|Last Price ||Avg Target Price || Upside/Downside ||Price Call |
|0.715 ||0.64 || -0.075 (10.49%) || |
|* Average Target Price, Price Call and Upside/Downside are derived from Price Targets in the past 6 months.|
|** Price Targets are adjusted for Bonus Issue, Shares Split & Shares Consolidation (where applicable).|
|Date ||Open Price ||Target Price ||Upside/Downside ||Price Call ||Source ||News |
|11/01/2017 ||0.635 ||0.85 ||+0.215 (33.86%) ||BUY ||KENANGA || |
|25/11/2016 ||0.41 ||0.43 ||+0.02 (4.88%) ||BUY ||KENANGA || |
dompeilee Sold some @ 72.5c just to recover some of my long stuck capital.
hisehatu suddenly drop. what happen?
blacksnake banker start to sell............. you can see the volume between 0.68-0.71............ who go to chase be careful............ notion-wb one day 100% of cause take profit
hisehatu why banker start to sell? any bad news?
mh87 looks like its warrant will go up more before expiry date..
Val-Elta U look u will know the strategy now that it has happened. The accumulation happened and then the TP from kenanga is 'published' after accumulation ended, the TP from kenanga is still saying 85c TP. Assuming the kenanga report is targeted at the general public, u will get an idea on how the play happened.
Val-Elta The sustained buying power in this case seems to be from someone with inside knowledge of what is abt to happen next, with the dividend announcement and then with this TP revision. I'm not normally one to talk abt speculative things like this (I'm more of a fundamental guy) but now that the story is almost finished I think most of us can see the 'strategy' that went into this bull run...
Val-Elta I will salute kenanga if they revise the TP while it was still at 40c. But publishing it after it hit 69? @@ so convenient for them to change the TP by up to 100% just over 2 months since the last q announcement?
Val-Elta Take the above with a grain of salt, just my own deduction from the way that pieces seems to fall in nicely one by one.. of course it could all be a coincidence only.
dompeilee 80%+ of all broker recommendations are like that...dirty lol
dompeilee If you buy based on only 2 things - 1. Broker's BUY recommendation & 2.How optimistic the rising share price makes you feel, I can almost guarantee your portfolio will be full of share bought at near the highest prices of the year.
LA777 Nothing is impossible. Think out of the box! Only abnormal people will win big in share market. Just my 2 cent view.
hisehatu very high fluctuation
blackout87 It's the forex gains that's the game changer.
dompeilee Huge long-tailed doji on the daily candlestick. May be game over for now...
hisehatu WB gain 75% in one day! huhh
sherlock normally,business up-cycle could take atless 2-3year,if not longer.
as the case of notion,their had suffer down-cycle for last 5 year,and based on current indicators,like business progress,financial result and financial status,i do believe the new business up-cycle was just started,so the uptrend will continue for coming years even it might take slower pace,unless next month result is much above expectation and TP revise up again by IB.
personally,i think notion still quite undervalue even after recent rally,cos even at 70cen,it is only trading at expected DY of 4.3%-5.7%,and market cap/EBITDA of 3.5x,still one of the lowest(if not lowest) among 900++ listed company.
hisehatu please pull back to 0.65
sherlock Mr.Thoo re-emerge as substantial shareholder again,even at higher price.
i remember when he sell shares 2 years ago,he promised he'll come back,now he honor the promise,i take it as good sign as he is willing to buy more share at near to 70cen per pieces.
bsngpg The return of vampire king
brain Lets take a look at notion's past. It was traded at 15 - 20c many years ago when its par value was 10c. Later there was a 5 to 1 consolidation to make its par value 50c. This was when notion shot up from rm1 plus to over rm2. It was a darling of the market then, gaining recomendation form analyst even though its share price was way beyond rm2. The hedging fiasco brought notion price plummeting to below 40c during the last few years. It WAS a pariah until last few weeks when its financial showed some improvement and div payment materialised. Will notion return to its past glory? 70c is high if you r looking at 36c but is still cheap if we r talking its heydays price of rm2. What's your take on the present scenario? A million dollar question literally.
stockraider Mr Brain,
I think u refer to the wrong thing loh....!!
Notion par value is rm 1.00 not rm 0.10 mah....!!
brain Mr stockraider, you better do your research before putting in your hard earn money.
bsngpg In term of Par Value, "brain" is right, it is now 0.50 from 0.10 many years ago. In term of high price at RM2, I have doubt that "brain" has forgotten to adjust price for bonus issue 3: 4 in Apr 2012.
bsngpg Flood in Thai
Fire In Klang
Silver in Australia
Hedging in USD
Cell phone in M'sia
Downturn in HDD
Downturn in camera
are all tricks by King of Vampire to siphon away our money.
I have doubt if new plant in Johor is another new trick to siphon public 's money.
brain Thanks, bsngpg for the correction. Mayb its time I take profit.
sherlock haha!means management of notion able to control flood,forex movement,and industry downturn,just to work for them?
i really don know whether should laugh or cry when saw such comment@@
sherlock if excluded RM10m one-off deferred tax expenses,FY2016 EBITDA will be RM63m,i predict EBITDA for FY2017 will increase further to RM68-72m due to strong orders from automotive division and stronger USD.
if we used 5-7x EBITDA as fair valuation,notion's market cap could potentially grow to RM350-490m after one year,if coming results fit my expectation.if you willing to spend more time to study on notion's details,i believe you will very optimistic toward the company prospect like i do.
brain Sherlock, you are projecting notion at rm1.30 to rm 1.80. Lets hope you right.
John Lu When 40c, nobody project...haha
blackout87 Once it rise, suddenly everything changes... Lol.. But notion fits the export theme, the business seems to have turned around as well. Let's hope management doesn't screw it up again.
blackout87 Ebitda for 2017 is likely going to be substantially higher than 2016. Owing to
1) higher usd at 4.47 in 2017(so far) to 4.1 in 2016. Top line should grow an additional 8%, majority of expenses r in ringgit.easily an additional rm12-15mil ebitda in 2017
2) 30% increase in automotive another tail wind for revenue, maybe another rm5mil ebitda.
3) significantly lower finance costs due to repayment of facilities.
4) additional tailwind if they r able to partly resolve their inventory issues.
This is an optimistic view. At current market cap of rm190mil+, price to ebitda is not even 3x. This is not taking into account that management is trying to break into other sectors to grow the scope of their cnc machining.
sherlock nice observation blackout87,thats why i still believe notion is very undervalue,i cant find another company which is traded at less than 3x of expected EBITDA.
as for inventory issues,i notice notion's inventory level keep falling for last two year,i believe this is due to management's strategy to reduce inventory level,in order to reduce wastage and write-off.
as at 30.9.2016,inventory already reduced to RM33m.at current level,it is not likely to write-off another RM9.2m again in FY2017,so the write-off amount should reduce significantly going forward.
sherlock brain,about the RM1.3-1.8 valuation,it is supported by strong EBITDA and equal to 5-7x of EBITDA,i think this is very reasonable valuation,quite conservative indeed,cos if you compare with other peers,5-7x is actually at the lower range of normal valuation.
it might looks too good,but it is true,RM1.3-1.8 is fundamentally supported pricing,unless notion's fundamental deteriorate going forward,otherwise i'll still stick on my view and valuation.
Val-Elta As usual, i'll give my counter arguments, I like to give opposing views when things are too negative, or too positive.
Since it's too positive... lets talk abt the bad stuffs that people have all suddenly forgotten
1) High directors fees as % of net profit.
2) Risk of new business failures. Silver, HP, total loss. And now they're talking about biomass business.
3) RM will strengthen again, I won't make my investment decision on RM holding above 4.40 for the entire year.
4) HDD is a sunset industry, it can't be avoided... expect no growth in this segment, and at best, for it to maintain at similar level YoY.
5) SLR, i think we all know its a gone case.
6) Automotive, neutral to sunrise a bit, but we still dunno the margin of this product. From my time following notion, SLR is their biggest margin products, so you can see the loss of SLR business really impacted the profit a lot.
7) New business, new business is not so 'exciting' at first I'm also wondering what's the impact of the new business, but assuming the latest Kng research is correct, and from their statement, Quote "On top of that, the group has also ventured into the new Industrial segment - manufacturing parts for household/sport items. Although meaningful contribution will only be seen in FY18"
Sports and household segment? mmmmm... also take note on the FY18 meaningful contribution......
8) Okay, foreign worker levy suddenly U turn from government, delay by 1 year, but next year notion foreign labour costs will increase by ~ 14% (damn, that effected my decision in a way)
9) Slow/Failure to get new business. I've mentioned this all the while as a big problem. Notion management has about 2 years to fill up the CNC machine left idle from the loss of SLR and HDD business, but even until now, they've not been able to keep machine utilization % high. If you have machines not doing anything, logically you will do whatever it takes to get business for them, their slow ability to do so is a concern. Meaning they're not adaptable to changes in business requirements fast enough. As HDD goes into sunset mode, this could be an issue.
Good or neutral points
1) I'm expecting EPS of 1.4-2 cent for the result announced in Feb. So the rally could last until mid March. But even at 2cent eps, that'll translate to a 80cent TP? 10x of FY EPS.
We already seeing USD to RM back at 4.47, could it retreat more? Notion is very dependent on forex gains for their profitability at the moment...
sherlock it is always good to have argument,atless investors can hear different story.
to me,the director fees seems high mainly due to FY2016 result is not that good.but,if notion's able to achieve EBITDA of RM68-72m,or NP of RM25-30m in FY2017,do you mind directors is paid with RM5-6m salaries per annum?i dont,unless salaries rise significantly going forward.
about new business risk,as you can see after failure in silver business,notion became much cautious in new venture,they invested only less than RM2m in smartphone business,so even the venture is fail,financial impact is negligible .
when talk about HDD,yes,the market is contracting,but notion aldy secure new orders from new customer,so it is more likely that HDD segment still able to grow,atless in coming 1-2 year,not to forget the automotive parts business is grow strongly,management do expect auto business to grow 30% this year,so i do believe there is no issue in growth driver.
about margin issue,if you do notice,automotive business aldy contribute 30% of revenue at FY 2016,while SLR only contribute 21%,if auto business's margin is poor,notion will never achieve RM 63m EBITDA in FY 2016,so i do think auto business able to achieve reasonable margin,even is comparable with SLR.
in fact,the basic demand in SLR segment still strong,even consumer demand is bottoming,but you wont expect commercial photographer to take photo by using smartphone isn't?
forex,yes,it is a major beta,so if you expect RM to strengthen to RM3.5-3.8 level this year,then you should probably avoid notion and any export company.but that is not what i thought,i do not believe RM will strengthen significantly under trump's leadership and normalization of US rate,not to said malaysia might cut OPR further.
when you talk about business,risk is always there,i am positive not because forgot the risk,but positive after analyze all the risk and opportunities,then choose to be positive.
i might be right or wrong,and time will tell.
Val-Elta Actually... there's a secret to their profitability in Q4 result. I'm surprised nobody noticed that :) excluding that one off item, Notion's Q4 result is actually RM 1 million net profit. Vs 4.6m net profit.
TCF actually repaid some money back to the company in last Q, 3.7m to be exact.
If you exclude that one off gain, notion operation net profit is RM 1m, has anyone really noticed this announcement all the while? With this information, you may relook into their operation net profit assumption.
Source > http://www.bursamalaysia.com/market/listed-companies/company-announcements/5209865
Also, when I opened bursa to check back the TCF repayment announcement, I just saw their director sold and buy back share announcement. Sold at 70.x, BB at 68.x
Source > http://www.bursamalaysia.com/market/listed-companies/company-announcements/5314577
He's actively trading the share leh... normally, we expect that to happen with unseen hands, this is quite interesting to say the least.
bsngpg Val-Elta: I always like your analysis and follow up on Notion. Thank you. I distrust the mgt because I bought in a lot in 2012 and went thru all the pain and excuses till now.
Val-Elta You now have a director who will actively trade against you as a minority shareholder, another risk to consider then...
Val-Elta He was able to 'almost' exactly time the top price to sell, with the dividend announcement coincidence + the Kenanga TP report publication date + his ability to time the top, and swing back at 68. It's interesting indeed..
At this price, there is other shares with equal or even better profit profile, with less risks. That's all I'm saying.
I will be fair if the share price gets around 50-55 cent, I would probably buy back again, but so far, I'm mostly on another board already. As I'm fully invested, I'll stop by less here d... so yeah, I guess this is what I want to say.
Talks about RM1++ is really premature i believe, i'm a fundamental guy, and i always believe TPs should be based on EPS... you will need EPS of 3 sen+ to hit your TP Sherlock, for it to be a sustainable TP.
brain Lee Tian Yoke, Exec director & head of marketting. Sold 1m at 705 and bought back 1m at 685 the next day. 2c or rm20k profit. Any comments?
sherlock val-elta,i believe you had misunderstanding the 4rd q profit,cos when TCF repay RM3.7m to notion,it does not affect P&L statement,purely affect B&L,just like you don recognize extra profit when you collect receivable from customer,you just get back what you deserved to get.
so,there is no one-off gain in 4rd q result like what you claimed,RM 4.6m profit is fully derived from business operation,it is real profit.
and you had to really really bear in mind that NP of FY2016 was only RM5.4m,but EBITDA was almost 12x higher at RM63m.that means notion's operation is very profitable,but is currently "hidden" by high level of depreciation charge.you wont notice that if you too focus on EPS,which is derived after deduct every cash and non-cash items.
however,since the plant & machinery is 70-75% depreciated,depreciation charge should reduce further going forward,and then extra EBITDA portion will translate into NP,i estimate in FY 2017,reduce in depreciation charge alone should bring in additional 1.5-2 cen EPS to notion.
in FY2016,depreciation charge was RM34m,this is very abnormal to a company which only generated RM230m revenue a year,but is understandable given notion had spend few hundred million in 2011-2012 to expand their capacity.
unless notion spend more than RM50m capex per year going forward,otherwise we should see the depreciation charge continue to decrease and normalized to RM18-20m in 2-3 year time.that means,additional RM14-16m will be recognize at Net Profit or EPS level each year,not to said if core business bring in another RM20-25m NP(which is quite conservative i believe).
for your information,notion only intent to spend capex of RM25m p.a for next two year.
so,if you do believe EPS of 3 cen is enough for notion to break RM1,then better don simply conclude that RM1 is premature target,cos it can achieve anytime soon and most importantly,it is fundamentally driven.
sherlock i've been work so hard to study and monitor notion for the past 15 month,and i am strongly believe that we had very good reasons to be optimistic on notion's prospect,even after recent rally,cos the long-term rally might just started,and the valuation still very cheap in term of EBITDA.
blackout87 There was also a rm3++mil machinery write off.
Val-Elta Mmmm okay, let's see the quarter result then. My weakness is my fair value is really quite fair, so I could miss out on these big big over 60% gains, or the overpriced levels. This is something I need to train more on :)
Holding for 50% gain is my best record so far, I'll need to aim for more in my next one.
bsngpg Sold all 9600 free warrants at 0.85 due to imminent expiration.
Still need to hold the suck mother share as it is still in Big Loss.
dompeilee Whew! Luckily I kept some...