One of the ways I screen for companies is to compare their ROE trends with those of companies in the same sector that I have carried out detailed fundamental analysis. On such a basis, I found that WTK did worse than my 2 references - Eksons and Taann. https://www.youtube.com/watch?v=g1byo-eO4CM

With about 10% ROE for the past few years, it is a reasonable performance. The challenge is that from a fundamental perspective, the price is way more than its business value.

If you are looking for companies dealing with wood-based products, Woodlan would not be my first choice. When I looked at its ROE over the past 10 years, it was not much better than Eksons (refer https://focusmalaysia.my/eksons-dont-be-mesmerised-by-the-cash-hoard/) which I consider a cash value trap. It did much worse than Taann.

If you look at the chats and comments, you will realize that most are short term traders. So there are few fundamental investors. Well short term traders buy based on market sentiments. I guess you can see that with the Hamas and Ukraine conflicts, travel is not going to have a bright future.

Mentiga's ROE over the past decade lies in between those of Eksons and Taann. I of course consider Eksons a value trap. Refer to https://www.youtube.com/watch?v=g1byo-eO4CM
From a fundamental perspective, why look at Mentiga when it is not better than Taann?

Despite the high oil prices, the ROE of Yinson over the past few years has been around 10%. I think this reflects its position that it is more like a provider of facilities rather than a mining company.

Boustead Plantation – should you take the GO?

LTAT announced that it will proceed with the GO of BPlant at RM 1.55 per share. The NTA of BPlant as of the end of Dec 2022 was RM 1.21 per share.

The offer price is 1.3 times the NTA. You may think that this is low when considering that the price to NTA for Sime Plantation is 2.0

If you compare BPlant’s ROE over the past 10 years with those of the Bursa plantation sector, you may think that this is a good performance. So why a low offer price for such a good performance? Refer to https://i.postimg.cc/vTVXvMwM/BPlant-ROE.png

But don’t be misled. The EBIT from 2013 to 2022 was RM 2.1 b. During this period, the gain from the disposal of land and securities amounted to RM 1.5 billion. The significant land sales (> RM 50 million gain) were carried out in 2013, 2015 to 2017, and 2019 and 2022

Without these gains, the returns in these years would have been much lower. BPlant did not make much from its plantation operations. I am sure the company is aware and has been trying to address this.

The historical performance showed that it was not successful. Are you going to wait for another decade ie reject the GO or should you take what is offered and look elsewhere?
For more insights into BPlant go to https://focusmalaysia.my/boustead-plantation-is-the-company-really-in-the-plantation-biz/

Over the past decade, BTM ROE was even lower than that for Eksons which ceased its plywood business in Jan 2023. Refer to https://www.youtube.com/watch?v=g1byo-eO4CM
From a fundamental investor perspective, it is better to spend time hunting elsewhere.

There is not enough published history to make a reliable long-term fundamental analysis. But for electronic testing business, my benchmark would be KESM

The company also trades in wood moulding and plywood. As such I compares its ROE with my 2 plywood references - Eksons and Taann. Over the past decade, would be assess KPSCB ROE as in between those of Taann and Eksons. I of course consider Eksons performance as bad. Refer to https://focusmalaysia.my/eksons-dont-be-mesmerised-by-the-cash-hoard/

I thought that Eksons was in a bad shape as its plywood business was dependent on 3rd party timber supplies. You can imagine the timber companies giving priority to thier own plywood operations making life hard for Eksons. Refer to https://www.malaysiastock.biz/Blog/BlogArticle.aspx?tid=27024. But when I compared the past 10 years ROE of these 2 companies, I found that Auro performance was worse.

The performance of BPlant had not been fantastic over the past few years. It made money from land sale rather than operations. So there is a good chance that LTAT would have to find another buyer. Unfortunately for those of you who failed to get it when it was < RM 1.00, you are merely speculating if you buy it now.

Is KSL one of the better Bursa property companies?
While the Malaysian property companies have recovered from the effects of Covid-19, it is still a long way to recovering to the 2013/14 peak.
The chart (refer to https://i.postimg.cc/fLs0G99v/KSL-vs-Property-co.png) shows the ROE of the Bursa property companies with total equity greater than RM 1 billion. You can see the recovery post-2020.
The chart also shows that KSL was an outstanding performance pre-Covid and suffered badly in 2020. However, it seems to have recovered to have its ROE greater than the upper quartile of the large property companies.
But if you look at KSL share price (refer to https://i.postimg.cc/59nFrjNw/KSL-share-price.png) it did not dip significantly in 2020 like its ROE. So unless you think that its ROE in the next 2 years will reach the 2024 level, I would not expect the share price to uptrend so much.
For more insights into the property sector, go to “Will the Malaysian Property industry turn around by 2024?” https://www.youtube.com/watch?v=Wn4p31y0CUQ

ROE has been declining since 2014 and became negative over the past 3 years. I think it will take a while before it returns to the 2014 level

I use 2 references for plywood companies - Eksons which is relying on 3rd party for its logs and Taann with its own logging operations. Eksons decided to exit the plywood business in Jan 2023 while Taann is still manufacturing plywood.

You can see that FLBHD ROE was better than both pre-Covid. Refer to https://i.postimg.cc/gkshNMqt/FLBH.png

Go here for more details of Eksons. https://www.youtube.com/watch?v=g1byo-eO4CM

Over the past 10 years, it only had positive ROE for 3 years. And of these, only one year was good with ROE > 10%. This is not a company I would dig deeper from a fundamental perspective

Subur has an advantage over Eksons in that its timber operations can supply logs to its mills and facilities. As such I was surprised to see that over the past 10 years, its ROE was worse than Eskons which I consider as a cash value trap. Refer to https://www.youtube.com/watch?v=g1byo-eO4CM
Considering that Subur ROE trend is worse than Eksons and Taann, (refer to chart in https://i.postimg.cc/Dwsjg2cm/Subur-vs-Eskons.png) don't you think that there are better options elsewhere?

Despite all the hype this is essentially a contractor. If it was really an oil producer, it would be reaping big profits from the high oil prices

I think with the exit of Eksons and Annum from the plywood business we are witnessing the end of the “independent” plywood manufacturers. In the past it was possible to be a standalone plywood manufacturer with it purchasing logs/timber from 3rd party sources. Today the plywood manufacturers are now like the palm oil mills. There are hardly any independent palm oil mills as estates supply to their own mills.
So we now have timber companies supplying to their own captive plywood plants. So it is no longer viable for Eksons. Refer to https://www.malaysiastock.biz/Blog/BlogArticle.aspx?tid=27024. The shift will benefit companies like PWORTH

Over the years I have invested in companies involved with plywood. I then figured out that those who will survive are those with access to timber. Those companies who rely on buying timber from third party suppliers will have a tough time. Just look at what happened to Cymao (now Annum) and Eksons. Ta Ann is lucky to have timber operations.

The ROE for the past few years were half of those at its peak in its mid-2000s. If you track the share price over the past decade with that of the ROE, you will see a similar pattern. Refer to https://i.postimg.cc/90q1FrsR/SCICOM.png. So unless that ROE is going to trend up, I am not sure why you would think that the share price will go up.

For those thinking of investing in this company, have a look at Eskons. https://www.youtube.com/watch?v=g1byo-eO4CM
Eksons was originally a plywood manufacturer which then diversified into property development. In Jan 2023 Eksons ceased the plywood business. Doesn’t this path sound familiar when you look at Annum?

After many years of losses, it is just providing 4% ROE last year. I am not sure whether there is enough track record to show that its ROE will continue to improve

This is a multi-level marketing company initially distributing gold-plated jewellery through its channel. However, in 2021, jewellery accounted for about 10% of the total revenue. So when looking at Bursa companies which can be proxies for gold, I left out Zhulian but instead focus on others such as Poh Kong or Tomei. Refer to Are there Bursa proxies for gold? https://www.youtube.com/watch?v=CvdIyx3eAWA

This is a company with very volatile returns over the past few years ranging from + 70% to - 70 %. It is a tough one to analyze from a fundamental perspective and I would put this into the "too hard to analyze" category and look for other easier ones

Eksons is a Bursa ex-plywood manufacturer cum property developer trading below its Graham Net Net.

The Graham Net Net (current assets minus total liabilities) is often used as a short-hand for liquidation value. The general view is that if you have a company trading very much below its Graham Net Net, you have found an investment opportunity.

Eksons is currently trading at RM 0.52 per share compared to its Graham Net Net of RM 2.02. You may think that this is a bargain.

But Eksons currently does not have any significant operations and is a cash holding company. This makes it a cash-holding value trap.

A value trap is a company that appears cheap but instead of being a bargain turns out to be a dud. Normally if you have a Graham Net Net, it is not a value trap. But this applies only if there are operations.

For a company with lots of cash but without significant operations, you have to assess it differently. This is the case with Eksons

For details on how I assessed this company, go to Eksons is now a value trap (Oct 2023) https://www.youtube.com/watch?v=g1byo-eO4CM

The returns from the funds have been below 1% since 2017. It did very well prior to that. Has the market changed so that the fund is now not able to repeat its past success ie was the past due to luck?

This has the potential to be another gold proxy. Unfortunately there is not enough operating history to judge its gold proxy status. As such if you want to invest in gold proxy, there are better companies such as Poh Kong or Tomei. For more insight into these go to Are there Bursa proxies for gold? https://www.youtube.com/watch?v=CvdIyx3eAWA

Except for 2016, the company has delivered negative ROE every since despite the high crude oil prices. So will it make money when oil prices comes down?

The last excitement about this stock was in the 2020 when the impression was that this was going to be a gold proxy given its exposure to gold by way of its 40.7% stake in Australian-listed gold exploration company Nex Metals Explorations Ltd. But it exited from gold mining interest when the Australian counterpart rejected MuiProp's option for loan stock conversion into shares and returned all investment plus interests. So this is now just a property company in a tough property market. If you want to look for other current gold proxies have a look at Poh Kong, Tomei, Nice as per https://focusmalaysia.my/gold-rush-are-there-bursa-malaysia-proxies-for-gold/

Are gold miners different from gold jewellers as gold proxies?

I was looking for Bursa gold proxies to invest in by comparing the returns from investing in gold vs investing in a number of Bursa gold proxies.

From 4 Jan 2019 to 26 Aug 2022, gold appreciated by 8.5 % CAGR. The returns for the 4 Bursa companies for the same period are shown in the table. Refer to https://i.postimg.cc/8k0dP5ST/Table-4.png

You can see that only Bahvest return was lower than that for gold. Bahvest is a gold miner whereas the other 3 are gold jewellers.

In the context of proxies for gold, gold miners are typically considered a more direct and volatile proxy for the price of gold. When the price of gold rises, the profitability of gold mining companies often increases significantly. However, their performance can also be affected by factors specific to their operations.

Gold jewellery companies, on the other hand, are influenced by both the price of gold and consumer demand for jewellery. Their financial performance can be influenced by factors such as fashion trends, and marketing strategies. Their performance may not always correlate as closely with changes in the gold price, making them a less direct proxy for gold.

Moral of the story? Invest in the Bursa gold jewellers rather than gold.

What about Bornoil? The company had announced its gold reserves in May 2022. But there was no reporting of this being in operations in its 2022 Annual Report. So until it gets gold out of the ground, you should not consider this a gold proxy.

For details refer to “Are there Bursa proxies for gold?” https://www.youtube.com/watch?v=CvdIyx3eAWA

Are you better off investing in gold than in a gold proxy such as Bahvest?

To answer this question, I compared the gain from gold compared to Bahvest based on the short-term situation ie 2019 to 2022.

From 4 Jan 2019 to 26 Aug 2022, gold appreciated by 8.5 % CAGR. If you have invested in Bahvest, you would have a compounded annual total loss (capital gain + dividends) of 5%. Yep. The share price of Bahvest declined and there was also no dividend.

On such a basis there is no advantage to investing in Bahvest. Bahvest is into gold/silver mining. Studies from other parts of the world suggest that it is better to invest in gold than in gold mining companies.

For more insights on Bursa gold proxies, refer to “Are there Bursa proxies for gold?” https://www.moomoo.com/community/feed/111123187826694?global_content=%7B%22promote_id%22%3A14079%2C%22sub_promote_id%22%3A47%7D

Pre-Covid, the company used to generate more than 10% ROE. It suffered over the past 2 years but there are signs that the ROE is recovering. Its stock price seems to be anticipating this

Are you better off investing in gold than in a gold proxy such as Nice?
To answer this question, I compared the gain from gold compared to Nice based on the short-term situation ie 2019 to 2022.
From 4 Jan 2019 to 26 Aug 2022, gold appreciated by 8.5 % CAGR. If you have invested in Nice, your compounded annual total gain (capital gain + dividends) would be 43%.

On such a basis there is no advantage to investing in gold.
For more insights on Bursa gold proxies, refer to “Are there Bursa proxies for gold?” https://www.youtube.com/watch?v=CvdIyx3eAWA

Are you better off investing in gold than in a gold proxy such as Nice?

To answer this question, I compared the gain from gold compared to Nice based on the short-term situation ie 2019 to 2022.

From 4 Jan 2019 to 26 Aug 2022, gold appreciated by 8.5 % CAGR. If you have invested in Nice, your compounded annual total gain (capital gain + dividends) would be 43%.

On such a basis there is no advantage to investing in gold.

For more insights on Bursa gold proxies, refer to “Are there Bursa proxies for gold?” https://www.youtube.com/watch?v=CvdIyx3eAWA

Are you better off investing in gold than in a gold proxy such as Tomei?

To answer this question, I compared the gain from gold compared to Tomei based on the short-term situation ie 2019 to 2022.

From 4 Jan 2019 to 26 Aug 2022, gold appreciated by 8.5 % CAGR. If you have invested in Tomei, your compounded annual total gain (capital gain + dividends) would be 22%.

On such a basis there is no advantage to investing in gold.

For more insights on Bursa gold proxies, refer to “Are there Bursa proxies for gold?” https://www.youtube.com/watch?v=CvdIyx3eAWA

There is an error in my analysis yesterday as I was not comparing apple-to-apple. Gold appreciated by 8.5 % CAGR compared to Poh Kong 14 %. So it is better to invest in Poh Kong

The Group had achieved double-digit revenue growth over the past 12 years driven by its Cash Recycling ATMs. While there is a limit to this market, how long the profits will continue will depend on your outlook. I expect the Group to continue with its double-digit growth for the next few years. This will provide time for its new products/services to gain traction.

Are you better off investing in gold than in a gold proxy such as Poh Kong?

To answer this question, I compared the gain from gold compared to Poh Kong based on the short-term situation ie 2019 to 2022.

From 4 Jan 2019 to 26 Aug 2022, gold appreciated by 35 %. If you have invested in Poh Kong, your compounded annual total gain (capital gain + dividends) would be 14%.

On such a basis there is no advantage to investing in Poh Kong compared to gold.

For more insights on Bursa gold proxies, refer to “Are there Bursa proxies for gold?” https://www.youtube.com/watch?v=CvdIyx3eAWA

Sports Toto – Does share price follow fundamentals?

I think the chart (refer to https://i.postimg.cc/13xyvHcb/Sports-toto.png) shows a falling ROE corresponding to a falling stock price trends for the past decade.

But there really interesting takeaway is the falling returns over the past 10 years. Does this mean that there are less gamblers?

For more investing insights visit my blog

I am a fundamental investor so I don't trade. But I know many traders use technical to gauge market sentiments. Let me give the traders another data point.

I blog about value investing and I do case studies where I analyse and value companies. I think that there must be some interest in a particular company when it becomes one of the top searched case studies for the past month or so. So for those trading on sentiments, the UOA Ltd group came up in my top in my blog. I will leave you to decide whether this has any use from a technical trading perspective.

But if you want insights into Bursa listed companies go to my blog and read "Are these outstanding stocks - what to consider? (Bursa Malaysia)"

Is Crescendo Corp a value trap? Crescendo is Bursa Malaysia property company whose main projects are in Johore. There has been some positive news about the Johore property market. But I am not sure how this is going to translate into the performance of the property developers in the short run.

I bought Crescendo about 9 years ago having valued its EPV then at RM 4.00 per share. The Book Value then was RM 3.25 per share.

The Book Value had not changed very much since then with the 2022 value at RM 3.29 per share. Its share price today is RM 1.38.

Is this a value trap? Over the past 12 years, the Group has generated a positive total gain for the shareholders. This was due to the dividends. The Group has a good dividend track record paying out about 40% of its earnings. I expect this dividend payments to grow in line with the Group’s performance.

Given that my purchased cost is below both the Asset Value and Earnings Power Value, I would continue to hold onto the stocks as I have a positive view of the sector over the long-run.

For more insights into Bursa companies go to “Are these outstanding stocks - what to consider? (Bursa Malaysia)” at my blog.

Plenitude has two major potential profit contributors – property development and hospitality.

Property development has been contributing to the bottom line, even in the 2020/21 pandemic years. With the opening of the economy, I expect the contribution to be better. The property development segment was the major contributor to the Group’s performance.

Plenitude started as a property developer but in 2001 diversified into the hospitality business. Today the hospitality business is the largest segment in terms of the Total Capital Employed. But it was not profitable since 2013.

The hospitality segment’s poor performance was due to competitive pressures. The Group had refurbished and rebranded the hotels to address this. At the same time, it had also focused on efficiency to improve the margins.

There are signs that gross profit margins are improving but the jury is still out on whether revenue will improve. The hospitality business is a turnaround case. Because of its size, the creation of shareholders’ value will depend on a successful turnaround.

Is Glomac a value trap? The earnings of property developers have been declining over the past few years. This was due to several measures by the government to reduce property speculation. Covid-19 aggravated the situation. The performance of Glomac was similarly affected.

But Glomac has a profitable track record and is financially sound. I expect the business performance of Glomac in the coming years to improve. Together with the expected improvement in the market sentiments, the market price of Glomac would be much higher than what it is today.

The market price of Glomac is currently below its intrinsic value. This is from the perspective of the Asset Value, Earnings Power Value, and Acquirer's Multiple. Refer to the infographics https://i.postimg.cc/NMLj0Tg8/Glomac.png

For a company to be a value trap, its low price must be due to poor fundamentals. In the case of Glomac, the analysis does not indicate poor fundamentals. The intrinsic values are significantly higher than the market price. I would not consider Glomac a value trap.

For more insights into Bursa companies, go to https://www.malaysiastock.biz/Blog/BlogArticle.aspx?tid=26821

With negative ROE for the past few years, this is a counter for the speculators

Hektar – declining dividends per unit for the long-term investor

Hektar is a Bursa shopping centre REIT with currently 5 properties with about 2 million sq ft of lettable area.

A long-term unit holder would have suffered during the past 15 years with declining Dividends per unit

While Revenue and FFO in 2022 were higher than those in 2007, PAT was lower. We can trace the financial performance to the declining tenancy performance.

The number of units in Hektar increased from 320 million units in 2007 to 469 million units in 2022 while the financial performance deteriorated. This meant that on a per unit basis, unitholders were worse off in 2022 compared to 2007. Earnings per unit and FFO per unit declined. This then led to a declining Dividend per unit. Refer to the infographics https://i.postimg.cc/bYBGQT8x/Hektar.png

When hunting for REIT, don’t look at current dividend yield. Look at its history of how it grew. Growth may not benefit you.

For more insights of Bursa companies and stock tips, refer to https://www.youtube.com/watch?v=B8jucWeYbR0

CBIP has about 20,000 ha of planted palm oil through its associates and JV. Given the acquisition of Boustead Plantation at RM 48,000 per ha, does it mean that the market has not recognized the true value of CBIP.

Price going up but its ROE over the past few years have been coming down. I also don't see anything in its quarterly performance. Goreng?

Plantations saved MKH.

Many know MKH as a property developer. But the Malaysia property sector had been so over the past 6 to 8 years. Fortunately for MKH it ventured into oil palm plantations in mid 2000s.

If you look at the chart (refer to https://i.postimg.cc/vZWWskv4/MKH-EBIT.png) you can see that while the EBIT contribution from the property development segment had been declining since 2016, that from the plantation segment had been growing. In 2022, the plantation segment accounted for about half of MKH’s EBIT.

So, what does it mean for an investor?
• When the property sector recovers, we can expect better overall profit.
• Property and oil palm sectors are cyclical but they are affected by different factors. So MKH performance will be less cyclical.

For more insights into the Bursa plantation sector, refer to https://www.youtube.com/watch?v=9KhboTCMdEg

Except for one year, the ROE of HengYuan Refining over the past 5 years is nothing to shout about. Last year was negative ROE Refinery don't seem to benefit from the high oil prices. Now why would you expect the share price to move from a fundamental perspective?