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Tuesday, May 2, 2017

Ajiya- can we invest in something that we don't understand?

Ajiya share price RM0.91.

Spotted in my telegram n/a.
I first spotted about RM0.84 two weeks ago before I created Telegram. The article is this.... read this two weeks ago.....
Minister in the Prime Minister’s Department Datuk Seri Dr Wee Ka Siong, who witnessed the ceremony, reiterated that the Construction Industry Development Board (CIDB) has stipulated that government projects must have 70% IBS content, and hopes to enforce a 50% IBS score for the private sector by 2018 in the Klang Valley. The requirement will be extended to the whole of Peninsular Malaysia by 2020.

For the past two weeks I wanted to post on Ajiya but was searching the news on Ajiya and CIDB but couln't find because now I know it appeared in Matrix news and not Ajiya.

Anyway, the problem of slowness will be solved because I have created a telegram. 

Ajiya PE ratio TTM 12.4x.

Ajiya dividend yield 2.2%.

Why Ajiya?

They have this AGIBS.

December last year the company said......
.....though the system, dubbed the Ajiya Green Integrated Building System (AGIBS), is new — it was launched just last year — Chan believes it is a very competitive system that should help the group improve its earnings performance in FY17 ending Nov 30, 2017.

With the AGIBS, Chan said Ajiya is among 15 companies shortlisted by the Public Works Department  (JKR) to supply the AGIBS to contractors to build about 100 schools in Peninsular Malaysia, though he did not reveal the value of the job.

“With the contribution of the AGIBS, we expect our earnings in FY17 to at least match the one in FY15, which is about RM22 million, if not better. But with a challenging environment, we dare not be too optimistic,” he said.

On average, the per-unit price of the AGIBS is about RM20,000 to RM25,000, which will provide Ajiya a reasonable double-digit profit margin, according to Chan.

At present, the AGIBS does not contribute much to its bottom line, but Chan expects it to make up at least one-third of the group’s earnings in FY17, while its metal roofing and safety glass businesses are expected to make up the remaining two-thirds.

Ajiya had attracted the attention of some notable institutions.

Our components can be delivered to the site by light trucks, and then assembled like Lego,”

From The Star. 
Integrated Building System (Agibs). With Agibs, the conventional 24-month construction period is significantly reduced to only eight months.
If profit of RM22 million as guided above, PE ratio will still be the same about 12.6x.

I saw the word AGIBS and the Matrix news IBS, I think Ajiya will have great potential if both IBS is the same thing that are talking about.

# Entering East Malaysia. 
The Edge news Dec 2016.....
Ajiya on Oct 24 inked a memorandum of understanding with galvanised and coated steel product maker YKGI Holdings Bhd for a long-term business partnership in Sabah and Sarawak. “Over the years, we have not explored East Malaysia much due to manpower constraints. Now, with the partnership with YKGI, we hope to do more in this part of the country,” said Chan.

Entering Asean...
Outside Malaysia, Chan said, Ajiya had taken the AGIBS into Thailand, where the group sees good demand for the system, and intends to introduce it in Indonesia next.

Said on Annual Report....
We also expect our Ajiya Green Integrated Building System (“AGIBS”) to play a vital role in our growth trajectory and will continue to expand its market in 
Malaysia, Thailand and other Southeast Asian countries. 

With affordable housing becoming an important agenda in the government’s Budget 2017, we believe AGIBS will benefit significantly, as it is a technology that promises an acceleration to the completion of products and attain higher productivity from the shorter construction period as well as reduced labour and wastages.

# If the Ajiya share price drop to very cheap level, probably Dato' Chan may buy it as what he did and said last year.

His direct stake has increased from 18% to 19.8%, and indirect remain the same 10%.

Why NOT Ajiya?

Accounting error. Previously some items in P&L was wrongly reported, but has been rectified recently.

Price has gone up 50% from RM0.60 in Dec 2016 to RM0.91 now. But if we analyse further, the price actually dropped from RM1.00 in Aug 2016, probably due to poor result and as Dato' said it was institutional selling.

Property sector may still struggling.

Latest result announced last Friday the revenue still flat. Don't be misled by the title "Ajiya’s 1Q earnings triple on higher other income", read carefully other income (gain on sale of property. 

Other business units may not perform well and off set the growth of AGIBS

If government want to impose at least 50% and later 70% of IBS content, then Ajiya may have potential if both IBS are the same IBS they are talking about.

Actually don't really understand what is this all about. But we don't have to know 100% before we invest.

How many percent of profit come from CIMB banking? How many % from investment? Overseas? Interest income more or fee? How many countries do they have operations or subsidiary? I see people buying CIMB without knowing all these.

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Dollar Cost Averaging and PEGGY Method. Sharing info on cheap (low PE) company with high growth, low Gearing or Net Cash and High Dividend Yield.



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