higher than the GO price even after the GO was aborted. You may have to check what is the fair value of the company. In this case, many research analysts said MRCB fair value is higher than the GO price.
 
OPINION:
Go for it if i)it meets your investment % return, ii)you can take the risk if the deal is aborted, iii)you don’t need the money before they pay you, iv)the fair value of the company is high and you may not lose much is the deal is aborted.
Because I am using Dollar Cost Averaging, I can plan out my cash flow. I have accepted many General Offer and it is much better than put in FD.
 
Please bookmark me and visit me again.
More info on 52 Ways of Making Money in Stock Market.....
http://politemarket.blogspot.com/search/label/52%20Ways%20of%20Making%20Money%20in%20Stock%20Market
 

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Thursday, February 24, 2011

APFT IPO

APFT Berhad IPO.
APFT IPO opening date 24-02-11.
The closing date of APFT IPO is 08-03-11.
APFT IPO share issue price  is RM 0.50.
APFT Bhd IPO issuing house is MIDF 638.
The APFT IPO will be listed on the Main Market.
APFT IPO tentative listing date 18-03-11 

More on IPO.
http://politemarket.blogspot.com/search/label/IPO


Asia Pacific Flight Training Sdn Bhd opened its academy of flight training, Asia Pacific Flight Training (APFT), to specialize in airline pilot courses for commercial airlines at Sultan Ismail Petra Airport, Pengkalan Chepa, Kota Bharu Kelantan.
APFT is fully accredited by the Department of Civil Aviation (DCA) and the Ministry of Higher Education Malaysia as an advanced tertiary training institution. Internationally recognised by the International Civil Aviation Organisation (ICAO), APFT has been selected by Malaysia Airlines and other major airlines as an approved organization for flight training of their cadet pilots.
At APFT training cadets are exposed to an aviation environment where airline domestic operations occur daily.
Sultan Ismail Petra Airport operates a first-class airfield, equipped with Radar, Instrument Landing System and other approach aids.


Objectives
Asia Pacific Flight Training is a fully accredited college of flight training, approved to teach and examine students for:
• Private Pilot Licence
• Commercial Pilot Licence
• Airline Transport Pilot Licence
• Multi-Engine & Instrument Ratings
• Assistant Flight Instructor Course

As a private institution of higher education registered with the Ministry of Higher Education Malaysia, APFT conducts a course of study for the Diploma in Aviation (Pilot Training). 

Business Times extraxt: 24-02-11
BIMB is arranging its first ever initial public offering (IPO), that of flight training academy APFT IPO, which is launching its prospectus today.BIMB which formed its investment banking division in November 2006, was hired by APFT as the principal adviser, managing underwriter, underwriter and placement agent for the APFT IPO.
APFT IPO shares are set to be listed on Bursa Malaysia's Main Market next month.
The APFT IPO entails a public issue of 22 million of new 20 sen shares at an issue price of 50 sen each.


The Star 17-02-11
PETALING JAYA: Flight education and training academy APFT Bhd is expected to list on Bursa Malaysi a Main Market in March.
APFT said in a statement it had signed an underwriting agreement with BIMB, Inter-Pacific Securities Sdn Bhd and Kuwait Finance House (M) Bhd for its initial public offering (IPO).
“The underwriting pertains to APFT's IPO public issue of 22 million new ordinary shares of 20 sen each at an issue price of 50 sen per share.
“Of the total IPO shares, 15 million will be offered to the Malaysian public and seven million for subscription by eligible APFT employees and persons who have contributed to the APFT group's success,” it said.


More on recent IPO.
http://politemarket.blogspot.com/search/label/IPO


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Evergreen Share Price Target Fair Value

Evergreen Share Price RM1.43
With the latest Evergreen stock quarter financial result, here are some updates.
Profit was below most analysts forecast due to higher rubberwood log costs caused by prolonged rainy season, and high latex prices.

A quick PEGGY Method evaluation:
PE: PE Ratio
G: Growth
G: Gearing
Y: Yield (dividend)

Evergreen PE Ratio is 6.9x (Dec 2010, RM0.208)
Growth 6.9% (2011), 7.5% (2012), 2.6% (2013)
Net gearing manageable at 0.4x, dropping to 0.2x.
Dividend yield 5.6%.
The above figures are from RHB Evergreen research analysis report.

Evergreen PE ratio is low, good. But as per RHB forecast, the growth is low.
If you think that the growth is high, or other brothers forecast a higher growth, then Evergreen stock can be considered.

Evergreen share price target fair value RM1.56 RHB market perform
Evergreen share price target fair value RM2.02 OSK Buy
Evergreen share price target fair value RM2.00 HwangDBS Buy

Up to individuals to decide.

More info on Evergreen Fibreboard share.
http://politemarket.blogspot.com/search/label/Evergreen

More info on current IPO
http://politemarket.blogspot.com/search/label/IPO




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KFC Share Price Target Fair Value

KFC Share Price RM3.92

Latest quarter financial result were within most analysts expectation.

A quick PEGGY Method evaluation:
PE: PE Ratio
G: Growth
G: Gearing
Y: Yield (dividend)

KFC PE Ratio is 19.8x (Dec 2010, RM0.198)
KFC growth 13.8% (2011), 15.7% (2012), 14.9% (2013).
KFC Gearing- Net cash
KFC Dividend yield 1.7%.
The above figures are from RHB KFC Research analysis report

Concern on KFC:
According to RHB , rsing food costs (corn specifically for KFCH, as this is the main feedmeal for its integrated poultry division) globally could cause KFCH’s margins to be squeezed in the short run.

My other concern is Related Party transaction. I think few companies under this Johor Corp have some buying and selling of properties. I hope the transaction will be at market fair value.

Benefit in buying KFC Malaysia?
I see the main benefit is growth.
KFC stock price is NOT cheap. Hoping that the medium term growth will cause KFC price to grow.

How about KFC taking private? Now already quiet down. I have no further info on KFC privatisation, but I think not that easy.

KFC share price target fair value RM3.85 RHB market perform
KFC share price target fair value RM4.15 OSK hold
KFC share price target fair value RM3.97 Maybank hold
KFC share price target fair value RM4.30 BIMB hold

More info on KFC.
http://politemarket.blogspot.com/search/label/KFC

More info on current IPO.
http://politemarket.blogspot.com/search/label/IPO


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RCECAP Share Price Target Fair Value

RCECAP share price RM0.53.With the RCE Capital latest quarter result, here is some update.

A quick PEGGY Method evaluation:
PE: PE Ratio
G: Growth
G: Gearing
Y: Yield (dividend)

RCECAP PE ratio 4.4x (Mar 2011, RM0.122)
Growth 1.3%(2012), 3.0%(2013)
Gearing high (due to borrowed money to lend out)
Gross dividend yield 3.8%
The above figures are from RHB RCE Capital research report.

One concern for RCE Capital is the issue of their largest borrower Kowaja, which the loan disbursement has been curtailed since 1 Dec 2010.

RCE PE ratio is superb superb low. At 4.4x is so cheap.
If many years ago, I would have bought RCE Cap immediately because the PE ratio is so low.
But now when I got this PEGGY Method, I need to look at other things, such as growth, etc.
Maybank RCE Capital target price fair value is RM0.45 (sell)

According to RHB, the growth is also low.
For me, I consider the dividend is low. Not because 3.8% is low, but RCE Capital make so much money but pay so little dividend. Where the money goes? Reinvest? If reinvest, I expect the profit to grow. But the growth is so low.

You may also buy RCECap if you want. RCE Cap PE ratio is so low and with some dividend. RHB have a VERY HIGH RCECap target price fair value of RM0.92 (buy/Outperform).

Up to individuals to decide.

More info on RCE Capital.
http://politemarket.blogspot.com/search/label/RCECAP


More info on current IPO
http://politemarket.blogspot.com/search/label/IPO


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Wednesday, February 23, 2011

Genting Singapore Share Price Target Fair Value

Genting Singapore 4th Quarter result is mostly as what average analysts have forecast. Some said below, some said above. The loss is due to an impairment charge it took on its discontinued UK casino operations

Let us do a quick PEGGY Method evaluation:
PE: PE Ratio
G: Growth
G: Gearing
Y: Yield (dividend)

PE Ratio 27.1x (S$0.073, Dec 2010)
Growth 24.3%(2011) 21.6%(2012) 15.0%(2013)
Gearing net cash 2012.
No dividend.
The above figures from RHB Genting Singapore research report.

PE ratio is high, no cheap bargain. But the growth is high.
As long as Genting Singapore can grow, hopefully the Genting Singapore share price will continue to grow. But If Genting Singapore is not growing, then the price probably may come down and you are not receiving any dividend.

Genting Singapore target price fair value S$2.30 - RHB market perform
Genting Singapore target price fair value S$2.51 - OSk BUY

The Edge Singapore:
Genting Singapore Plc, the world’s third-biggest casino company by market value. The net loss widened to $150.3 million in the three months ended December from $101.7 million a year earlier, the company said yesterday in a statement to Singapore’s stock exchange. Loss due to an impairment charge it took on its discontinued UK casino operations

For the full year, Genting Singapore posted a $37.8 million profit compared with a loss of $277.6 million a year earlier, missing the $615 million average estimate of 21 analysts surveyed by Bloomberg.

The “gaming market momentum is slowing, we see more competition,” David Ng and Michelle Lee, analysts at Goldman Sachs Group Inc., said in a report today and reiterated their recommendation to sell the Singapore company’s shares. “We had expected more growth, given the continued ramp-up, and still novelty factor, but instead, it appears mass could be hitting near-term saturation.”

Genting Singapore and Las Vegas Sands Corp. opened the city-state’s two casino-resorts last year, competing for Asia’s biggest gamblers. Genting Singapore’s profit margin narrowed for its VIP business as high-stakes gamblers won more than in the previous three-month period. It also paid down interest on its S$207.9 million loan to finance the property.


More info on Genting Singapore
http://politemarket.blogspot.com/search/label/Genting%20Singapore






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Tuesday, February 22, 2011

ManagePay Systems IPO

ManagePay Systems Berhad IPO
ManagePay Systems Share IPO Opening 22-02-11

Managepay IPO Closing 02-03-11
ManagePay IPO price RM 0.16
ManagePay IPO issuing house MIDF 637
ACE Market Tentative listing date 15-03-11

INITIAL PUBLIC OFFERING OF 45,758,000 NEW ORDINARY SHARES OF RM0.10 EACH IN CONJUNCTION WITH OUR LISTING ON THE ACE MARKET OF BURSA MALAYSIA SECURITIES BERHAD COMPRISING:

(I) 32,946,000 NEW ORDINARY SHARES OF RM0.10 EACH BY WAY OF PRIVATE PLACEMENT TO THE IDENTIFIED INVESTORS;

(II) 3,660,000 NEW ORDINARY SHARES OF RM0.10 EACH AVAILABLE FOR APPLICATION BY OUR ELIGIBLE EMPLOYEES; AND

(III) 9,152,000 NEW ORDINARY SHARES OF RM0.10 EACH AVAILABLE FOR APPLICATION BY THE MALAYSIAN PUBLIC;

AT AN ISSUE PRICE OF RM0.16 PER ORDINARY SHARE PAYABLE IN FULL UPON APPLICATION.

From ManagePay System:

The Company was incorporated in Malaysia as a private limited company under the name of ManagePay Systems Sdn Bhd.

The history of the Group begun from the incorporation of MPSB. In 2000, MPSB started as technology solutions provider focusing on a variety of ICT and technology-related business activities such as Java software development, e-business consultancy services, telecommunication equipment sales and Smart Card technologies for mobile operators.

Group of Companies
Multimedia Prospect Sdn Bhd
MPSB was established in the year 2000, with a main goal of offering Medium and Large Enterprises and Industries tremendous business development opportunities by reaping the advantages of technology.

MPSB channels its enormous investment to Research and Development (R&D), an area which is led by highly qualified experts. A workforce of forty professionals with various distinctive expertises strives to provide outstanding business solutions and fulfill competitive requirements of the corporate world.

MPSB invests above industry average in terms of percentage of sales revenue in R&D and thus developing a broad range of innovative products; MPSB is responsive to the needs of a changing industry. Since its inception, MPSB's cumulative investment in R&D programs exceeds RM6,000,00.00.

Sina Technologies Sdn Bhd (Sinatec)
Sinatec focuses on building engineering expertise on Microsoft platform. With a number of Microsoft Certified Professionals, the company has acquired the status of Microsoft Certified Partner since 2001, 3 months after it started its business operation.

Sinatec has set its goals to develop a few Microsoft Certified Products in the office and sales automation areas as well as ERP and POS solutions in the back office. To dates, we have numerous successes in deploying our in-house products and services such as Customer Loyalty Management System (CLMS), Enterprise Resource Planning System, ISO Manager, POS Retail Management System, POS Connecter and etc.

In year 2007, Sinatec has secured a Build-Operate-Own (BOO) contract with a Malaysia Anchor Bank EON Bank Group Credit Card Centres to provide End-to-End Business Operation Support Services for VISA powered MATTA Card issued by EON Bank Group. MATTA Card is an Three-In-One Credit Card (Credit+Discount+Loyalty) designed exclusively for Malaysia Tour and Travel Industry. MATTA, Malaysia Association of Tour and Travel Agents has a member base in excess of 2000 members focusing on in-bound and out-bound travel related services.

Whatdevice (M) Sdn Bhd (Whatdevice)
Whatdevice operates in-house EMV card personalization solution which is integral part of the EMV Card Issuance Services. Our clienteles include EON Bank Credit Card Centre and Southern Bank Credit Card Centre (BOT) and smaller issuance companies who are required to personalize their co-brand card instantly.

Whatdevice in-house facility in EON Bank is designed to meet the requirements for mass issuance production of EMV cards when connecting to high throughput personalization machines. We have developed an industrial-scaled system based on our many years of experiences in the area of card issuance.

Whatdevice incorporates products and services from leading and mature EMV Card Personalization suppliers such as with NBS Technologies, Giesecke & Devrient, Orga, Matica and Oberthur.

More info on IPO
http://politemarket.blogspot.com/search/label/IPO

MBMR Share Price Target Fair Value - Why Profits Exceed Expectation but get a lower fair value

MBMR Share price is RM3.22

MBMR recently announced an excellent result, with the profits exceed RHB and most analysts' expectation.

Let us do a simple PEGGY Method evaluation

PE: PE Ratio
G: Growth
G: Gearing
Y: Yield (dividend)

MBMR PE Ratio is 5.6x (RM0.575, December 2010)
Growth 5.6%(2011), 2.9%(2012), 4.9%(2013)
Gearing - Net cash
Dividend yield 4%

The above figures is by RHB.
MBMR PE ratio is superb low, the lowest in car industry.
You are getting 4% dividend yield and MBMR is a well managed company with net cash.
But according to RHB the growth is low.

I got one question.
The profits exceed RHB expectation, but RHB cut the fair value to RM3.95 (from RM4.96) after ascribing a lower 6.5x target PER (from 8.5x) due to low 2010-2013 growth.
If you read my previous MBMR post, RHB already know that the growth is low. Why at that time still give a high fair value? Why after profits exceed expectation then only cut the fair value. I really don't understand.

Polite Market's Comment:
I heard 2011 they will launch the new MYVi, not sure.
MBMR is cheap but the growth is low, as per what RHB said.
With the AFTA coming soon, up to individuals to judge on the growth rate and whether worth to buy.

MBMR fair value RM3.95 RHB
MBMR target price RM5.00 OSK
MBMR target price RM4.30 MIDF

Previous posts and more info on MBMR.
http://politemarket.blogspot.com/search/label/MBMR

Monday, February 21, 2011

KLCI PE Ratio

In my earlier post, I mentioned that it is tough for FBMKLCI to hit 1700 points.
Have a look at the below and you will know why.

PE Ratio end of 2010, and gain/(loss) in 2010.

KLCI PE Ratio 17.4 times, up 20.9%
Singapore FSSTI PE ratio 12.7x, up 10.1%
Hong Kong Hang Seng Index PE Ratio 12.4x, up 5.3%
China SSE PE Ratio 18.1x, loss 13.7%
Korea KOSPI PE ratio 14.1x, up 22.5%
US Dow Jones PE ratio 14.1x, up 11.0%

As you can see, The KLCI already up 20.9% in 2010.
Malaysia stock market FBM KLCI PE ratio is one of the highest PE ratio. KLCI PE ratio of 17.4x is not cheap.
China PE ratio is 18.1x, but I think the growth rate can justify the high PE ratio.

What do you think of the growth rate of Malaysia KLCI companies? Can the growth rate be higher than Hong Kong or Singapore or Korea or Dow Jones?

In my personal opinion, I think KLCI is expensive as compared with other countries.
When investing in KLCI stocks, please evaluate carefully.

More info on KLCI PE ratio... here . .
http://politemarket.blogspot.com/search/label/KLCI%20PE%20Ratio


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Sunday, February 20, 2011

Gold Demand hit 10-Year High

Demand for gold reached a 10-year high with spending reaching a value of US$150bn (£93bn) in 2010, as Chinese and Indian consumers increased jewellery purchases and the world's central banks became net buyers for the first time in more than two decades.

Figures from the World Gold Council showed demand for jewellery grew 17% over the 12-month period, while overall demand for gold was up 9% despite record prices for the precious metal.

On Thursday the value of gold rose for the fourth day in a row to hit $1,378 an ounce, as investors piled into the commodity as a safe haven amid increased political instability in the Middle East.

Chinese jewellery demand last year reached a record figure of 428 tonnes while Indian jewellery needs were raised by just under 70% after a dip in the market during 2009 caused by recession.

Consumers in these two countries now account for more than half of the global jewellery and coin demand, with further growth anticipated this year while the trend in key western markets such as the US is down.

Central banks in a wide range of developing countries including China, Russia and Thailand have been buying gold in a bid to preserve their growing national wealth and diversify their investment holdings.
European central banks had been gradually selling off their gold reserves but this policy was reversed once the sovereign debt crisis hit and politicians became risk-averse. The Star/ Guardian

More info on Gold, Advantages / Disadvantages, etc...
http://politemarket.blogspot.com/search/label/Gold

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Friday, February 18, 2011

Berjaya Food Berhad IPO - BJFood IPO

Berjaya Food Berhad IPO
Opening 18-02-11
Closing 25-02-11
BJFood IPO price RM 0.51
Issuing house MIH 509
Main Market
Tentative Listing Date 08-03-11 *
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OFFER FOR SALE OF 35,837,000 ORDINARY SHARES OF RM0.50 EACH IN BERJAYA FOOD BERHAD (“OFFER SHARES”) COMPRISING:-
-
(A) 14,134,800 OFFER SHARES AVAILABLE FOR PLACEMENT TO BUMIPUTERA INVESTORS APPROVED BY THE MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY;
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(B) 9,734,800 OFFER SHARES AVAILABLE FOR PRIVATE PLACEMENT TO SELECTED INVESTORS;
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(C) 3,533,700 OFFER SHARES AVAILABLE FOR APPLICATION BY THE BUMIPUTERA PUBLIC;
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(D) 3,533,700 OFFER SHARES AVAILABLE FOR APPLICATION BY THE MALAYSIAN PUBLIC; AND
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(E) 4,900,000 OFFER SHARES AVAILABLE FOR APPLICATION BY THE ELIGIBLE DIRECTORS, EMPLOYEES AND BUSINESS ASSOCIATES OF BERJAYA FOOD BERHAD AND ITS SUBSIDIARY,
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AT AN OFFER PRICE OF RM0.51 PER OFFER SHARE PAYABLE IN FULL UPON APPLICATION PURSUANT TO THE LISTING OF BERJAYA FOOD BERHAD ON THE MAIN MARKET OF BURSA MALAYSIA SECURITIES BERHAD
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18 February 2011- Business Times/BERNAMA

Berjaya Food Bhd, en-route for listing on the Main Market of Bursa Malaysia Securities Bhd next month, expects to raise RM18.3 million from its initial public offering (IPO).

The operator of Kenny Rogers Roasters restaurants in Malaysia said the proceeds would accrue entirely to the offeror, Berjaya Group Bhd.

The company listing is scheduled for March 8 with a market capitalisation of about RM72.1 million.

Speaking at the launch of its prospectus here today, Berjaya Food Chief Executive Officer Datuk Francis Lee said the company targeted to open between eight and 10 new restaurants each year.

He said the company also aimed to increase the number of company-owned restaurants to 67 by financial year ending April 30, 2012.

To-date, 65 Kenny Rogers Roasters restaurants operate nationwide, of which 52 are owned by Berjaya Food while the remaining 13 are owned by independent franchisees.

"We are very excited about our future prospects. The local food service market is expected to grow in the coming years, driven by the increase in the average Malaysian consumption spending and the growing trend of eating out," he said.

The IPO entails an offer for sale of 35.8 million ordinary shares of 50 sen each, representing 25.35 per cent equity interest in Berjaya Food, at an issued price of 51 sen.

Applications for the IPO opened today and will close at 5pm on Feb 25.

More info on IPO
http://politemarket.blogspot.com/search/label/IPO

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Zhulian Share Price Traget Fair Value RM2.50

Let us look at Zhulian current figures by using PEGGY Method:

PE: PE Ratio
G: Growth
G: Gearing
Y: Yield (dividend)

Zhulian share price is RM1.75
Zhulian PE ratio 9.2x (EPS RM0.189 Nov 2010).
Growth 12.2%(2011),  15.1%(2012), 12.7%(2013).
Zhulian Earnings per share will be RM0.275 in 2013.
Gearing: Net cash
Net Dividend yield 6.5% (60% payout ratio).
The above figures taken from HwangDBS with Zhulian target price fair value RM2.50

What you get from buying Zhulian?
PE ratio is not expensive, but not really cheap.
Decent growth rate of above 10% for the next three years.
Net cash. Good net dividend yield.
Zhulian dividend payout ratio is 60%, they will pay out 60% of profit as dividend. More profit more dividend, no need to guess.


My concern:
Last two quarters the result is below analysts' expectation. I think that is why the share price was down.
Can Zhulian achieve the growth?

According to HwangDBS, Zhulian is setting up a subsidiary in Laos (95% stake) with a local joint-venture partner (5%). This could trigger the next leg of growth, given the saturated Malaysian market. It will replicate its successful Thailand model (43% sales CAGR in FY06-10) in Laos, as the countries have similar religion, culture, and economic activities. Moreover,
Zhulian will hold a controlling stake, unlike in Thailand where the government capped it at associate stake.

HwangDBS have yet to factor in any contribution from Laos but estimate that Laos could potentially add RM30m p.a. to Group revenue (9% of FY10) and RM7.5m to net profit (8.6%), assuming 34k distributors (0.5% of population), RM900 sales per distributor, and 25% net margins.

Before factoring Laos contribution, the figure already looks ok.
They may expand into Vietnam and Cambodia market.

Zhulian Target Price fair value RM2.18 by ZJ Research - BUY (16/02/2011).
Zhulian Target Price fair value RM2.38 by OSK - BUY


Polite Market's comment:
Base on the figures given by HwangDBS, Zhulian is fairly attractive.
Above 10% growth with good dividend.
I have no worry on the dividend because of 60% payout ratio, but whether Zhulian can achieve the growth forecast by HwangDBS?

1) If you think can achieve, then can consider.
2) If you think not sure, but you think they can maintain the profit and you are ok with 6.5% dividend yield, then can consider.
3) If you doubt their growth and you think the dividend yield is not good enough for the risk that you take, then forget it.

Up to individuals to make decision.


For more info on Dividend Payout Ratio...
http://politemarket.blogspot.com/search/label/Dividend%20Payout%20Ratio

For more info on Zhulian share.
http://politemarket.blogspot.com/search/label/Zhulian

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Thursday, February 17, 2011

How to compute theoretical Ex Price

How to compute theoretical ex price.
Many of my friends ask me how to calculate theoretical ex price. I thought it will be useful to post in my blog so that others can also benefit.
To compute ex price, there are two major factors:
A) No gain No loss
B) Theory only

Example: Dividend
HWGB to pay RM0.20 dividend
Ex Date: 28/01/2011.
Therefore, the dividend cum date is 27/01/2011.
27/01/2011 HWGB closing price is RM10.00
The theoretical ex price will be RM9.80
If you hold 1 share of HWGB, on 27/01/2011 your TOTAL value is RM10.00.
On ex date 28/01/2011, your TOTAL value is RM9.80 + RM0.20 (dividend) = RM10.00. Therefore no loss no gain.

This is just theory, in reality some dividend got tax, some no tax and different people got different tax rate and may get rebate. The price is also subject to demand and supply.
By using the two factors of A) No gain no loss and B) Theory only, HWGB theoretical ex price will be RM9.80.
If HWGB share price close at RM9.85 on 28/01/2011, then on 28/01/2011 HWGB share price is UP RM0.05 and NOT down RM0.15.

Example: Bonus Issue.
Every 5 shares get 1 bonus.
Ex Date: 28/01/2011.
Cum date is 27/01/2011.
27/01/2011 SAAG closing price is RM9.00
Every 5 will get extra 1, so will end up having 6.
Then use RM7.00 X 5 and divided by 6 = RM7.50.

Another method to compute is…..
Assuming you hold 1000 SAAG shares. Your TOTAL value is RM9000 (1000 X RM9).
After bonus you will have 1200 SAAG shares, ex price will be RM9000 divided by 1200  = RM7.50
No gain no loss.

More complicated: Rights Issue
Every 5 will entitle to subscribe 1 rights issue at RM3.00
Ex Date: 28/01/2011.
Cum date is 27/01/2011.
HWATAI closing price is RM9.00

Assuming you hold 1000 HWATAI shares. Your TOTAL value is RM9000 (1000 X RM9).
You are entitled 200 rights issue (1000 divided by 5), and you need to pay RM600 (200 X RM3.00).
Now your TOTAL VALUE/ COST is RM9000 + RM600 = RM9600
You will end up having 1200 HWATAI shares.
Theoretical ex price = RM9600 divided by 1200 = RM8.00
No gain no loss.

Let me rephrase. You paid RM9000 to get your 1000 HWATAI shares, and paid further RM600 to get 200 shares. Your total cost/value is RM9600.
Now that in theory, the price is RM8.00. You sold ALL your 1200 shares at RM8.00 you will get RM9600. No gain no loss for you.

I think that’s all for the day.
Next time I will post on Free warrants, Rights with Warrant, etc.

my blog link....
http://politemarket.blogspot.com/

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Wednesday, February 16, 2011

Pantech-LA yield is 6.08% not 4.7%

Pantech-LA price is RM0.115, the interest is RM0.007.
With the price at RM0.115 divided by RM0.007, the yield is 6.08%.
No matter Pantech make small or big profit, they still need to pay the RM0.007 interest.
In my previous post, I put the yield as 4.7%, which is a typo error.
At current price of RM0.115 with the yield of 6.08%,  Pantech-LA is quite attractive but not really cheap.

Previous post on Pantech here...
http://politemarket.blogspot.com/2011/02/pantech-la-loan-stock-iculs-buy-iculs.html


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52 Ways of Making Money in Stock Market - Part 07/52- General Offer

General Offer
General Offer is where the offeror made an offer to buy the remaining shares that it does not owned.
Example ABC Ltd currently hold 29% of Stock X. Stock X price is $0.50.
ABC Ltd (the offeror) makes an offer to all existing shareholder of Stock X at $0.60. When the news are out, then Stock X price will shoot up to near $0.60, example $0.585.
If Mr Z is existing Stock A shareholder, he can choose to accept the offer at $0.60 or he can sell it through the market at $0.585.
 
How you can make money through this. If can buy the Stock X at $0.585 and accept the offer at $0.60. You make 2.56%, minus brokerage, then you make more than 2% within two to three months.

Two extra benefit that you may get is i) if not many people take up the offer, the offeror may revise the offer. So you make more than 2.56%. ii) depending on the fair value of the company, the share price may trade higher than the GO price.

I saw one big company always do this. Don’t know what company is that, but after the GO was announced, they will buy very large quantity and accept the offer. Because they are buying large quantity, they have to make announcement. I saw their name few times.

Depend on the complexity / conditions of the offer, some take longer time and some take shorter time. A formal GO take about 2 to 3 months. That means your money will be stuck and you may miss other investment opportunity. Once all the conditions are met, the offer become Unconditional and the offeror will have to pay you within 21 days from the day you accepted the offer.
Most counters after the GO is announced, the buying and the seller quotes are quite stable/stagnant already. Example many people queing to buy at $0.585, so you may have to offer higher price or you may need to que. Higher price means less profit.

Most of the times the percentage of profit is very low. You may get lower than 1%. You may feel not worth of doing it. However there are many Fund Manager or big company doing it because it is much higher than putting in FD. Assuming FD rate of 2.4% per year, one month is only about 0.2%++ .


RISKS, LIMITATIONS AND DIFFICULTIES
One major risk is that if the condition of the offer is not met, then the deal may be aborted and the price may drop back to somewhere near the price before GO announcement.

Example of General Offer conditions is where Offeror have to get more than 75% of the company total shares before the deadline. Other conditions such as the offer has to be approved by Securities Commission and Offeror’s own shareholders.

However, not all counters prices will drop if the deal is aborted. Example in 2010, MRCB share price went up higher than the GO price even after the GO was aborted. You may have to check what is the fair value of the company. In this case, many research analysts said MRCB fair value is higher than the GO price.
 
OPINION:
Go for it if i)it meets your investment % return, ii)you can take the risk if the deal is aborted, iii)you don’t need the money before they pay you, iv)the fair value of the company is high and you may not lose much is the deal is aborted.
Because I am using Dollar Cost Averaging, I can plan out my cash flow. I have accepted many General Offer and it is much better than put in FD.
 
Please bookmark me and visit me again.
More info on 52 Ways of Making Money in Stock Market.....
http://politemarket.blogspot.com/search/label/52%20Ways%20of%20Making%20Money%20in%20Stock%20Market
 

Pantech-LA Loan Stock ICULS - Buy ICULS or Buy Patench

A: Hi, I heard Asia Analytica Sdn Bhd recommend to buy Pantech.
B: You can consider Pantech loan stock.
A: What are the advantages?

B:
1)Pantech-LA pays you 7% interest per year, that is RM0.007. Pantech-LA share price is RM0.115, the yield is 6.08%%. No matter Pantech make big or small profit, they still need to pay you RM0.007 interest.
3)Pantech is a good stock recommended by Asia Analytica and OSK. If Pantech share price move up, Pantech loan stock price will also move up.
2)If Pantech share price comes down and you manage to buy at RM0.10, the yield will increase to 7%. The lower the price you buy, the higher the yield. Therefore, many people willing to buy if the price drop and it provide support to Pantech loan stock price.
4)The minimum brokerage is RM2 only, whether key-in internet online or key-in by remisier/dealer. Small retail investors like loan stock because they can save on brokerage.

A: What is Pantech Loan Stock maturity date?
B: 21/12/2017. Six loan stocks covert into one Pantech share.
A: You mean can buy Pantech-LA?
B: First, you need to know whether Pantech is a good stock. If yes, then you may consider to buy Pantech or Pantech-LA. You must look at the conversion ratio whether is there any discount or whether you are willing to buy at a premium.

For more info on Pantech, here.....
http://politemarket.blogspot.com/search/label/Pantech

Note:
Amendment. Due to typo error, the the yield was amended from 4.7% to 6.08%, thanks maswealth88 for highlighting.


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Sunday, February 13, 2011

Pantech Share Target Price Fair Value RM0.79

Pantech Share.
Let us do a quick PEGGY Method evaluation
PE: PE ratio
G: Growth
G: Gearing
Y: Yield (dividend)

Pantech share price RM0.655
PE ratio is 13.8x (Feb 2011, RM0.0473).
Growth 31.6% (2012), 19.6% (2013).
Gearing minimum
Dividend yield (net) 4.1%

The above figure is provided by Asia Analytica Sdn Bhd, with BUY recommedation.
However, I have changed the PE ratio. This is because Asia Analytical use 451.9 million Pantech total number of shares, whereas I use 649 million total Pantech share fully diluted for Pantech warrant and Pantech ICULS loan stock. I prefer more prudent.

If Pantech can achieve Asia Analytica forecast, I think this is good stock. Although the stock is NOT cheap trading at 13.8x PE ratio, but it has strong growth. Gearing is manageable and net dividend yield is 4.1%.

PANTECH GROUP HOLDINGS BERHAD is an oil and gas counter.
I didn't follow this stock, and I am not sure whether the forecast is consistent or JUST RECENTLY adjusted up due to recent run in oil and gas counters.

If you trust Asia Analytica forecast, then you can consider this counter. For info, Pantech Share Target Price Fair Value RM0.79 by OSK, I could find any target from Asia Analytical.

Up to individuals to make decision.

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52 Ways of Making Money in Stock Market - Part 06/52 - Invest in Rumours

Rumours
Many people actually buy stocks based on rumours and make money. That’s why you see the volume of the stock has increased when the rumours are out.

Not all rumours are false. Half of it can be true. Most of the rumors can be found in newspaper.

In 2010, many individuals and newspapers everywhere talking about Astro privatization rumours. Then it turned out to be true. Then they talk about Measat, real again. PLUS privatisation, real again. IJMLand merging with MRCB, real again. Someone buying Jerneh, real again.

Rumours will give you extra reason to buy. There was once a Research company recommended Stock A with good fundamental, can’t remember the name. I was interested, but just watching. Then there was news about this company in newspaper, but not sure whether is real, but I just bought it. The next day the stock got suspended and got announcement of corporate exercise.

First, investors will make money if the rumour is real.
Second, if the rumour is false, investors are still buying a good counter.

In bull market, even if it is not true, price may also keep going up. Most counters need this kind of news to create volume for the price to go up.



RISKS, LIMITATIONS OR DIFFICULTIES:
You need to check whether the price has already run up a lot. If yes, then if the rumours are false, it will fall very hard. If the fundamental of the company is not strong, then the price will be going lower and lower.

You may need to assess the chances of the rumours, whether it is likely to happen. Rumours about buying a company.... Eg company with high debt to buy another big company, less likely to happen. But company with huge cash more likely to happen.

What are the track records of the person who tell you the rumors. If he always wrong, you still want to believe in him? Where is his source, from newspaper or what? Who told him?

Many unwilling to cut loss or assess the stock before they buy. Many ended up with huge losses.

OPINION:
Buy only when the fundamental is good. The rumours give you an extra reason to buy.

IMPORTANT NOTE:
I am not here to tell you to buy based on rumours. Rumours are illegal. My view is buy fundamental stock.

I am just sharing my experience that based on historical records, many rumors had turned out to be true. If fundamental stock got rumours, based on historical records, in theory it will be better than without rumours.


Please bookmark me. More on 52 Ways of Making Money in Stock Market....
http://politemarket.blogspot.com/search/label/52%20Ways%20of%20Making%20Money%20in%20Stock%20Market

Friday, February 11, 2011

Stock Market Pregnancy Love Dating Lady and X !!! 11/11/11

Stock market is usually about 6 months earlier or faster than actual news. This is what I have learned from my father.
Full term pregnancy is considered 40 weeks counted from the first day of a woman last period. Make love now, and baby may be born 38 weeks later. This is what I have learned from my mother.

Let me explain the TWO.
When we buy or sell shares now, it is not about the how much profit the company earns now or how much our economy grow in current month. Our decision is made base on what we forecast on 6 months later.

In late 2008, my friend told me not to enter stock market, even in 2009. He said Malaysia will enter real recession in 2009 and the stock market will be worse than 2008. He was right on the economy but wrong on the stock market. In 2009, even the economy result was worse than 2008, our stock market ignore the negative news. Why? Because 6 months ago the stock market already predicted the result will worse and end of 2009 the economy will recover.

That is why some company when they announced good profit the share price didn't move up, because many already predicted that 6 months ago and the share price already up 6 months ago.

Exception is the announcement of result exceed or below prediction, and the share price will move up down immediately after the announcement.

On pregnancy. If you want your baby to be born on 11 November 2011 (11/11/11), make love after Valentine's Day. Assuming the lady first day of period is 1 February 2011, and the fertile day is 14 February, make love on 14 Feb and the baby probably will be born on 8/11/2011. Too early.

Depending on the lady first day of period and fertile days, it is better to make love end of February or in March. If your baby is not full 40 weeks on 11/11/11, you can still ask your doctor to schedule your baby to be born slightly earlier.

Anyway, you can always make love on this Valentine's Day but not to plan for the baby if you want your baby to be born on 11/11/11.


PoliteMarket's Comment:
When you are making decision to buy or sell shares, remember that generally the stock market will react what will happen ABOUT 6 months later. Exception is latest announcement exceed or below estimate or forecast. Therefore, you NEED TO THINK AHEAD.

As for pregnancy planning, although I have knowledge, you have to consult doctor / gynae.

Wishing you all the best in stock market money making and baby or love making.

My Blog...   http://politemarket.blogspot.com/

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Wednesday, February 9, 2011

FBM KLCI index target for 2011

Few weeks ago, I have compiled a few KLCI target for 2011. But I didn't want to post in my blog at that time. This is because first two weeks or January 2011 the market was very bullish. Most of the KLCI target is very high and it may mislead my blog readers.

Then starting mid of January the market starting to come down. If I post it then, many will laugh at the high KLCI target.

Now, I think the market is considered stabilized and I think it is time to post now before it is too late.


Here are the compilations:
FBM KLCI index target of 1,790 (December 2011)
Deutsche Bank AG/17 January 2011
Further upside risk to earnings in 2011 as commodity prices stay lofty, M&A activity accelerates further, and earnings from offshore entities have an impact.


FBMKLCI to hit 1,710 by year-end 2011: Maybank, 3/1/2011 Business Times
FTSE Bursa Malaysia KLCI Index.
The 30-member index will rally on stronger corporate earnings and liquidity flows into emerging markets, Maybank.


Citigroup: FBMKLCI may hit 1,650 by year-end 2011
BizTime 07/01/2011
Malaysia’s KLCI index may reach 1,650 by the end of 2011 on increased liquidity, Citigroup Inc said.
The government is “likely to provide liquidity” to the stock market ahead of the Sarawak state election and possible national general election, according to the report led by analyst Yong Yin Ng. -- Bloomberg




FBMKLCI may rise above 1,781 in H1: UOB   05/01/2010
Malaysia’s benchmark stock index may “stampede” beyond 1,781 in the first half of the year, bolstered by an inflow of foreign funds and rising expectations of an early general election, according to UOB Kay Hian Group.
A stronger ringgit, higher commodity prices and a “firm” economic outlook will also help boost the stock market, Vincent Khoo, an analyst at OUB Kay Hian said in a report today. Still, the market faces a “wild ride” as the upside potential may be “lassoed” in the second half of the year, bringing his target for the index to end at 1,654 by the end of the year, he said.
-- Bloomberg


HwangDBS sees CI hitting 1,730 by year-end 2011
Malaysia’s benchmark FTSE Bursa Malaysia KLCI Index is expected to rise to 1,730 by the end of the year because of “positive” domestic factors, according to HwangDBS Vickers Research Sdn Bhd. - Bloomberg




FBM KLCI to hit 1,650 at end-2011: ECM 2/12/2010
ECM Libra maintains its base-case FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) target of 1,480 and 1,650 at the end of next year though the FBM KLCI retraced by about three per cent since hitting a high of 1,528.01 three weeks ago.
While the market seems to be fairly valued, it is still positive in the near term as foreign net equity inflows remain strong, said ECM LIbra.
"We are unfazed by it and believe the market will continue its uptrend in a more meaningful manner in the first quarter of 2011.
"This is driven by resilient domestic consumption, strong foreign net equity inflows, merger and acquisition activities and pre-election play," it said.
In the best scenario, ECM Libra said FBM KLCI could potentially touch 1,870 by end of next year 2011 based on 17 times should the current liquidity-driven rally continue into 2011. -- Bernama



POLITEMARKET's Comments:
You think can break 1700 as what most analysts have forecast? It is tough but achievable. Why I say it is tough. Later I will post the KLCI PE ratio and you will know why.

Tuesday, February 8, 2011

CI Holdings Target Price Fair Value RM3.88 or RM4.37?

CI Holdings just announced a very good result. Second quarter net profit grew 42.7% year on year. But got TWO major issues.

Before we look at the issues, let us do my PEGGY Method evaluation:

PE: PE Ratio
G: Growth
G: Gearing
Y: Yield (dividend)

CI Holdings share price RM3.51.

CI Holdings PE ratio 14.0x (EPS RM0.268, Jun 2010), growth 10.9% (2011), 0.6% (2012), negative 3.9% (2013). Net cash in 2012. Dividend yield 2.5% in 2011.
The above figure is provided by RHB with CI Holdings target price fair value RM3.88

Two Major Issues:
First, on 27 Jan 2011, RHB CI Holdings target price fair value is RM4.90, but on 28 Jan 2011 RHB change the target price to RM3.88. Why? Because CI Holdings told analysts that they no longer enjoy sugar subsidies. Without sugar subsidies, RHB cut CI Holdings fair value from RM4.90 to RM3.88, HUGE !!!!
For info, due to sugar subsidies cut, OSK reduce CI Holdings fair value from RM4.47 to RM4.37 (BUY recommendation), just RM0.10, but why RHB cut so much?

Second issue is email. There is a email circulating around about CI Holdings.


My question is, why CI Holdings share price is under selling pressure recently? It is because of sugar subsidies or email? When can rebound? All news diluted?

More info on CI Holdings...
http://politemarket.blogspot.com/search/label/CI%20Holdings


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Imaspro Share Price Target Fair Value - Buy? Cash RM0.50

Imaspro share price RM0.92.

PEGGY Method Evaluation:
PE: PE ratio
G: Growth
G: Gearing
Y: Yield (dividend)

Imaspro PE ratio 8.9x (Jun 2010 , EPS RM0.103)
Growth 18.2% (2011)
Gearing net cash
Dividend yield 5.1%
The above figures are by CIMB, with Imaspro target price fair value RM1.28, BUY recommendation.


According to CIMB, the cash per share is about RM0.50. That is more than half of Imaspro share price. The huge cash will help Imaspro to grow, eg buying other business, entering new market or develop new product. They may give higher dividend.

With so much cash, I think it is worth to look at Imaspro. However, all these are up to the Imaspro directors how to use the cash, or whether they will use the cash in the short term. May need to hold

More on Imaspro....
http://politemarket.blogspot.com/search/label/Imaspro

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Monday, February 7, 2011

Wilson & York - Huayang very cheap to buy

In my earlier post, I said that I don’t have much info on Hua Yang share. Now I got it.
It is by Wilson & York, recommendation is BUY with Huayang target price fair value at RM1.60.

Hua Yang share price: RM1.10

Let us do a quick PEGGY Method evaluation:
PE: PE ratio
G: Growth
G: Gearing
Y: Yield (dividend)

PE ratio is 5.2x (Mar 2011, EPS RM0.212).
Growth of 40% to 2012.
Net Gearing manageable at 20%++ (by RHB)
Dividend yield 1.7%.
Above figure is by Wilson & York

Except the dividend which is on the low side, Huayang share offer very low PE ratio with decent growth. PE Ratio will drop to 3.2x in 2013!!

Wilson & York made a comparison with similar size companies that are in same industry, Crescendo Corp Bhd, Encorp, A&M Realty Bhd.

Huayang PE ratio is the lowest 5.2x. Crescendo Corp Bhd (9.7x), Encorp (10.1x), A&M Realty Bhd (11.3x).
Huayang Price to book value (0.5x). Crescendo Corp Bhd (0.5x), Encorp (0.6x), A&M Realty Bhd (0.4x).
Huayang dividend yield is the lowest 1.7%. Crescendo Corp Bhd (4.9%), Encorp (5.1%), A&M Realty Bhd (3.7%).

Hua Yang net profit margin is the highest 13.9%. Crescendo Corp Bhd (13.8%), Encorp (7.2%), A&M Realty Bhd (10.4%).
Hua Yang ROE is the highest 10.5%. Crescendo Corp Bhd (5.3%), Encorp (6.2%), A&M Realty Bhd (3.6%).

Polite Market’s Comment:
Huayang share is cheap base on very low PE ratio with decent growth, if you don’t mind the low dividend.

More on Huayang and the disadvantages here….
http://politemarket.blogspot.com/search/label/Hua%20Yang


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Friday, February 4, 2011

Stocks With Highest Target Price Upside Potential

The followings are the stocks with Trading Buy or Outperform recommendation by RHB as at end of January 2011.
I pick those stocks with the highest target price fair value upside.

Stock, Price, target Price, percentage upside
Evergreen 1.41 2.57 82%
RCE Capital 0.54 0.95 76%
MBM 3.23 4.96 54%
KSL 1.83 2.78 52%
Freight Mgmt 1.05 1.57 50%
ILB 1.00 1.47 47%
CBIP 4.00 5.65 41%
Dialog 2.00 2.82 41%
Genting M'sia 3.25 4.5 38%
MediaChinese 0.87 1.2 38%
TH Plantation 1.99 2.7 36%
Kossan 3.18 4.25 34%
IOI Corp 5.77 7.65 33%
MAHB 6.12 8.02 31%
KNM 2.90 3.78 30%
Suncity 4.50 5.85 30%
Paramount 4.60 5.92 29%


Evergreen. For many years always have high target price, but the price just cannot go higher, I don't know why.
RCE Capital is hit by recent pull out of major customer.
MBMR share, the lowest PE ratio stock in automotive industry.
KSL share, good.
Freight Management share, good.
ILB, profit always below analyst estimate. But don't know why analyst always put a high target price on ILB.
CBIP, no comment.
Dialog. The target price recently adjusted upward due to strong interest in oil and gas stocks.
Genting Malaysia share. Many analysts are having different forecast on GenM, some said buy some said sell.
Media Chinese share, no comment.
TH Plantation share. Only started coverage by RHB few months ago, not yet take a look.
Kossan share, different analysts have different view on glove industry, some said good some said bad.
IOI Corp, will take a look soon.
MAHB share, no comment.
KNM share. When price was low, many analysts ask to sell. Now the price up so much, ask to buy. No comment.
Suncity share, pending corporate exercise with Sunway bhd.
Paramount share, good.

I have some old and updated write up on some of these stocks...
http://politemarket.blogspot.com/

Thursday, February 3, 2011

OSK Jewel 2011 - OSK Investment Bank Jewel 50

Year 2010 I manage to get the OSK Jewel 50 and bought some stocks base on the book. Now I am waiting for OSK Jewel 2011, the 7th edition. Why I like OSK Jewel 2011?

It is a book, easy for me to refer. It focuses on small companies. I like small companies because their growth is generally higher than big companies. Small companies lack research coverage, their share price are much cheaper than big companies.

Hope I can get OSK Jewel 2011 soon.

More on OSK Jewels..
http://politemarket.blogspot.com/search/label/OSK%20Jewels

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Wednesday, February 2, 2011

Genting Singapore 4th Quarter Result

Why Genting Singapore 4th Quarter result is interesting?
Genting Singapore 2nd quarter result exceeded many expectations. Some described it as shooting over the roof. But then Genting Singapore 3rd quarter result was lower. Now, everyone is waiting for Genting Singapore 4th quarter result. Many analysts disagree with each other on Genting Singapore 4th quarter forecast. Some said buy, some said sell, some said hold.
The 2nd quarter result was very good and Genting Singapore share price went up. Then after the 3rd quarter result, Genting Singapore share price was under so much selling pressure.

This is not buy on rumours and sell on news, because many don't know what is the forecast.

Therefore, Genting Singapore 4th Quarter Result will determine Genting Singapore share price direction. We shall wait and see.

More info on Genting Singapore...
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Tuesday, February 1, 2011

52 Ways of Making Money in Stock Market - Part 05/52 - Crisis Opportunity

What is Crisis Opportunity?

This is where you invest during Crisis. The Chinese word for crisis is made up of two combined words- that is Danger and Opportunity. There is a lot of opportunities during crisis because the rebound % is tremendous. During a crisis this is always be our conversation……. I will ask friends and remisiers, “can go in now or not?”. This will always be their replies, “not sure, market still very unstable and may drop further. But if you have the money, just buy some good counters and keep. Price will double in two to three years”. Most of the remisiers and friends will tell the same thing, and it always turn out to be TRUE.


How it works and how you can benefit

Whenever there is a crisis, get ready your cash.
We don’t know when will the Crisis last, but generally it will last about 10 to 27 months.
If you buy too early, you may be catching a falling knife. Too late may miss the boat. From what I observe, it tends to reach bottom when i)the market is quite, ii)nobody talk about the crisis because is already a fact, and iii)when there is bad news but the market didn’t drop much because most have diluted the bad news.

If you are not good at timing (I am also not good), can buy progressively during crisis. Nobody really know when it will hit bottom.

Stock market is normally 6 months ahead of news.

But you must overcome your emotion. During crisis, everybody and all newspaper are very pessimistic. News will tell you the whole world may collapse and the government may be bankrupt. Also we tend to think that we can buy later with a cheaper price.

What you need to do:
1)Whenever there is a crisis, get ready your cash.
2) Select some good counters
3) Buy progressively using Dollar Cost Averaging
4) Wait, don’t not sell after 10%-20%. Expect more.

Many counters up few hundred percent when market recovers. Some stable counters may not up so much because they didn’t drop much. I made most of the money when the market recovers after crisis, because the percentage gain is just too too too great.

Risks, Limitations and Difficulties
*During crisis, many companies are in deep trouble and they may go burst. You may wrongly select a company that eventually goes burst and all your money gone. So you have to avoid these companies. Avoid high gearing company.

*Not easy to overcome our emotion or fear.

*The situation may be worse than we think. Government or the whole world may really collapse.


OPINION
If you are a man, be a man during crisis. Be bold and invest.
If you are a lady, invest and show to man that you can make huge money.
A very good opportunity to invest. Find some counters that are very cheap and still profitable. Try make more than 100% gain. If you are worry, then can buy some companies that most probably will not go bankrupt such as Bursa or consumers counters with net cash.
As a general rule, don’t over invest and don’t put all eggs in the same basket.


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