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Friday, May 25, 2012

Gas Malaysia IPO Target Price

TA Securities gives Gas Malaysia stock code short name GASMSIA fair value of RM2.40, that is about 9% upside from Gas Malaysia IPO price of RM2.20. This translates to a Gas Malaysia PE ratio FY13 PER of 18.2x. Their indicative Gas Malaysia target price of RM2.40 is based on DCF with WACC of 9.4% and long term growth rate of 2.0%. They said valuations at this point seem stretched as target price merely has an implied upside of 8% and total return of 13%.

RHB give GMB fair value at RM2.45, based on a required net yield target of 5% p.a. for FY12-13. They believe GMB is relatively defensive due to : 1) 100% Gas Malaysia dividend payout ratio for FY12, and minimum 75% for subsequent years; 2)possibility of higher sales volume once they secure more supply; 3) its extensive NGDS network; and 4) GMB is currently the only licensed company under the GSA to supply and sell reticulated natural gas in Peninsular Malaysia, implying lack of competition. Nonetheless, they highlight that the longer-term earnings outlook could be affected by changes in the regulated pricing of natural gas, and disruptions to gas supply.

Kenanga research paper give Gas Malaysia target price at RM2.42/share, based on required 5% net yield. This implies 20.5x of Gas Malaysia PE ratio PER of CY13 earnings, which is also fairly in line with the valuation of Petronas Gas. Netting off its net cash, it could potentially be valued at RM2.60/share, assuming the targeted PER of 20.5x remains unchanged. They said Gas Malaysia is more a dividend play given its earnings certainty with a low yearly capex requirement. At the offer price of RM2.20, it offers net Gas Malaysia Dividend yield of 5.5%.

Hong Leong Investment Bank Gas Malaysia research paper gives Gasmsia fair value at 22x FY13 P/E ratio at RM2.55 (3.4x FY13 P/B), given its net cash position (debt free) with underlying strong and stable cash flow and dividend yield.

For more information on Felda Global Ventures Holdings Berhad IPO here, PE ratio and target price

More information on Gas Malaysia IPO here, PE ratio and Target Price.

For more information on IPO here.


Tuesday, May 22, 2012

Gas Malaysia Fair Value Target Price with PE Ratio

I only managed to get some basic info on Gas Malaysia Berhad IPO and here it is.

Gas Malaysia PE Ratio is 13.6x (Dec 2011).
Growth is negative 36% in 2012, positive 12% and 9% in subsequent years.
PE ratio will be 17.4 in 2014.
Gearing is net cash position.
Gas Malayisa dividend yield is 4.7% in 2012.
Info heard from HLIB.

I heard they give Gas Malaysia fair value target price at RM2.55, which is 16% upside from Gas Malaysia IPO price of RM2.20. But one thing we must remember is the RM2.20 price is not fixed yet, it will later determined by bookbuilding.

HLIB said their valuation is based on Gas Malaysia PE ratio at 22x year 2013, with strong cash position, cash flow and dividend yield.

Target Gas Malaysia dividend payout ratio is 100% in 2012, and 75% for 2013.

Based on the above, Gas Malaysia is already quite fairly valued and has limited upside. This is being agreed by some people during our discussion. But I brought out few points.

First, the price of RM2.20 looks relatively cheap. Many retail investors if see RM2.20 they said cheap without knowing the PE ratio.

The price Gas Malaysia IPO price of RM2.20 is not fixed yet.

Market sentiment has not been good last week, but has recovered this two days.

Market talk is huge for Gas Malaysia. Many people has been talking and applying for it. Everybody keep asking can make how much, rather than talking about the risk. Later will be Felda IPO.


Therefore, I think Gas Malaysia IPO is more of a sentiment play rather than a fundamental play.

Will post more if I got more info.

For more information on Felda Global Ventures Holdings Berhad IPO here, PE ratio and target price

More information on Gas Malaysia IPO here, PE ratio and Target Price.

For more information on IPO here.


Sunday, May 20, 2012

52 Ways of Making Money in Stock Market - Part 37/52 - Proprietary Day Trader (PDT)

Proprietary Day Trader is a holder of a dealer’s representative license who is registered as a Proprietary Day Trader under Bursa Malaysia. Many also refer the activities as Proprietary Day Trading (PDT).

Salient Features:
The main purpose is for Day Trading.
Cannot trade Mesdaq stocks(Ace Market stocks).
Launched by Bursa Malaysia in early 2007.
They can short sell.
Proprietary Day Trader cannot have clients
Shall not be a holder of a futures broker’s representative license.
Shall close off any Sell positions on T day.
Shall close off any Buy positions not later than T +2.
I heard most brokers give about 10 times multiple on the cash security deposit.
Profit earned is normally shared, about 60% to broker.
Have to bear 100% loss.

What are the main benefits of becoming a Proprietary Day Trader?
No brokerage.
Very easy to make profit because normally one bid can easily make profit.
Can shortsell.

What are the Disadvantages of Proprietary Day Trader?
Cannot have clients.
Cannot trade Mesdaq/ Ace market securities.
Profit need to share with broker.
Risky if skill is not good.
If shortsell, and then the stock get suspended, then cannot buy back the same day and will subject to buyin.

More information, please refer to Bursa or brokers, or ask me.

More on 52 Ways of Making Money in Stock Market

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Saturday, May 19, 2012

Gas Malaysia Berhad IPO

Gas Malaysia Berhad IPO Opening date: 18 may 2012
Closing date: 25/05/2012
Gas Malaysia Berhad IPO Price RM2.20 and tentative listing date is 11 June 2012.
Balloting of applications 29/05/2012
Allotment of IPO shares to successful applicants  07/06/2012

Initial Public Offering Of 333,840,000 Ordinary Shares Of RM0.50 Each In Gas Malaysia Berhad (“GASMSIA”) (“Offer Shares”):

I. The Institutional Offering Of 303,315,000 Offer Shares To Institutional And Selected Investors And Bumiputera Institutional And Selected Investors Approved By The Ministry Of International
Trade And Industry At The Institutional Price To Be Determined By Way Of Bookbuilding (“Institutional Price”), Payable In Full Upon Allocation; And

II. The Retail Offering Of 30,525,000 Offer Shares To The Malaysian Public, Eligible Directors And Employees Of GASMSIA At The Offer Price Of RM2.20 Per Offer Share; Being The Initial Price Payable By The Applicants (“Retail Price”),

Subject To Clawback And Reallocation Provisions In Conjunction With The Listing Of And Quotation For All The Issued And Paid-Up Ordinary Shares Of GASMSIA On The Main Market Of Bursa Malaysia Securities Berhad.

The Retail Price Is Payable In Full Upon Application And Is Subject To A Refund Of The Difference In The Event That The Final Retail Price Is Les Than The Retail Price.
The Final Retail Price Will Equal The Lower Of:

I. The Retail Gas Malaysia Share Price Of RM2.20 Per Offer Share; And
II. The Institutional Price

Source: Bursa
PETALING JAYA: The three major shareholders of Gas Malaysia Bhd will receive a total of RM734mil from the sale of their shares in the former's impending initial public offering (IPO).

Gas Malaysia's IPO will entail only an offer of sale of 333.8 million shares at RM2.20 a piece.

The three main owners of Gas Malaysia stock are MMC-Shapadu (Holdings) Sdn Bhd (55%), Tokyo Gas-Mitsui & Co Holdings Sdn Bhd (25%) and Petronas Gas Bhd (20%). The three will rake in RM403mil, RM183.6mil and RM146.8mil respectively from the sale of Gas Malaysia shares.

Post IPO, MMC-Shapadu would see its stake reduced to 40.7%, while Tokyo Gas-Mitsui at 18.5% and Petronas Gas with a 14.8% stake.

MMC-Shapadu is a 76% owned subsidiary of MMC Corporation Bhd, while Shahpadu Corporation Sdn Bhd owns the rest of the stake, a company that dabbles in a diverse range of businesses ranging from oil and gas to property development.

Speaking at a recent interview, Gas Malaysia Bhd managing director Datuk Muhamad Noor Hamid said he expected a potential double digit growth in gas volume supplied for 2013 to drive the company's revenue moving forward.

In February 2012, Gas Malaysia signed a gas supply agreement with Petronas for the supply of 492 million standard cubic per day (mmscfd), a 29% increase from its previous supply of 382 mmscfd.

The new agreement starting January 2013 will be for a duration of 10 years with an option to renew for another five years.

For its financial year ended 2011, the company hit a revenue of RM2bil from RM1.8bil recorded previously, driven by the gas tariff revision announced by the government, which took effect on June 1, 2011, in addition to increase in sales volume.

However, its net profit decreased by 23% to RM229mil in 2011 from RM298mil recorded in the previous year due to the new gas tariff, which resulted in Gas Malaysia's average margin declining by 48.9% to RM2.02 per mmBtu, or just 12.5% as margins compared to 26.3% recorded previously.

“We should be doing fine this year in terms of revenue and volume.

“The only thing that will be impacted would be our net profit as we will be exposed to the new gas tariff through the whole year and not only six months during last year,” he said.

He said the net profit would be lower but still very healthy and would grow in tandem with the new increase in volume to be supplied to its customers.

The company intends to pay out 100% of its net profit for its financial year ending Dec 31, 2012, and subsequently targets a payout ratio of not less than 75% of its net profit moving forward.

Gas Malaysia will be publishing its prospectus today, and is enroute to be listed on the Main Market of Bursa Malaysia on June 11.

Established in 1992 to provide an alternative source of energy to the country, it sell, market and distribute natural gas as well as construct and operate the Natural Gas Distribution System in the peninsular.

It operates a network of approximately 1,800 km of pipelines throughout the peninsular, and source its natural gas supply from Petronas via the Peninsular Gas Utilisation Transmission System which is owned and operated by Petronas Gas Bhd.
Source: The Star


For more information on recent IPO example Felda IPO, here.

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Friday, May 11, 2012

Felda IPO Prospectus

Many people are talking about Felda Global Ventures Holdings Berhad IPO (“FELDA IPO”), even those who have not touched shares in their whole life. After much talk about and waiting, the listing of FELDA IPO is very near. I will continue to post more info. In the draft FELDA Prospectus, here are some of the information.

Initial Public Offering of up to 2,188,890,900 Shares. The entire FELDA shares is 3,648,151,500. Felda IPO price will be RM4.65 but this is not confirmed yet, it is from The Star newspaper. The Intuitional portion will be by way of bookbuilding and then only determine the Felda IPO price.

Institutional Offering of up to 1,915,279,900 FELDA shares.1,208,890,900 offer shares and 286,852,000 issue shares to Malaysian Institution and selected investors and foreign institutional and selected investors.419,537,000 issues shares to Bumiputra institutional and selected investors approved by Ministry of International Trade And Industry (MITI).

Retail Offering of 273,611,000 Felda shares.200,648,000 issue shares made available to the eligible employees, eligible Felda settlers, and persons who have contributed to the success of Felda and its subsidiaries.72,963,000 issue shares made available to the Malaysian Public.

For 2011, Felda made RM942 million net profit and Earnings Per Share (EPS) is RM0.26. Felda PE Ratio will be 18x based on Felda IPO price of RM4.65.

I will continue to post more on Felda Global Venture Holdings Berhad IPO.

For more information on Felda Global Ventures Holdings Berhad IPO here, PE ratio and target price

More information on Gas Malaysia IPO here, PE ratio and Target Price.

For more information on IPO here.

Saturday, May 5, 2012

Hating The One You Love

Can we love a stock and hate it at the same time?

Hating the One You Love—"I Hate You, but I Love You"

By Aaron Ben-Zeév, Ph.D. on April 11, 2008 - 7:08am

"Then Amnon hated her exceedingly; so that the hate wherewith he hated her [was] greater than the love wherewith he had loved her" (Bible, 2 Samuel, 13:15)."Familiarity is the root of the closest friendships, as well as the intensest hatreds." (Antoine Rivarol)

Many testimonies, as well as fictional works, describe situations in which people find themselves hating the person they love. This might initially appear to be contradiction, for how can one love and hate the same person at the same time? A discussion of this problem requires making a distinction between logical consistency and psychological compatibility. Hating the one you love may be a consistent experience, but it raises difficulties concerning its psychological compatibility.

Love and hate are often described to be diametrically opposed; in this case, it is impossible to speak about hating the one we love without engaging in a logical contradiction. Two major arguments can be raised against this description. First, love is broader in scope than is hate, as it refers to more features of the object. Thus, while in hate the object is considered to be basically a bad agent, in romantic love the object is perceived to be both good and attractive. Second, there are many varieties of each emotion (and there are more kinds of love than of hate), and each kind cannot be the exact opposite of all other kinds of the other emotion.

Love and hate are distinct rather than opposed experiences: they are similar in certain aspects and dissimilar in others. In light of the complex nature of love and hate, it is plausible that when people describe their relationship as a love-hate relationship, they may be referring to different features of each experience.

The difficulty that arises as a result of feeling hatred and love toward the beloved, not merely at the same instance but also over an extended period, is the difficulty of coping with profound emotional dissonance. Although the presence of mixed emotions is not necessarily puzzling, the presence of different emotions that are both profound and all encompassing, such as love and hate, toward the same person, seems to be psychologically incompatible.

People describe their relationship as a love hate relationship when the circumstances are such that the focus of attention changes under different conditions; hence the change in the emotional attitudes. When the lover focuses his attention on his partner's wisdom, he loves her dearly. When he thinks about the humiliation she brings upon him, he hates her guts. Thus people can say: "I hate you, Then I love you...Then I hate you, Then I love you more" (Celine Dion); "Sometimes I love you, sometimes I hate you. But when I hate you, it's because I love you" (Nat King Cole). Such cases can be explained in light of the fact that emotional experiences are dynamic and different external and personal circumstances may often change our emotional attitude toward the same person.

Love can become a fertile ground for the emergence of hate. When the intensity and intimacy of love turns sour, hate may be generated. In these circumstances, hate serves as a channel of communication when other paths are blocked, and it functions to preserve the powerful closeness of the relationship, in which both connection and separation are impossible. Consider the following testimony of a man convicted of killing his wife (cited in the book, In the Name of Love): "You don't always kill a woman or feel jealousy about a woman or shout at a woman because you hate her. No. Because you love her, that's love." No doubt, love can be extremely dangerous, and people have committed the most horrific crimes in the name of love (and religion).The claim that love and hate exist simultaneously is a more difficult case to explain; here we need to understand how two such divergent attitudes can be directed at the same person at the same time. A woman may say that she dearly loves her partner in general but hates him because he of his dishonesty. Accordingly, people do say something like: "I love and hate you at the same time." In this kind of attitude the profound positive and negative evaluations are directed at different aspects of the person. In a similar vein, an unmarried person in an extra-marital relationship might love the married person deeply, while also hating the beloved for preferring to maintain the bond with the spouse. Likewise, we may hate someone because we love him and are unable to free ourselves of our love for him, or because this love is not reciprocated.

It is interesting to note that our desire for exclusivity arises in romantic love but not in hate. On the contrary, in hate we want to see our negative attitude shared by others. It seems natural that we want to share our negative fortune with others while wanting to keep the positive part merely to ourselves. In positive emotions, when we are happy, we are more open to being attentive to other people, but we guard the source of our happiness more.

To sum up: hating the one we love is possible from a logical point of view, as it does not necessarily involve a contradiction. This phenomenon, however, entails profound emotional dissonance, which in turn reduces the number of instances of such cases. FacebookTwitterEmail

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