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Tuesday, May 31, 2011

XOX IPO Target Price Fair Value Analysis RM0.70

Before determine whether to subscribe XOX Bhd IPO, let us research into XOX financial fundanmental, from a simple PEGGY Method analsysis.

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

Using XOX share price of RM0.80.

XOX PE ratio is 10.1x (FY 2011), no growth forecast available for the next few years.
No net gearing and XOX dividend yield is zero as they have no fixed dividend payout ratio policy and may not pay dividend soon.

Figures from TA and they give XOX target price of RM0.70, based on FY11 PER of 8.9x, which was derived after applying a 50% discount to average FY11 PER of telco players under their coverage. They recommend not to subscribe.


What do you think? Another Focus Lumber?

For info, Redtone and Green Packet are haviong losses (FY 2010). MTouche is making profit (2010).





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Monday, May 30, 2011

Only Two Persons can stop Barcelona

For the past few years, Barcelona is too strong, and is now a dream team. With good players like Messi and so many Spain world cup winner players, nobody can beat them, except two persons.

Who are the two persons?
The first is Jose Mourinho. I know many people does not like Jose Mourinho, but we have to accept the fact that no team can beat Barcelona, except Chelsea, Inter Milan and Real Madrid when Jose Mourinho was/is the manager. Although Barcelona has a better head-to-head record against Jose, but in actual fact, no team can win a single match against Barcelona in big matches.

Jose have beaten Barcelona with three different teams, well done. By the way, I still think that referee favoured Barcelona by sending-off Real Madrid player in 2011 Champions League semi-final.


The second person is Guss Hiddink
2009 Champions League Semi-Final
1st leg in Barcelona 0-0
2nd Leg in Chelsea 1-1
Chelsea went out on away goal rule.

There were 6 penalty decisions favouring Chelsea turned down by the referee. 4 of them were clear cut penalties.

Barcelona unable to beat Chelsea in two matches, and should have lost to Chelsea. My heart still pain whenever I think of the match, it is a totally injustice.

For info, Hiddink only lost once during his tenure as Chelsea temporary manager in 2009.


Conclusion:
Barcelona is the best team now and nobody can beat them, except major teams manage by Jose or Guus.




Why is Netherlands called Holland?
http://politemarket.blogspot.com/2010/07/why-is-netherlands-called-holland.html

Funny Handball
http://politemarket.blogspot.com/2010/08/funny-handball-lol.html

Reasons Messis Played Badly in 2010 World Cup.
http://politemarket.blogspot.com/2010/09/why-lionel-messi-played-badly-in-2010.html

Learn how to dive and cheat in Football.
http://politemarket.blogspot.com/2010/11/football-how-to-dive-and-cheat.html


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Sunday, May 29, 2011

Freight Management Shares Latest News

Freight Management has just announced the quarterly result. It is within most analyst estimates. Let us do a simple PEGGY Evaluation analysis.

PE ratio
Growth
Gearing
Yield

Using Freight Management share price of RM1.10.

PE ratio is still ok, at 7x (Jun 2011).
Growth will be low to moderate for the next two years, unless got major development announcement
Gearing- minimal or net cash
Dividend yield 5% (Jun 2011)

This stock offer low PE ratio and moderate dividend yield. Do you think they can have high growth through buying new business or new venture? Do you think their Warehouse and Distribution division will continue to have high growth? Or you think growth will be low?

Freight Management fair value target price RM1.40 (OSK buy) and RM1.37 (Mercury buy).

More info on Freight Management, here.
http://politemarket.blogspot.com/search/label/Freight


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Saturday, May 28, 2011

UOA Development Bhd Oversubscribed by 3.4 times

MIH is pleased to announce that the UOA Development Bhd, UOADEV IPO under which 60,000,000 shares were made available for application by the Malaysian public has been oversubscribed and balloting of successful applications was conducted this afternoon. The Sole Bookrunner has confirmed that the Institutional Offering of 337,000,000 shares have been placed out to Malaysian and foreign institutional investors and selected investors including Bumiputera investors approved by the Ministry of International Trade and Industry (MITI) by way of bookbuilding.

A total of 23,171 applications for 263,933,500 Shares were received from the Malaysian Public for a total of 60,000,000 Shares available for public subscription, which represents an oversubscription rate of 3.40 times.

All Notices of Allotment for these shares will be mailed to successful applicants on or before June 7, 2011.

Source: Bursa and MIH

Table of the allocation and what is the oversubscribe rate of public portion, here.









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

More info on UOA Development, here
http://politemarket.blogspot.com/search/label/UOA%20Development


IPO is good for Bursa Malaysia Stock Market 
http://politemarket.blogspot.com/2011/04/ipo-is-very-good-for-bursa-malaysia.html

IPO is bad for Bursa Malaysia Stock Market
http://politemarket.blogspot.com/2011/04/ipo-is-very-bad-for-bursa-malaysia.html



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52 Ways of Making Money in Stock Market - Part 13/52 - Trading in Range

TRADING IN RANGE
Most counters are trading in a range. This is when you buy after the prices have drop 10%-20% and sell after you have made 10%-20%. Some range is about 5% to 10%.

Some of my friends are very good in this. They just pick some popular counters with volume, buy when it drop and sell when it rebound. They made money from doing this. Sometimes they buy the counter at a price that is higher than the price that they have sold previously. They told me the fundamental and market sentiment have changed, and the RANGE have moved higher.



RISKS, LIMITATIONS OR DIFFICULTIES:
It SOUND VERY EASY. But in real life very hard. I’m still unable to do it well. Good counter always up, up and up. If we buy a good counter, and after we have sold it, we are not able to buy it back. If we selected a wrong counter or a lousy counter, after we bought it, it come down, buy again, down again. Must be able to find some counters that trade in a range.


OPINION
I still think this is an art, not science, no fix rule. Be patient and don’t time the market, invest progressively. If you want to try, start small and stick to profitable company. Don’t regret after you have sold it and the price goes higher, find more counters to monitor.



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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Friday, May 27, 2011

How much you make in Bursa Malaysia stock market in that year?

We can be buying the same stock, same quantity, same time and same stock price but have different answers. Look at the example.

ABC stock.
2009 profit RM3 million (Earnings per share is RM0.30)
2010 profit RM4 million (earnings per share is RM0.40).

Assuming all buy the same 4,000,000 shares (40% of the company’s total shares, assuming no MGO) and at the same price at RM3.00 in early 2009.
Due to bad market sentiment, the share price drop to RM2.00.
Dividend RM0.06 in 2009 and RM0.08 in year 2010.


Mr A
Said he made a loss of RM4,000,000. That is RM1.00 loss X 4,000,000 shares. No mention of dividend. He is very sad.

Mr B
Said his company made RM3 million in 2009. And made higher profit of RM4 million in 2010. Mr B never mention about loss. No mention about dividend also. He is very happy.

Mr C
Didn’t make any profit or loss. Although sitting at paper loss, still have not sell yet, so no loss yet. But still a bit sad.


Mr D
Made from RM240,000 dividend in 2009 and RM320,000 dividend in 2010. A bit happy.

Mr E to Mr Z
Etc etc etc, many many more different answers.



Why different people have different answer?
Mr A is a pure speculator. Just interested in the stock price and not the profit of the company. Do not bother about the dividend also.

Mr B is a pure businessman. He always think of the company profit. He did not mention about the dividend because whether the company pay dividend or not, all the 40% money is also belongs to him.

Mr C
My Chinese friend said Chinese got a word for Mr C. He cheats himself. He will only consider gain or loss if he sells. He will ignore huge paper gain or huge paper loss.

For me, paper gain or paper loss is still gain or loss. Can I say I am very successful when I just sell my stock with gain and keep the loss making stocks? Then my performance will be excellent.


Mr D is a half fundamental investor. Place too much emphasis on dividend while at the same time ignore the company price performance and profit performance.


Polite Market’s comment:
All Mr A to Mr D have a lopsided thinking. Although Mr B is a pure businessman, but his net worth is actually based on his share price also. He is actually poorer. What we have learned from school is that, as a director or owner of the public listed company, they should not just increase profit but also have to MAXIMISE SHAREHODLERS WEALTH, that is through share price and maximize return on the money sitting in the company. How much will a shareholder get while investing in that company, not just how much the company make.

I think we need to have a combination of thinking on how much we make in stock market. We need to look at the share price and also the company profit for PE ratio and growth potential purposes, and evaluate our performance and the company performance.

Although sitting on paper loss, we are confident that the share price will rebound because of higher profit.

We also need to include dividend in our calculation because that is also money.

Try to have a broader view on stock market and we will invest differently.

More on investing, invite my blog.

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Thursday, May 26, 2011

XOX IPO


XOX Bhd IPO Opening date 24 May 2011.
XOX IPO closing date 31 May 2011.
IPO price RM0.80
Issuing house MIH 512
ACE Market
XOX tentative listing date 10 June 2011


Public issue of 46,800,000 new ordinary shares of RM0.10 each at an issue price of RM0.80 per ordinary share payable in full on application comprising:-

- 7,500,000 new ordinary shares of RM0.10 each available for application by the Malaysian public;

- 9,500,000 new ordinary shares of RM0.10 each available for application by the eligible directors, employees and business associates of XOX Bhd and its subsidiary companies; and

- 29,800,000 new ordinary shares of RM0.10 each for private placement to selected investors,

in conjunction with the listing and quotation of our entire enlarged issued and paid-up share capital on the ace market of Bursa Malaysia Securities Berhad

---------

The Star
Wednesday May 25, 2011
XOX expects to return to profit this year


KUALA LUMPUR: ACE Market-bound XOX Bhd expects to return to profitability this financial year ending Dec 31, 2011 (FY11) and grow its revenue more than 10 times on an increase in subscribers, higher average revenue per user (ARPU) and the launch of more services.

According to its prospectus, XOX, a full-fledged mobile virtual network operator (MVNO), expects a net profit of RM19.7mil for the current FY11 against a net loss of RM15.9mil posted a year ago. It also anticipates revenue to surge more than 10 times to RM249.5mil from RM20.1mil achieved in FY10.

“The industry is huge and it is still growing. We need to get the subscribers and will be launching more services going forward. Without the revenue, you can't get the net profit,” chief executive officer Ng Kok Heng said after launching its prospectus yesterday.

XOX, which is slated for a listing on June 10, currently has more than 400,000 subscribers and targets to hit one million subscribers this year.

The telco forecast that there would be 1.77 million starter packs sold to distributors at an average selling price of RM8.81 per starter pack for the current year.

“In the past three years, we have garnered a significant 20% market share in the MVNO space in the country and built a reputation for introducing innovative and customer-centric services with unbeatable value,” Ng said.

He said as an MVNO, XOX did not have to invest heavily in infrastructure. XOX currently rides on Celcom Axiata Bhd's network infrastructure.

On ARPU, Ng said XOX's average ARPU was about RM20 per month, comprising mostly pre-paid customers. However, he said with more services such e-wallet, an electronic payment service to be launched this year, its ARPU was set to increase. XOX expects the new services as well as wider availability of its products nationwide to help draw more subscribers to its stable.

“We believe that it (e-wallet) will be a lifestyle enhancer for our consumers by bringing additional convenience in making payments and various deals,” he said.

XOX's IPO entails the public issue of 46.8 million new ordinary shares at an initial public offering (IPO) price of 80 sen each, raising RM37.4mil in proceeds for the group. Of the 46.8 million public issue shares, 29.8 million shares will be allocated for private placement for eligible identified investors, 9.5 million shares to be allocated to eligible directors, employees and business associates of XOX and 7.5 million for the public.
Asked if the IPO shares of 10 sen par value to be issued at 80 sen were expensive, Ng said it was “relative”.
XOX plans to allocate RM23.2mil from the proceeds of its IPO for working capital, RM6.2mil for capital expenditure, RM5mil for payment to creditors and the balance RM3mil for listing expenses.


-----------------------
The Star
Saturday January 22, 2011
XOX believes in conquering niche segment first


ACE market-bound XOX Bhd, the country's first full-fledged mobile virtual network operator (MVNO) to be listed on the local stock exchange, aims to hit one million subscribers from around 320,000 currently by year-end.

But unlike other MVNOs or even telecommunication companies (telcos), XOX is looking to boost its subscriber base by focusing on a very niche segment of the community in this case, the Chinese-speaking subscribers.

“If you want to be successful in any industry, you first need to conquer a niche segment, and then only go mass,” chief executive officer Ng Kok Heng tells StarBizWeek in an interview.
Executive director Richard Wong concurs: “In every industry you have to find a niche. If you're just a generic player, you lose out.”

Ng cites low-cost carrier AirAsia, which started off by targeting passengers that were budget-conscious but today serves customers from all walks of life.

He also says that having a segmental target means the company only needs a smaller, albeit more manageable marketing budget.

“The marketing aspect is always a challenge. However, it's not always about dollars and cents. It's about value,” Ng says, adding that the listing of the company on the local stock exchange is in itself part of XOX's initiative to market the company.

“Listing will help. It will create more confidence in our company,” he says.

XOX will be launching its prospectus after Chinese New Year. It intends to list within this quarter, if not the next quarter.

Ng says XOX is looking to raise about RM40mil from the IPO exercise, the bulk of which would be utilised for marketing and working capital purposes.

An MVNO is a company that offers mobile phone services such as phone calls and text messaging, but it does not have its own licensed frequency allocation of radio spectrum. It also may not have the necessary infrastructure to provide mobile phone services.
In XOX's case, the company is offering its services by riding on Celcom Axiata Bhd's network.

“Because we're riding off a service provider (namely Celcom), we're leveraging off readily available infrastructure, which would otherwise take a long time and a lot of investment to develop on our own.

“This will help to also keep our cost down,” says Ng.

Malaysia's MVNOs include Tune Talk Sdn Bhd, Merchantrade Asia Sdn Bhd and REDtone International Bhd. Although REDtone is also listed, it's not solely an MVNO, as it also offers services such as broadband and discounted calls services.

“We're the only MVNO that offers both 2G and 3G and cater to both pre-paid and post-paid customers.
According to Wong, XOX was incorporated in 2005, but was only launched (as an MVNO) commercially in January 2009.

“We spent a lot of time building publicity and growing our customers,” he says.
Ng says while XOX's goal is to target the urban Chinese community, it does not mean that other communities are neglected.

“Yes, our default service messages are in Chinese but they are also available in other languages,” he says, adding that about 70% of XOX's subscribers comprise Chinese-speaking customers. So, for an MVNO that is specifically targeting the urban Chinese community, how does it attract the remaining 30% of its subscribers that are non-Chinese?

“Our packages are competitively priced. When people walk into our dealer stores and see that we are cheaper than our competitors, they register with us. These include students and foreigners,” says Ng.
He says XOX's average revenue per user (ARPU) is about RM20 a month, comprising largely pre-paid customers.

“Our focus going forward is to build our subscriber base. Once this has grown, ARPU will not be an issue.”

Ng says there is a lot of opportunities to grow within the telecoms industry, especially within the MVNO market.

“It's a huge market out there and to benefit from it, you need to be serious and think long-term (to be successful).”

According to Ng, the name XOX is a direct (Chinese to English) pronunciation of “shuo,” which means “talk” or communicate” in Chinese.

“Alternatively, XOX can also mean hugs and kisses,” Ng says in jest
--------------

More info on recent IPO, target price fair value, PE ratio, UOA Development, here.
http://politemarket.blogspot.com/search/label/IPO

IPO is good for Bursa Malaysia Stock Market 
http://politemarket.blogspot.com/2011/04/ipo-is-very-good-for-bursa-malaysia.html

IPO is bad for Bursa Malaysia Stock Market
http://politemarket.blogspot.com/2011/04/ipo-is-very-bad-for-bursa-malaysia.html



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Wednesday, May 25, 2011

Paramon Latest Developmen​t News

1) Quarterly financial result slightly below analyst forecast
2) Paramon bought land in Klang for expansion.
3) RM0.20 dividend ex on 6 June 2011
4) Proposed bonus issue 2 for 5, and share split subdivided 1 to 2

From the Paramount shares latest news, the first quarter financial result was slightly less than analyst estimates.
Higher property development profit but lower profit from education division.
Let us do a PEGGY Method evaluation.

PE: PE Ratio
G: Growth
G: Gearing
Y: Dividend Yield

Using Paramon share price of RM5.71.

Paramount PE ratio is 8.1x (Dec 2010)
Growth 8.4% (2011), 24.3% (2012), 14.6% (2013). PE ratio will drop to 7.5x in Dec 2011.
No net gearing, with net cash.
Paramount dividend yield is 6.7% (2011).
Figures from RHB.

Based on the above figures, PE ratio is not expensive and the growth is ok. Paramount is generous with their dividend.


Issues:
Education division reported lower profit.
The management said ”the tertiary education sector that continues to face stiff competition in an industry that is becoming increasingly overcrowded following the establishment of new and large state-of-the-art campuses by competitors.”

Paramount Bonus Issue, Share Split and Dividend
AGM will be held on 1 June to approve the proposed bonus issue and share split exercise. This may provide support to the share price.


By buying or holding into Paramount share, I see limited downside. PE is not expensive, generous dividend and with bonus issue and share split coming (if approved), it may provide buying interest.

My concern is Long Term growth. With many people saying property market may crash soon, I have been hearing for many months but nothing happen and whether Paramount can lift up their KDU or education business.

If you think that they still can have good growth in the long run, then ok. If you think they have no growth, then you may want to look for a better stock.

See what the management or director said about Paramount’s prospect.

The performance of the Group for the next three quarters will be driven mainly by the property development sector, underpinned by lock-in sales from robust demands that continue to spill into 2011.

The performance of the tertiary education sector will continue to be challenging. Bringing our 30 years of achievements to bear on these challenges, we are, going forward, confident of attaining our strategic objectives. Towards this end, we have made significant investments in the upgrading of campus facilities as well as human and technological resources that are necessary to enable us to remain competitive and seize opportunities in the market. On the positive side, we expect the performance of the primary and secondary school sector to be maintained while the establishment of the international school in the fourth quarter of the year should boost the profitability of the educational services division.

While the Group remains fundamentally strong, the challenging conditions that exist in the education industry may impact our performance.


Up to individuals to make decision. For info, Paramount target price fair value is RM6.40 (RHB, market perform).


For more on Paramount stock, here.
http://politemarket.blogspot.com/search/label/Paramount

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Sold Paramon and Bought TSH

Sold Paramon and bought TSH on Monday 23 May 2011.

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

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


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Unit Trust Fund Performance from 1999 to 2011

Few months ago, my friend saw her latest unit trust statement. She had withdrawn from EPF in 1999 to buy unit trust. I was there and she said she knows how much she made in $, but she wanted to know how much she made in % (in percentage).

After some calculation, she said she made less than 4% a year on a compounded basis. First thing that came to my mind was it is less than EPF returns. And the first question that came to my mind was why?

It is because her year of buying the KLCI was very high? The answer is half yes. 1999 share market just recovered and it was the IT stocks boom.
If we are now in 2008, for sure the % return is not so good. But we are in 2011 and with KLCI at 1500+ points which are close to all time high. And also it was 12 years ago and most up and down would have been neutralised. I have to accept the fact that this particular unit trust fund performance was not so good.

I have few friends also making losses in unit trust. I also have friend who made more than 100% gain from unit trust. It depends on which fund and the timing of buying. If you buy at the beginning of 2010 and sell at the end of 2011, you probably would have made about 20%, which is much higher than EPF.

After analysing the two, I found out the timing of buying is important and it can greatly impact the % returns.

But when to buy? I also don’t know. That is why when I buy shares, I use Dollar Cost Averaging method.

I have calculated, my friends that made losses in unit trust, if they use Dollar Cost Averaging, they will be in profit and not losses.


But I have no answer on how to improve the % return from unit trust for my lady friend who have invested in unit trust for 12 years. I mean 12 years was a very long time. If you want to hold that long, make sure you buy the better fund, in which don’t know which one is the better one. Even when I buy shares, I will buy few counters to diversify.

The disadvantages on Dollar Cost Averaging.
http://politemarket.blogspot.com/search/label/Dollar%20Cost%20Averaging


More info on unit trust.
http://politemarket.blogspot.com/search/label/Unit%20Trust

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Tuesday, May 24, 2011

UOA Development share price target analyst research analysis report

UOA Development IPO fair value is RM3.57 by OSK and RM3.45 by RHB.

In the UOA analysts research analysis report, RHB stated that UOADEV will have a high growth for next few years. They said 59% earnings CAGR for next three years. They expect FY11 core earnings to double that of FY10, mainly due to the tail-end construction of The Horizon Phase 2, Kepong Business Park and Villa Pines. For FY12-13, earnings will be underpinned mainly by the current ongoing projects such as Binjai 8, Camellia Service Apartments and Setapak Green, as well as RM8.6bn worth of projects in the pipeline, out of which more than 70% of the projects is within the Bangsar South City. These include The Park Residences Phase II and III, The Vertical Phase I and II, The Sphere and the Glenmarie project.

Brief History and Background on UOA Development Bhd
UOA Development Bhd major shareholder is the UOA Group. (UOA - United Overseas Australia Limited), which was known as United Overseas Securities Ltd (UOS). The UOA Group was founded by Mr Kong Chong Soon @ Chi Suim (the Executive Director and Managing Director) and Mr Kong Pak Lim.

UOA Group holds more than 60% in UOA Development. UOA is listing on the Main Board of the Australia Stock Exchange (ASX) and also having a secondary listing on the Singapore Stock Exchange (SGX). The UOA Group is also a majority unit holder of the UOA REIT (with a 47.5% stake) which is listed on Bursa Malaysia.

Before you decide whether to apply or subscribe UOA IPO, I have listed some of the issues that you may be interest. Here. http://politemarket.blogspot.com/2011/05/uoa-development-bhd-ipo-target-price.html

You may find UOA PE ratio, other info such as dividend yield and gearing in this IPO in the above link.

Recent IPO.
http://politemarket.blogspot.com/search/label/IPO


Add my blog link to your blog. Here.
http://politemarket.blogspot.com/



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Monday, May 23, 2011

UOA Development IPO

Money Back Guarantee.

Some people are not sure whether to apply UOA Development IPO.  Afraid of losing money. I have an idea but not sure whether it works or not.

Some complain (including myself) that why many IPOs place out so many shares through private placement and then these investors sell the shares after listing. Most IPOs are also overpriced. 15 to 20 years ago, strike IPO similar to strike lottery, usually can make money. But now things are different.

My idea is to have 14 days (after listing) money back guarantee for IPO. If you managed to strike the IPO and are allotted the IPO shares, and you are not satisfied for whatever reasons, you can return the shares back to the company. I think Investment Bank should underwrite this so that they will do due diligence and will not simply overprice the IPO. They are many reasons you may want to return the shares, example the opening price or prices after listing go below the IPO price or you only get 100 shares.

You may think this is a joke, but this is just an idea to protect public investors.

___________

Before you decide whether to apply or subscribe UOA IPO, I have listed some of the issues that you may be interest. Here. http://politemarket.blogspot.com/2011/05/uoa-development-bhd-ipo-target-price.html

You may find UOA PE ratio, other info such as dividend yield and gearing in this IPO in the above link.



Housing Loan
http://politemarket.blogspot.com/2010/11/malaysia-housing-loan-interest-rate.html


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http://politemarket.blogspot.com/



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Saturday, May 21, 2011

UOA Development Bhd IPO Target Price Fair Value RM3.45

UOA Development Bhd IPO closing date (Retail Offering 25 May 2011) and (Institutional Offering 26 May 2011).
UOA IPO price RM 2.90.
The UOA Development Retail Price will be fixed at RM2.90 or 97.00% of the Institutional Price, whichever lower, subject to a refund of the difference between the Final Retail Price and RM2.90 per Share.  
The Institutional Price is by way of book-building. What is the target or expected institutional strike price or Retail Price? Very hard to say, example Maxis and JCY strike price was at the lower end but Pchem was at higher end.
 Issuing house MIH-515 and listing date of UOA Development will be tentatively on 8 June 2011 in Bursa Main Market.
Whether can subscribe or apply UOA Development IPO, let us do a very simple PEGGY Method Evaluation.

PE: PE Ratio
G: Growth
G: Gearing
Y: Yield

Using UOA Development share price or Institutional IPO price of RM3.00.

UOA Development PE ratio is 26.2x (2010 Dec). Growing at 66.1% (2011), 41.3% (2012) and 29.6% (2013). PE ratio will then be 15.8x (2011), 11.2x (2012) and 8.6x (2013).

UOA Development net gearing is fairly high at 55.6%. Post IPO will drop to 4.8% (2011). The UOA Development dividend yield is 2.5% in 2011, and this is based on 40% dividend payout ratio. UOA Development dividend policy is dividend payout of 30% to 50%.

The above figure are by RHB and UOADEV target price fair value is RM3.45, that is at its RNAV per share.

Based on the above figures, UOADEV PE ratio is not cheap. Although it has high growth, at UOADEV share price of RM3.00, this has been factored in. Have to wait two more years then only the PE ratio drop to below 10x. UOADEV dividend yield is just average, although it will grow as the profit grow.

This has confirmed by RHB, where they give a UOADEV IPO stock target price which is only 15% from RM3.00.

I think there are few issues that you need to consider:

1) RM3.00 or RM2.97 is NOT fixed yet.
Although the above PEGGY Figures are not very cheap, but the Retail IPO price is not fixed yet. You may get a lower price and get refund of the difference if they fix the strike price lower. A lower price means UOADEV will have lower PE ratio and higher dividend yield and higher potential share price increase upon listing.

2) IPO year.
So far, Year 2011 is very good year for IPO. The recent few IPOs listing prices were crazily high. This may help UOADEV to trade higher.

3) Top 5 listed property developers stock
Post IPO, UOA Development market capitalization will be in the top 3 or top 5, behind UEM Land, SP Setia and about the same as Suncity-Sunway and IJMLand. Large UOADEV market capitalization will attract more institutional investor and can justify higher PE Ratio or higher price.

4) How RHB get the growth figures?
The growth figures are quite impressive, but how they get it? According to RHB, 2011 profit growth mainly due to the tail-end construction of The Horizon Phase 2, Kepong business Park and Villa Pines. 2012 to 2013 will be (I will post when I got time).

5) Property market Crash?
Many people said property market may crash soon. But I have been hearing that for so many months. I have no idea, up to individuals to judge.

6) Higher IPO price and more shares
This mean that the chances of getting the IPO allocation will be higher.

7) What is UOA Development Par Value? Is it a concern?
Do NOT worry about the UOADEV par value of RM0.05. No issue, some companies example Genting Singapore don't even have a par value.  Important is UOA Development Earnings Per Share (EPS) and PE Ratio and NOT par value. Most analysts will not comment much on the par value because it is not important.
From UOA Development Berhad Prospectus.
The Initial Public Offering (“IPO” Or “Offering”) Of Up To 407.00 Million Ordinary Shares Of RM 0.05 Each In UOA Development Bhd (“UOA Development”) (“Shares”), In Conjunction With The Listing Of And Quotation For 1,195.86 Million Shares On The Main Market Of Bursa Malaysia Securities Berhad, Comprising:

(I) Offer For Sale Of Up To 120.00 Million Existing Shares (“Offer Shares”) Comprising:

Institutional Offering Of Up To 50.00 Million Offer Shares To Malaysian And Foreign Institutional And Selected Investors At The Institutional Price To Be Determined By Way Of Bookbuilding (“Institutional Price”) Payable In Full Upon Allocation; And

Retail Offering Of 70.00 Million Offer Shares To The Malaysian Public, Eligible Directors Of UOA Development, Eligible Employees Of UOA Development And Its Subsidiaries And Persons Who Have Contributed To The Success Of UOA Development And Its Subsidiaries At The Retail Price Of RM2.90 Per Share (“Retail Price”), Payable In Full Upon Application And Subject To Refund Of The Difference, In The Event That The Final Retail Price Is Less Than The Retail Price; And

(II) Public Issue Of 287.00 Million New Shares To Malaysian And Foreign Institutional And Selected Investors Including Bumiputera Investors Approved By The Ministry Of International Trade And Industry At The Institutional Price Payable In Full Upon Allocation,

Subject To The Clawback And Reallocation Provisions And Over-Allotment Option (As Defined Herein). The Final Retail Price Will Be Equal To The Lower Of (I) The Retail Price; And (Ii) 97.00% Of The Institutional Price, Subject To Rounding To The Nearest Sen.

Up to individuals to decide whether worth to apply or subscribe UOADEV. Will post more if I got more info and the time.

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Friday, May 20, 2011

Bursa Malaysia Stock Market Blogs

There are many popular Bursa Malaysia share market blogs, and many people said these famous KLSE bloggers bought the shares before they recommend it. Because they are influential, after they recommended it, they sell to their blog readers. Whether is it true, I don't know. Let us assume this things did actually happened and you decide whether is it ok.

Two issue here, first is the buying and the second issue is the selling. I don’t think it is wrong if the blogger buy first then recommend. If he recommends, he must be convinced that it is a good stock. If he think that it is a good stock, obviously he will buy it.

The time taken to buy a stock is just few clicks or just a phone call to stock broker, dealer or remisier. To write an article, it takes longer time. If you measure by time, buying is faster than posting the article, therefore the blogger would have bought it before they post it.

If you are involved in direct selling or MLM multi level marketing, and you introduce a product, your friend will ask whether you have bought and used it. You will have to say yes. If no, then your friend will ask - if so good why don’t you buy.

Therefore, I see no problem with the blogger who bought it first then recommend.

Now, how about recommend readers to buy in order to sell. First, the readers do not pay any money to read the blog, it is all free to read. The readers cannot blame the bloggers. If after posting and the price went up, the blogger want to take profit due to higher price, I think is ok. But on the other hand, if the posting of an article with the “intention” to sell to readers, then I think it may be wrong in terms of ethics.

Whether it is right or wrong, it depends on the ‘intention” of the bloggers. This is just my opinion and you may not agree with me.

More on investing in malaysia stock market.


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Thursday, May 19, 2011

How NOT to buy a house or property in Share Market

Many articles will tell you how to buy a house or property, but I will tell you how NOT to buy a house or property.

Thia idea was given to me by someone. He bought his landed house 20 years ago, and nothing else. But for the past one year, he bought three properties.

Some of us follow him to see properties, and we always have negative things to say about the properties.

If you don't want to buy the property, the followings are the suggestions of what to complain:

Too small, nneighbourhood not good, ttraffic jam, developers are not well established, property market may be at peak now, and interest rate probably going up.

If you are renting out for investment, you can complain that afraid nobody rent. If nearby got college and easy to rent, you will complain that afraid the college will move to another location.

For old properties, you can complain that is old and  need a lot of money to renovate. If got toll then complain have to pay toll. Complain nearby no food stall, got people ride motorbike without helmet, afraid cannot afford to pay installment, commitment too high, lease hold, prefer landed, if landed then you say you prefer condo, security not tight etc etc. There are many many more.

He told me many people will just because of ONE reason, will stop buying. He said people just find reasons not to buy and will end up not buying. This was what happened to him for the past 20 years.

I will relate this to Bursa Malaysia share market. Many people are just giving excuses not to invest in Bursa Malaysia share market. Saying too risky, manipulate by government or speculators, no volume, economy not good, no money, what if the share price drop, etc etc.

In 2007, KLCI at 1300, my friend told me she will invest when the KLCI drop to 1000 points. But in 2008 the KLCI dropped to 850, she also didn't take any action.

Many of us find ONE excuse and not to invest in share market, rather than find ONE excuse to invest. EPF, unit trust, insurance company, top ten richest persons in Malaysia and the world also invest in share market.

Dear non-share market investtor, think about it, treat it as investment and business. Buy good fundamental and not speculative.

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Wednesday, May 18, 2011

IJacobs Shares Price Target Fair Value of IPO RM0.38

Just managed to find IJacobs Target price. According to CIMB IJacobs has been growing at a 2-year revenue CAGR of 51% from FY07-09. PBT margin also expanded from 25% in FY07 to 39% in FY09 thanks to greater economies of scale. Post listing, the company is also sitting on a healthy balance sheet with a net cash position.

Based on annualized FY10 EPS of 3.6sen, the stock is trading at a P/E multiple of 7.5x. Assuming a 5% EPS growth in FY11 which is conservative, the stock is trading at a more compelling 7.1x P/E. Pegging it
to small cap target P/E of 10x, CIMB derive an indicative target price of RM0.38 for IJacobs, representing 41% upside potential over its IPO price of 27sen. IJacobs’ profit should make the step up with the maiden contribution from its Thailand plant and possibly from its Suzhou and Malaysia plants.

The company also intends to distribute 10-15% of its FY11 PAT as dividend. Based on our estimates, this would translate into a gross yield of 1.4-2.1%

To summarise the fugues by CIMB, let us do a simple PEGGY Method evaluation.

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

Ideal Jacobs PE ratio is 7.5x, and growing at 5% (2011). Net cash and Ideal Jacobs dividend yield is 1.4% to 2.1%.

Although the growth is low, but CIMB didn't really make a long forward forecast and we lack some info here. Just basing on the limited info, I think at Ideal Jacobs share price of RM0.27, there is room for the share price to go up. Ideal Jacobs target price fair value is RM0.38 by CIMB.

Anyway, it is very hard to predict IPO. The recent few IPO listing price went beyond all analysts' target price that it made it hard to come out with a target price for new IPO.


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Tuesday, May 17, 2011

TSH shares Expanding in Indonesia

Extract from HwangDBS. According to Hwang DBS, TSH announced that it is acquiring 100% of Halaman Semesta Sdn Bhd for US$4.2m (c.RM12.6m), which in turn will be buying 90% of PT Munte Waniq Jaya Perkasa (PT Munte) from two local parties.

PT Munte had obtained Ijin Lokasi for 11.5k ha of land in East Kalimantan, of which c.8k ha is estimated to be Hak Guna Usaha (HGU) obtainable. PT Munte had also obtained the necessary license to develop the land into oil palm plantation. We estimate that currently TSH has about c.75k ha of plantable reserves in Indonesia which is likely to at least last the group for the another seven years, assuming 50% efficiency ratio.

We are positive with the latest acquisition as it will boost TSH’s plantable reserves to c.90k which will
underpin its long-term growth. We maintain our Buy call and RM3.55 DCF-derived TP. TSH’s aggressive expansion in Indonesia in recent years bodes well for the group with an impressive FFB volume CAGR of 26% projected for the next three years. We continue to like TSH for its undemanding valuation of 12x FY11 earnings which is the cheapest in our Malaysian coverage.

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TSH stocks Prospect

TSH stocks Prospect
FFB production is expected to increase in 2011 and the following years with more oil palm areas in Indonesia coming into maturity and also more areas reaching peak yield age. So far, only 36% of Indonesian oil palm plantings are in mature phase, thus going forward, it will assure the Group significant FFB output growth. On top of that, as at 31 December 2010, the Group oil palm age profile indicates 73% of the areas comprises of immatureand young mature fields, which will contribute significantly to the FFB output growth of the Group in the future.

OIL PALM AGE PROFILE AT 31 DECEMBER 2010
Age (Yrs) Area (Ha) Percentage
1-3 (Immature) 15,023 (54%)
4-7 (Mature - Young) 5,286 (19%)
8-15 (Mature - Prime 1) 4,039 (14%)
16 - 20 (Mature - Prime 2) 3,524 (13%)
20 & above (Mature) 85 (0.3%)
Planted Total 27,957 (100%)

The Group plans to plant approximately 5,000 ha annually

From TSH Annual Report 2010

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Genting Singapore Target Price Fair Value

From Genting Singapore latest news analysis, Genting Singapore has announced its first quarter result which is within most analysts' estimates. Let us do a simple PEGGY Method evaluation.

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

At Genting Singapore share price of S$2.17, Genting Singapore PE ratio is 30.1x (Dec 2010). Growth is 25.2% (2011), 21.9% (2012) and 14.9% (2013), PE ratio will then drop to 24x in Dec 2011 and 17.1x in Dec 2013. Genting Singapore dividend yield is zero and having net cash, no net gearing. Figures from RHB. Genting Singapore target price fair value S$2.30 Market Perfom RHB.

Based on the above, Genting Singapore is a high growth company but the share price has already factored in the growth potential.

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Monday, May 16, 2011

52 Ways of Making Money in Stock Market - Part 12/52 - Intraday Trade

Intraday Trade
Means buy then sell on the same day.

Some People are good at it. They know the stock after coming down, later may have some technical rebound. So they buy it and then immediately sell it when it goes up.

This is good trading especially if the volume is big such as first day listing of IPO or rights issue, warrant, or any new listed counters, or those high volume counters. Imagining buy $0.98, then one hour later sell $1.01. You made over 3% a day.

Some counters are very heavily traded in a single day due to reasons such as first day listing, news, speculation, etc. The stock is trading in few prices and is changing every fast. You may be able to buy and sell at few bids higher.


Intraday brokerage is very very low. I heard some brokers offered zero brokerage if you didn’t make money for intraday trade.

Actually talk is easy, doing is very difficult. Nothing much I can say on intraday trade because I am not good in this. I know some people are active and make money through intraday trade. I think this is through experience rather than something that you can study. You may want to check with those who have experience.

RISKS, LIMITATIONS OR DIFFICULTIES:
Normally intraday make very small percentage gain. If you make a mistake, and you refuse to cut loss, then there may be huge loss. Always make few percent gain but loss is 20% or even 70%. Many small gains are not able to cover one big loss.

OPINION:
You must always make it clear to yourself, whether the trade is for long term or short term. If purely short term or intraday trade, then must cut loss. I notice many people refuse to cut loss, and hold it for long term, and the loss became bigger. You can buy bad fundamental stock for intraday or contra, but if it comes down, you may want to consider cut loss, rather than hold it for long term. Unless, the stock are good fundamental, then you may consider not to cut loss and hold it long term.





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Sunday, May 15, 2011

Foreign Fund is net buyer in Bursa Malaysia stock market

I noticed that for the past few weeks the percentage of foreign fund participation in Bursa Malaysia stock market has increased. In April 2011, foreign fund net purchase was RM1.2 billion.

In a report in Business Times, two trading weeks since 20 April 2011, foreign funds bought shares worth RM3.8 billion, sold about RM3.4 billion, net purchase of about RM320 million worth of shares.
However, analysts said it is too early to conclude that the buying spree will be sustainable over the long term.
Jupiter Securities head of research Pong Teng Siew said he thinks that the foreign funds are just mainly trading and buying blue chips on pullback, and perhaps they are averaging down.
Foreign funds were mainly net sellers in late January 2011.

I have randomly select few dates of data for your reference.


Daily Trading Participation
(06/05/11)
Participation    Value (%)
Local Retail  :  21.85 
Local Institution  :  45.17 
Foreign  :  32.98 


Daily Trading Participation
(22/04/11)
Participation    Value (%)
Local Retail  :  31.74 
Local Institution  :  62.46 
Foreign  :  5.80  (due to Good Friday public holiday)


Daily Trading Participation
(04/04/11)
Participation    Value (%)
Local Retail  :  33.38 
Local Institution  :  51.14 
Foreign  :  15.48


Daily Trading Participation
(04/01/11)
Participation    Value (%)
Local Retail  :  27.74 
Local Institution  :  52.40 
Foreign  :  19.86 

29/11/2010
Local Retail 25%
Local Institution 44%
Foreign 31%


Daily Trading Participation (03/08/10)
Local  :  76.1% 
Foreign  :  23.9%


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Foreign Fund Participation in Bursa Malaysia share market has dropped to 5.8% ! !

Foreign Fund Participation in Bursa Malaysia share market has dropped to 5.8% ! !

I got a shock when I saw foreign fund participation in Bursa Malaysia stock market dropped to 5.8%. Normally is about 15% to 35%. But on 22 April 2011, it dropped to 5.8%.
After a moment, then I realized that it was actually Good Friday on 22 April 2011. The Friday that Jesus Christ died before arose on Sunday. It was a public holiday in many countries.

Foreign funds participation in Bursa Malaysia stock market actually has increased recently. Will write it in my next post.

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Wednesday, May 11, 2011

Fitters stock – I made pocket money from temporary bad news with no major impact on fundamental

I panic after I bought Fitters.
Bought small quantity of Fitters at RM0.925 on 4 May 2011 and sold at RM1.04 on 9 May 2011, contra. Fitters stock was unable to submit their audited account and faced suspension on 10 May 2011. Why I bought Fitters although it may be suspended?

1) Although I am not very familiar with Fitters stock, but I have read few of the Fitters research reports. They are a profitable company and some brokers recommend to buy.

2) The Fitters director has mentioned that the delay is caused by auditor and they will submit the audited result before 10 May 2011.

3) Fitters stocks are highly liquid currently and easy to buy and sell.

4) Fitters share price dropped more than 10% on 4 May 2011.

5) I have observed few similar cases where the shares prices rebound after the submission of the account.

6) I want to test it out whether I can really make money from these kinds of situations. I called it “temporary bad news with no major impact on fundamental”. No point talking just theory without making real money in practical.


Due to the above reasons, I bought Fitters shares early in that morning. But then I panic.

Why I panic?
1) I started buying very small quantity and hope to buy more when it drops below RM0.90. But it didn’t. Although I just had very small quantity, as I have mentioned in my blog, I normally buy for long term and I am not good at trading. I didn’t know what to do then. I did not buy at higher price because I was panic.

2) After I bought it, negative thoughts keep coming to my mind. What if Fitters shares really fail to submit the audited account? What if after submission, the audited figures are far worse than the un-audited figures? What if Fitters balance sheet is similar to Transmile case? What if Fitters shares price drop to RM0.80 and after everything is settled, it is just trade at RM0.85, etc.

3) Although analysts ask to buy Fitters, but there are many cases analysts also being cheated by company example Transmile.

4) Although it is a small quantity, but my intention was to prove that we can make money from these kinds of situations. I am not familiar and I lack experience and confidence.


After Fitters share price rebounded to near RM1.00, I know I am safe.

Conclusion:
I have proven that we can make money from “temporary bad news with no major impact on fundamental”. But in reality, it may NOT be so easy. We have to overcome our emotion and we are actually taking a risk because we are just outsider and do not know what is the real situation. Look at ATIS, really got suspended and look at Transmile shares, already disappeared.


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Tuesday, May 10, 2011

SEG Shares News
SEG International Berhad latest news is that the first quarter result was above most analyst expectation due to higher profit margin. Let us do a very simple PEGGY Method evaluation.
PE: PE ratio
G: Growth
G: Gearing
Y: Yield (dividend)
At SEG International share price of RM4.00, SEG PE ratio is 23.8x (Dec 2010) 14.2s (forecast Dec 2011).
Growth is 67.4% (2011), 31.9% (2012) and 25% (2013). SEG PE ratio will then drop to 8.5x (Dec 2013).
Having net cash.
And SEG dividend yield is 4.2% (2011).

The above forecast is by RHB. Based on the above, SEGI share is a high growth company but the price has been factored in. You will be buying or holding a high growth company at reasonable price.

SEG target price fair value is RM5.05 (outperform RHB) and RM5.51 (Buy TA Securities).

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Disclaimer

Disclaimer Clause
The information contained in this blog is my personal diary and has been prepared solely for myself. Without any previous reading material or discussion, by just reading my blog contents, reader may misunderstand the contents.
All the contents I am talking to myself and most contents are hypothetical or imaginary.
This blog has been compiled in good faith, with no intention to cause hurt, loss, or any trouble. No representation is (either express or implied) as to the completeness or accuracy of the information it contains.
This blog also is not an advice, recommendation or an invitation to buy or sell or invest in anything, eg shares, futures, derivatives, gold, etc. Consult your investment adviser before making any decisions.
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