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Stock Infographics

Author: DonkeyStock   |   Latest post: Tue, 22 Oct 2019, 1:36 PM

 

Efficiency, Valuation and Gearing of Malaysia listed Real Estate Companies

Author: DonkeyStock   |  Publish date: Tue, 22 Oct 2019, 1:36 PM


KL Property Index

KL Property Index has fallen by half since the year 2014 and is now back to the price level of the year 2009.
 
 
The 2020 Budget includes a few measures to boost the property sector, such as:
·         Lowering of the threshold of high-rise property prices in urban areas from RM1 million to RM600,000 for foreign buyers
·         Shifting the real property gain tax base year from 2000 to 2013
·         A new Rent-to-own scheme for first-time homebuyers
·         Extension of BSN's Youth Housing Scheme
 
Encouraged by the government effort to boost the real estate sector and the low valuation of properties companies, I started to check out those smaller properties companies not covered by any news or any research house.
 

 

 

 
Turns out that not all companies that have a lower gearing ratio command a lower valuation. Companies that are consistent in paying out dividends actually command a higher valuation when they increase their gearing ratio.
 
 
Also, I did a chart that shows the relationship between the company valuation and the efficiency of the company. I used Return on Asset (ROA) to gauge its efficiency as the number of sales generated from the underlying asset is very important for a real estate company since it is a high capital intensive industry. The result was pretty satisfactory. Companies that generate a higher ROA command a much higher valuation. This can also explain why some of the companies like UOA Development has been pretty resilient in this industry downtrend while the share price of companies like Ecoworld and SP Setia has been plunging like a waterfall.
 
Here are some of the outstanding companies from my view.
 
1)Matrix Concept is a company that is able to generate a good return from its assets and delivers a consistent dividend. But it is still trading above 1x PB Ratio.
2) UOA Development is another company that has the same characteristics but trading below its NTA.
3) Mah Sing Bhd, MKH Bhd and Malton Bhd are companies that have above-average ROA but below-average valuation, which make them a good counter to buy if once their price revert to the industry mean.
 
UOA Development and MKH are now On my watch list. Which property company is in your watchlist currently and why? Share it with us.
 
You can access the interactive chart here if your desired company is not being labelled in the chart above. 
 
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valuelurker Nice work
22/10/2019 2:18 PM

Oil & Gas Sectors Investment Cycle

Author: DonkeyStock   |  Publish date: Fri, 4 May 2018, 9:48 PM


 

【Oil Investment cycle is long】

Historically speaking, the oil & gas sector goes through long, 30-year investment cycles driven by the market's risk appetite for long-term investments. Since 2014 we've been in the Contraction phase of the cycle, as the market absorbed the oversupply generated by the 2003-2013 Expansionary phase. The costs to drill a barrel of oil is now 50% lower, making new investments profitable once again.

 

【EV is making the oil supply market tighter】

The focus on the electric vehicle is dis-incentivizing investments in long-cycle capacity. While shale provides enough short-cycle production to prevent the market from running into shortages, the lack of long-term investment keeps the physical markets tight. Concerns about EV demand displacement is taking more future supply off the market through lack of financing. Decarbonization is actually having a net tightening effect on the oil market.

 

【Oilfield Service Provider benefits the most】

Cost tends to rise in the Expansion phase of the oil investment cycle, led by perceived future supply shortages, easy credit, market fragmentation and rising inefficiencies. Cost inflation compounded at 10% per year in the 2003-13 period, destroying the producers' returns and only partially benefitting oil services.

In contrast, during the Contraction phase, returns improve slowly but consistently, led by an oligopolistic market structure, better management of the supply chain, and advantaged resource access.

This article has first appeared on Donkey Stock's Facebook page.

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BBAM 与 Asia Aviation Capital 11.85亿美金成交

Author: DonkeyStock   |  Publish date: Thu, 1 Mar 2018, 8:00 PM


 

亚航今天终归以11.85 亿美金(如果包含债务的话是28.46亿美金)将他旗下的飞机租赁公司卖给了BBAM。

相信在波音和空中巴士订单都吃紧的情况下,BBAM 这下一次性增添84架飞机也让他更加有能力在这个航空大时代竞争!

 

 

 

 

 

 

 

Labels: AIRASIA
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29/03/2018 5:51 PM
Lim Tek Wai can write shorter to more clear?
29/03/2018 5:53 PM

后QE时代,升息的大环境下什么行业还有看头?

Author: DonkeyStock   |  Publish date: Wed, 6 Dec 2017, 8:30 PM


 

2017年11月10日,马来西亚国家银行(BNM)发出最强烈的信号,即隔夜政策利率(OPR)可能上调。央行表示,鉴于全球和国内宏观经济的形势,国家银行可能会考虑检讨当前的货币供给政策。那究竟是什么条件让国家银行有底气说要升利息呢?

 

【国内条件】

•马来西亚2017年第三季度GDP录得6.2%的增长

•马来西亚的通胀率由于燃料成本而一直高涨

 

【宏观经济状况】

•美联储在2017年两次上调联邦基金利率,预计12月再次上调

•英国央行自2007年首次上调基准利率。

•欧洲央行已经公布了削减量化宽松的计划

 

因此市场预计国家银行将在2018年1月将进行25个基点(0.25%)的OPR上调,2018年可能进一步上调。

 

随着廉价和低利率时代的到来,投资者如何能从利率上升的时代中获利呢?一下是一些利率上涨的大环境下仍然有看头的行业

 

【银行】

银行业可能从利率上升中受益,因为利差会随着利率的上涨而扩大。银行是通过借【短天期,低利率】的储蓄,并进行【长天期,高利率】的放贷来赚钱。加息能使银行有机会从息差中获得更多收益。

然而,由于借款人偿还的能力恶化,银行也可能面临不良贷款暴增。 而且,当短期利率上涨的速度快于长期利率时将导致收益率曲线趋于平缓。 扁平化收益率曲线将严重因宪法银行的利润。

【保险公司】

保险公司一般不会从保费中获得很多利润。他们利用我们所缴交的保费进行投资,进而成为保险公司的利润。由于大多数保险公司都投资债券,上涨的利率可以显着提高保险公司的利润。

 

【进口商】

当利率上升时,货币通常会跟着升值。强劲的马币有助于进口商以较低的价格购买外国产品。

 

然而,利率上涨还是会对以下这些行业造成不小的冲击

 

【房地产投资信托基金/REITS】

 

房地产投资信托基金通常有较高的债务水平。当利率上升时,融资成本的上涨会影响这些公司的利润率。

至于债务水平相对较低的房地产投资信托基金也可能面临抛售压力。当债券收益率上升时,房地产投资信托基金作为一种风险比债卷大的产品,市场会要求更高的收益率作为风险的溢价。

 

 

【公用事业和电讯】

 

公用事业和电讯公司通常有大量的债务。此外,这些公司多半不会成长,并将大部分收入作为股息进行支付。喜欢存股的投资者都喜欢这写高股息的股票。然而,他们作为低利率环境下债券的替代品,当债券收益率上升到一定的水平,这些公司的股票将会面临到极大的抛售压力。

 

【房地产】

当利率上升时,每个月所要还利息也会相应增加。较高的贷款利率会降低人民对住房的负担能力,导致房地产销售数额下滑。

【汽车】

由于利息支付增加,消费者的可支配收入减少,这可能会妨碍消费者的情绪,并推迟他们购买耐用品的意愿。

 

 

【出口商】

当利率上升时,货币会相对的强势。由于价格上的竞争力下滑,这将使得出口商更难销售马来西亚制造的产品。

随着全球利率开始上涨,现在是重新评估您的投资组合风险,并寻找新机会的好时机。

简单来说,在利率上升的环境下,纯粹为收益率而购买高股息的股票已经是一项高风险的投资行为了。

 

如果你想了解板块轮动的原因,可以参考这里:

https://www.donkeystock.biz/2017/06/18/sector-rotation/

 

Donkey Stock

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Malaysia Minimum Wages

Author: DonkeyStock   |  Publish date: Sun, 22 Oct 2017, 6:18 PM


The post Malaysia Minimum Wages appeared first on Donkey Stock.

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Is EPF Money Stolen?

Author: DonkeyStock   |  Publish date: Sun, 24 Sep 2017, 7:00 AM


On 12 September 2017, Prime Minister Datuk Seri Najib Tun Razak had announced that the EPF and Khazanah Nasional to expand their investment in US and purchase more Boeing jets to strengthen the country's economy.   An Overview on EPF EPF manages the compulsory savings plan and retirement planning for private sector workers in Malaysia. […]

The post Is EPF Money Stolen? appeared first on Donkey Stock.

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Great Deal in Red Chips

Author: DonkeyStock   |  Publish date: Mon, 11 Sep 2017, 1:45 AM


 
Does the recent surge in red chips counter excites you ? Low share price and high NTA seems a good buy. 
 
If you think that way, you probably still a newbie in the market and you must read this post which could give you a second thought.
 
Let's understand what is the background of China companies listing on Bursa, how it performs and how other exchange are dealing with it.
 
Anyone with experience investing in China based stocks, do share your story here !
 
 

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Value Trap: Are you falling into these traps?

Pump and Dump: How the syndicate operate pump and dump and what type of stock they will pick.

 

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Salcon

Author: DonkeyStock   |  Publish date: Sun, 20 Aug 2017, 7:00 AM


Salcon’s business operation: Engineering & Construction Design and build water and waster water treatment plant; Operation and NRW management. Water supply concession in Ho Hi Minh City, an operations since 1999 Property Development Property Development Technology Service Infrastructure fibre optics services for telco operator and SME China tourism e commerce Operation of pavilion on Alitrip […]

The post Salcon appeared first on Donkey Stock.

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Factors Influencing Palm Oil Prices

Author: DonkeyStock   |  Publish date: Sun, 13 Aug 2017, 7:00 AM


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How bad can a company be? Don't let your company be one of it!

Author: DonkeyStock   |  Publish date: Wed, 2 Aug 2017, 12:02 AM


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Red Flag Spotting: Signals to beware when analysing financial statement.

Value Trap: Are you falling into these traps?
 
 

Practice Note 17, also known as PN 17, is triggered as long as a company listed in Main Board hits the following criteria:

·         Shareholder equity falls below 25% of issued and paid up capital and shareholder equity is less than RM40 million

 

Guidance Note 3, also known as GN 3, is triggered as long as a company listed in Ace market meets the following criteria:

·         Shareholder equity is less than 25% of issued and paid up capital

·         The firm has incurred loss for one full financial year the loss amount is equal to or more than shareholder equity and shareholder equity is less than 50% of issued and paid up capital

·         It has incurred loss in two consecutive full financial year and the amount is more than shareholder equity, the second year loss is more than 50% of first year loss and the shareholder equity is below 50% of issued and paid up capital

Beside the situation that related to shareholder equity, a company will trigger PN 17 or GN 3 as long as the experience the situation as stated below:

·         50% of total assets are under receivership

·         Subsidiary that makes up more than 50% of total asset is winding up

·         Adverse or disclaimer opinion by auditor

·         Auditor express an emphasis of matter on going concern and shareholder equity is less than 50% of issued and paid-up capital

·         The company default in its payment

 

Adverse Opinion: Financial records are not in accordance to accounting standards or grossly misstated

Disclaimer Opinion: Auditor do not provide any opinion due to absence of financial records or insufficient cooperation from management

Emphasis of matter on going concern: Uncertainty on whether the company will survive

 

When a company hits the criteria of being a PN17/ GN3 company, they have to announce to the exchange immediately. The below is a timeline of what a company should do when it became a PN17/GN3 company.

If the PN 17 firm plans to change its business direction or policy

  1. Announce a regularization plan within the first 3 months
  2. Submit the regularization plan to Securities Commission (SC) for approval within 12 months from the First Announcement
  3. Update the status of regularization plan on a monthly basis
  4. Complete the plan within the time frame prescribe by SC

 

If the PN 17 firm does not plan to change its business direction or policy

  1. Announce a regularization plan within the first 3 months
  2. Submit the regularization plan to the exchange for approval within 12 months from the First Announcement
  3. Complete the regularization plan within 6 months from the time the plan being approved. Cases that involve court proceedings are being given a time frame of up to 12 months.
  4. Update the status of regularization plan on a monthly basis
  5. Record a net profit in 2 consecutive quarterly result after the completion of the plan

Action to do by a GN3 Company

  1. Appoint a sponsor within the first 3 months
  2. Submit the regularization plan to the exchange for approval within 12 months from the First Announcement
  3. Complete the regularization plan within 6 – 12 months
  4. Update the status of regularization plan on a monthly basis

 

A failure to do so will face a suspension or delisting of the counter.

 

Some example of regularization plan

·         Divestment of non-core business

·         Injection of fresh capital via new strategic shareholders

·         Agreement and compromise with creditors

·         Share capital reduction

·         Fund raising via rights issue or private placement

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Malaysia Palm Oil Industry

Author: DonkeyStock   |  Publish date: Sun, 30 Jul 2017, 7:00 AM


The post Malaysia Palm Oil Industry appeared first on Donkey Stock.

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Stop falling into Pump and Dump Scheme. You can learn how to avoid it

Author: DonkeyStock   |  Publish date: Sat, 29 Jul 2017, 12:01 AM


 

 

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Value Trap: Are you falling into these traps?

Pump and Dump: How the syndicate operate pump and dump and what type of stock they will pick.

 

Red Flag Spotting 

Some companies are creative in manipulating their accounts. Hence, investors might be misled by the figures shown in financial statements.

Here are some red flag signals where investors could take a closer look before accepting the bottom line figures presented by the management.

Erratic Cash Flow

Huge volatility in operating cash flow. This signal shows that company might have problem in managing their cash flow regardless of receiving cash or making payment to supplier. Some might face pressure from supplier due to the management creditworthiness and has a shorter payment term. This will lead the company into a death spiral where liquidity issue could drive company into bankruptcy even if the company is recording huge profit.

Changes in Depreciation Method

Depreciation takes up a sizable expense in a company income statement. Some company might change their depreciation method not according to the relevant asset useful lifetime. Companies which requires high asset level to operate may change their asset useful life (Eg: from 8 years into 15 years) to reduce depreciation cost in order to lift up the bottom line.

Huge increase in receivables

The management might adopt a lose credit policy to increase the sales of their products and services. This may show a leap in both revenue and profit but ignoring the risk of not being able to receive payment from their customers. Companies has a tendency to do so at the last quarter of the financial year in order to present a more presentable financial statement but this action will definitely harm the company in long term.

Expenses being capitalized

An expenses added to the fixed asset on a company’s balance sheet. Companies might convert some of their expenses, such as financing cost into property and plant; research and development cost may be added up to the companies’ intangible assets. This has an effect of inflating the company Net Tangible Asset

Inventories pilling up

Products that may be obsolete or out of the market favour may be kept in the company warehouse for a long time. The management should have made an impairment on the product or provide a provision for impairment regarding the obsolete inventory. This is also a sign that the company has faced problems in selling their goods.

It does not mean the company you invest is bad if it falls into either one of the category. Just take a closer look before you think you had found a hidden gem.

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Armada An Quantum Leap Stock In 2019/2020 Stop falling into Pump and Dump Scheme. You can learn how to avoid it !

Thanks to DonkeyStock ,
this is a real trick for most Crooked Bossies like to manipulate their acount .

Example :
1.transmile & knm ; they manipulate with the 'CHANGE IN DEPRECIATION METHOD'
2.LCL ;'HUGE INCREASE IN RECEIVABLE'

... they usually will deploy 2-3 tricks in manipulating it to make it less obvious ,in some cases like investment holding they are much more complication in dissection their manipulating activities .
29/07/2017 11:13 AM
Armada An Quantum Leap Stock In 2019/2020 To blur most retailers by releasing press of
signing ' MOU ' with some oversea venture in ' securing ' a lucrative amount of Contract ... ( i found most newbies are crazyly buying into this kind of stories, without a second layer of thinking ).
29/07/2017 11:20 AM
Alex™ like anzo....0.60 that time...i noob was queuing 0.59 but cannot get...so give up....im so lucky =(
29/07/2017 11:31 AM
ooi8888 bro musang, any good tipsy?
29/07/2017 11:44 AM
ooi8888 aiyoo, you recommend all durian king, cannot afford. How you see champion? I tambah lagi.
29/07/2017 11:50 AM
Alex™ durian king, please hard sell penta also pls....so my durian tree can huat faster =D
29/07/2017 11:53 AM
ooi8888 You still holding?
29/07/2017 11:53 AM
ooi8888 hua! you bot so high?
29/07/2017 11:56 AM

How pump and dump works ?

Author: DonkeyStock   |  Publish date: Fri, 28 Jul 2017, 12:01 AM


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Red Flag Spotting: Signals to beware when analysing financial statement.

 

Pump and Dump

Not all stock pitch is a pump and dump scheme. Many investors or public relation advisors sincerely want a company to succeed and use their skills to help decent companies noticed by prospective investors.

There are also promoters who dupe investors putting their money into companies that are not viable investments. Usually a bad company will attract bad stock promoters.

Previously, pump and dump syndicates used cold call or telemarketing to promote their stock, Jordan Belfort in the movie Wolf of Wall Street is a movie centred with pump and dump activities. The advent of internet now offers a cheaper and easier way to reach a large number of potential investors.

Companies with the characteristics of operating pump and dump

·         A variety of reorganization activities, which include merger deals or change of share capital

·         A very busy public relation department that blows its own trumpet. Issuing numerous press release announcing new deals and products, stating a strong potential and goods fortune to be made.

·         Dubious connection and a high level of related party transaction

·         Trading surge

How they operate?

1.    Claiming they have insider information about impending news

2.    Newsletter offering bias recommendations, which provides false, misleading or greatly exaggerated statements

3.    Touting a company as a hot stock with bright potential

4.    Post messages in chat apps, forum and social media

If it successful, it will entice investors to purchase shares of the target company. The increase demand, price and volume would convince more people to believe the hype and buy the shares as well.

5.    The promoters dump their shares and stop promoting the stock

6.    The price plummets, leaving investors holding stock that is worth significantly less than what they paid for

7.    They pick another company and start the cycle again

 

What company they pick?

·         Micro or small cap stock

·         Highly illiquid stock that can have sharp price movements when volume increase

·         Major shareholders who agree to work alongside with the promoter

 

Is it legal?

No, it is illegal and can lead to heavy fines

 

 

  2 people like this.
 
Tom Zzzzzzz
28/07/2017 12:22 AM
Goh Kim Hock No enforcement from Bursa Malaysia against pump and dump activities. So investors need to take care of themselves.
28/07/2017 1:20 AM
CharlesT Much better than cpteh's pump n dump writings
28/07/2017 7:06 AM
Bruce88 Bursa is always slow in action..all were sleeping zzzz..
28/07/2017 8:11 AM
Integrity. Intelligent. Industrious. 3iii (iiinvestsmart) http://www.investlah.com/forum/index.php/topic,50774.0.html Pages 1 to 109 of this thread capture the pump and dump activities on this stock. Those interested can use it to do a wonderful research thesis, albeit, using a single company as the subject.
28/07/2017 10:04 AM

Malaysia Smelting Corp - A miner that shakes the tin market

Author: DonkeyStock   |  Publish date: Thu, 27 Jul 2017, 12:01 AM


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Tin Market: Opportunity, future and the present of world tin market

 

Malaysia Smelting Corp

Malaysia Smelting Corp is a company with a history of more than a century. It is involved in tin mining and tin smelting.

Tin has a wide usage on both industrial and consumer segment. Soldering, tin plate, tin chemical and lead acid batteries are the major four application of tin. China, Indonesia and Malaysia are the major tin producing countries while China, USA and Japan are the major consumption countries.

Malaysia Smelting Corp has an annual smelting production of 27,000 tonnes per annum. Roughly 4,200 tonnes of tin concentrates are mined from Malaysia and the rest are imported from its associates which span around the globe.

 Here is a list of Malaysia Smelting Corp Associates and investment and its relevant stakes:

·         40% stake in Redring Solder Malaysia, which is involved in manufacturing and sales of solder product

·         35% stake in Guilin Hin Wei, which is a dormant company

·         30% stake in KM Resources, which is involved in mining of copper, gold, zinc and silver

·         40% stake in Africa Smelting Corp, which is a dormant company

Recently, Malaysia Smelting Corp has conduct a series of corporate action, disposing its non-tin business and focusing on tin concentrates supply chain. In 2011, it has conduct a dual listing in SGX and dispose its interest in Australia Oriental Mineral and Asiatic Coal. Malaysia Smelting Corp acquire 80% of SL Tin in 2014, which has a 15 years mining lease at Sungai Lembing, Pahang. Malaysia Smelting Corp has been aggressive in securing tin concentrates after PT Koba Tin ceased its operation in year 2013.

Malaysia Smelting Corp has seen a declining revenue since 2011, alongside with the falling LME tin price, while its core profit has maintain at its 2012 level due to strong cost control by the management. However, impairment on receivables remain a big issue for Malaysia Smelting Corp. It has a relatively strong balance sheet, which cash and cash equivalent standing at 103 million and borrowings worth 83 million.

Yunnan Tin in China, PT Timah Persero in Indonesia and Minsur SA in Peru are the major players in tin production. Malaysia Smelting Corp has the second largest tin production but its market cap lags its peers for billions.

Advantages

·         Strong ROCE over the years

·         Diverse source of tin ore helps to prevent any supply disruption

·         Significant pricing power as MSC is the world second largest producer

Disadvantages

·         Short mining lease

·         Lack of available land for mining

·         Small area of mining tenement granted by state authority

Conclusion

In short, Malaysia Smelting Corp is a good proxy for tin price recovery and an indirect proxy to the future economy which relies on electricity and battery. Its valuation still lagged its peer and we believe the market would eventually fill up this mispricing gap.

Labels: MSC
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soojinhou Msc is closer to a smelter than a miner. Most of the ore material are imported, as ore from rahman tin constitute less than half of their raw material.
27/07/2017 7:17 AM

Tin: The next superstar metal after lithium

Author: DonkeyStock   |  Publish date: Wed, 26 Jul 2017, 12:01 AM


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Malaysia Smelting Corp: A company involved in tin mining and tin smelting.

 

Tin Market Outlook

Every once in a while, a previously underappreciated metal rises to prominent. It can be the result of

·         New technology

·         Changing preference

·         Supply Constraint

·         Skyrocketing demand

Application of tin

·         Soldering for electronics industry

·         Tin chemicals is largely used in PVC stabilisers, where application such as roofing, windows profiles and bottles where the tin prevents the PVC from degrading in heat and light. It is also the most price sensitive application

·         Tin is used in food cans where tinplate are generally used in packaging for paint, edible oils or dry food.

·         Lead-acid batteries are a relatively new market for tin but set to become the fourth largest single use of tin over the next decade. Tin is added into battery grids, connectors and some electrolyte formulations. Rapid growth markets are in e-bikes internet cloud storage backup, hybrid cars and alternative energy. China policy to replace cadmium and antimony based products with tin alternatives has led to a tremendous growth for tin use in lead-acid batteries.

·         Others: Glass coating, alloy, catalyst, dental product, pharmaceuticals and chromium passivation in cement. A revival in wine and spirit packaged in tin bottle/capsule are growing popularity in Europe

Consumption

The world demand for tin runs at roughly 340,000 tonnes per year. China (147,000), Japan (25,500) and USA (30,000) are the major consumption countries

Future

·         Solders in electronics today are experiencing a conversion to lead-free. Completion of the lead-free solder transition in China and the rest of the world could represent an additional consumption of more than 20,000 tonnes per annum (tpa) of tin.

·         Fire retardants: Tin-based fire-retardant products such as zinc stannates have been used in polymers for some years but market growth has always been restricted by price competition from antimony trioxide. However, the price gap is narrowing significantly and antimony trioxide is coming under some environmental pressure

·         Brake pads: Tin sulphide is now being marketed as effective replacement for antimony sulphide in vehicle brake pad.

·         Stainless Steel: Tin is expected to replace chromium and some nickel in this application for stainless steel as it gives better corrosion resistance and better formability. Nippon Steel, Japan is the pioneer in this field and this application will increase an extra demand of 15,000 tpa of tin consumption

·         Lithium ion batteries: Conventional technology uses carbon as an electrode in batteries. Adding tin to lithium-ion battery electrodes can increase capacity by 4 times. With the ever growing demand of electronic products and electric vehicle, successful implementation of tin technologies in lithium ion batteries could result in at least 17,000 tpa new tin use

·         Solar cell: A 30% tin-content material, kesterite is the new generation material for solar cell replacing conventional rare earth material which are expensive. Future market for alternative energy such as solar cells are huge and we will need the equivalent of one new nuclear power station every other day by 2050.

·         Fuel cell: Tin has shown excellent performance for being a catalytic material in ethanol fuel cells. Demand is expected to grow from 2020 where liquid tin anodes are installed for large biomass or coal power generation plants.

·         Fuel catalyst: Fuel catalyst based on tin alloy pellets are added into vehicle fuel tanks, saving up to 10% of fuel and reduce emission of up to 59%. This can also be used in power generators, marine and boiler applications

·         Anti-microbial healthcare: Tin and zinc fluoride combinations are highly effective anti-viral and wound-healing agents.

·         Laser: New electronic materials such as germanium-tin for lasers have recently attracted attention for use in photonics where light beams will replace copper to transfer data much faster in the future.

·         Unlimited potential: Stannene, a single atomic layer of tin is the only material to theoretically conduct electricity at 100% efficiency, with better performance than today superstar material graphine. No application has used this technic but it lead humanity to boundless imagination.

In short, the future and green economy runs on tin

Production

The world produces a roughly 330,000 tonnes of tin per year with China (154,000), Indonesia (64,000), Malaysia (29,000) and Peru (20,000) the major producer. Recently, Myanmar has increase its production significantly (More than 10,000 increase in FY 2015)

 

Supply Deficit

·         China tin production has fallen by over 10% over the last 2 years. Most private mines in Yunnan has been closed and some high cost operation have also been shut. Southern Mines operation in Hunan, run by the third largest tin mining company in China, has been closed in June 2015 due to environmental problem. As a result, China smelters had relied heavily on imported tin concentrate as raw material.

·         Indonesia export regulation come into place in Sept 2013, where refined tin was required to meet higher quality standards and to be trade through Indonesia Commodity and Derivatives Exchange (ICDX) prior to export. In Aug 2015, Indonesia seeks to further control supply by placing greater scrutiny on mining leases and production plan. This could theoretically restrict purchases of ore from illegal small scale miner if implemented strictly.

Unlike corn or oil, most government don’t have strategic stock pile for tin and we had seen a decreasing world stock ratio (Weeks of consumption), where the consumption rate in 2009 takes 7.4 weeks to use up the inventory decrease to 3 weeks in year 2016.

2009

2010

2011

2012

2013

2014

2015

2016

7.4

5.1

4.3

5

4.3

4.8

3.9

3

 

Threat

·         Miniaturisation of electronics means some solder joints are becoming very small. Besides, circuit board design is also changing, where solderless assembly if developed cost-effectively, solder use in electronics could be significantly reduced

·         Research is underway to reduce tin use in tin plate while Low Tin Steel (LTS) products already exist in Japan.

·         Tin Free Steel (TFS) represent a significant proportion of steel packaging in Japan where tin was replaced by chromium

·         Tin chemical facing a strong environmental pressure in Europe

 

Conclusion

Although tin price has been rising, it is nowhere at all-time high and we believe tin will be the metal of the decade

 

  4 people like this.
 
cheoky gogogo msc
26/07/2017 12:56 AM
Armada An Quantum Leap Stock In 2019/2020 Where is MoneySIFU ?
He is going to love this article .
26/07/2017 1:07 AM
paperplane mSC. Yes. Good cash flows. Wonder why ppl never realized this gem
26/07/2017 1:18 AM
26/07/2017 7:16 AM
soojinhou The last I heard, they still have not found a solution to increase the life of tin based rechargeable batteries, which holds 4x the charged compared to li-ion but deteriorates after a couple of recharges. Not sure about the latest development, but if they manage to solve this issue, demand for tin should skyrocket.
26/07/2017 7:53 AM
Bruce88 Perstim is also a notable company in this tin industry..
26/07/2017 8:31 AM

Successful M&A: What kind of merger and acquisition creates value for shareholders?

Author: DonkeyStock   |  Publish date: Sun, 23 Jul 2017, 12:03 AM


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Successful Merger and Acquisition

There is no magic formula to make acquisitions successful. Acquirers in the most successful deals have specific, well-articulated value creation ideas going in. For less successful deals, the strategic rationales such as pursuing international scale, filling portfolio gaps, or building a third leg of the portfolio tend to be vague.

The strategic rationale for an acquisition that creates value typically fits at least one of the following types:

·         Improving the performance of the target company

·         Removing excess capacity from an industry

·         Creating market access for products

·         Acquiring skills or technologies more quickly or at lower cost

·         Economy of Scale

·         Picking winners early

·         Roll up Strategy

·         Improve competitive behaviour

·         Transformational merger

·         Buy Cheap

Improve the target company’s performance

Buy a company and radically reduce costs to improve margins and cash flows. In some cases, the acquirer may also take steps to accelerate revenue growth.

​Eg: CMA CGM buy NOL

Consolidate to remove excess capacity from industry

As industries mature, they typically develop excess capacity. It is in no individual competitor’s interest to shut a plant. Hence, companies find it easier to shut plants across the larger combined entity resulting from an acquisition.

​Eg:Lafarge Holcim merge to in to remove excess capacity in industry.

Create Market Access for target’s product

Relatively small companies with innovative products have difficulty reaching the entire potential market for their products. Small pharmaceutical companies, for example, typically lack the large sales forces required to cultivate relationships with the many doctors they need to promote their products. Bigger pharmaceutical companies sometimes purchase these smaller companies and use their own large-scale sales forces to accelerate the sales of the smaller companies’ products.

​Eg: Karex buy Trojan brand. Pasante offers a wide range of sexual wellness products including condoms, lubricants, HIV test kits, pregnancy test kits and others.

Acquire skills or technologies faster or at lower cost

Many technology-based companies buy other companies that have the technologies they need to enhance their own products. They do to acquire the technology more quickly than developing it themselves, avoid royalty payments on patented technologies, and keep the technology away from competitors.

Eg: Apple bought Siri in 2010 to enhance its iPhones.

Economy of Scale

Economies of scale are often cited as a key source of value creation in M&A. However, justifying an acquisition by economies of scale, especially for large acquisitions who are already operating at scale may not lead to any substantial savings.

Eg: Malaysia banks merge in year 2000 mega merger, reducing number of branch and operation cost.

Pick winners early

Making acquisitions early in the life cycle of a new industry or product line, long before most people recognize that it will grow significantly. This acquisition strategy requires a disciplined approach by management in three dimensions. First, you must be willing to make investments early, long before your competitors and the market see the industry’s or company’s potential. Second, you need to make multiple bets and to expect that some will fail. Third, you need the skills and patience to nurture the acquired businesses.

Eg: CJ Group stake in Century Logistics

Roll-up strategy

Roll-up strategies consolidate highly fragmented markets where the current competitors are too small to achieve scale economies. This strategy works when businesses as a group can realize substantial cost savings or achieve higher revenues than individual businesses can. For example, several companies can also coordinate advertising across a city to reduce costs and raise revenues.

​Eg: Consolidation of Petronas supplier

Improve competitive behaviour

Many executives in highly competitive industries hope consolidation will lead competitors to focus less on price competition, thereby improving the ROIC of the industry. Usually an industry that consolidates into just three or four companies can keep out new entrants. This will change the industry pricing behavior, which is usually a lesser price war among industry players.

Eg: Telecomunication provider

Transformational merger

A strong intention and goal to transform one or both companies.

Eg: IOI buy Dunlop, transforming rubber plantation company into and full fledge value chain palm oil company including oleo chemical operation.

Buy cheap

Buy at a price below a company’s intrinsic value. In cyclical industries, assets are often undervalued at the bottom of a cycle and this present opportunities for companies to buy targets at levels below their intrinsic value.

Eg: Mamee double decker privatised

​By focusing on the types of acquisition strategies that have created value for acquirers in the past, managers can make it more likely that their acquisitions will create value for their shareholders.

 

Malaysia Titans: Malaysia largest companies in a quick guide

Author: DonkeyStock   |  Publish date: Sat, 22 Jul 2017, 12:04 AM


 

 

 

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Malaysia Titan

A quick view on Malaysia largest companies, presenting their business segment and geographical presence.

​Malaysia top 12 largest companies in terms of market cap as of 30 June 2017:

·         Maybank

·         Tenaga Nasional

·         Public Bank

·         Sime Darby

·         CIMB Group

·         Petronas Chemical

·         IHH Healthcare

·         Axiata

·         Maxis

·         Digi.com

·         Petronas Gas

·         Genting Bhd

  2 people like this.
 
firehawk thks for sharing!
22/07/2017 12:15 AM

Pintaras Jaya - He can build KL118, he can build you a strong portfolio

Author: DonkeyStock   |  Publish date: Fri, 21 Jul 2017, 12:01 AM


 

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Pintaras Jaya     

Pintaras Jaya is a company listed in Malaysia. It is involved in two business activities, mainly geotechnical and foundation engineering services and manufacturing of metal containers. Its construction service arm which is involved in civil engineering works, manufacturing and installation of pre-cast concrete retaining walls also provides a wide range expertise involving:

·         Piling System – Driven Piles, Micro piles, Jack in Pile, etc.

·         Earth Retaining System – Required for construction of building basement, stabilization of earth slope

·         Substructure and Basement – Substructure works below building and activities dealing with groundwater

·         Ground Improvement – Increase the carrying capacity and performance of ground

·         Civil Engineering Work – Mainly bridges, earthwork and roadwork

As for its manufacturing arm, it manufacture roughly 8 million metal pails and cans annually with customer from the paint, chemical, lubricant, lacquer, confectionery & food industries. Some of its customers are big names including BASF, Boustead Sissons, Colourland, Jotun Malaysia and Kansai Paint.

Pntaras Kaya had executed many projects, some of the notable one include JB Sentral, JB CIQ Complex, iCity Shah Alam, Guthrie Corridor Expressway, Mont Kiara, Pavilion, Menara Merdeka KL118 and various property high rise.

Financial performance wise, Pintaras Jaya had record a great ROCE and profit margin except for year 2016, where margin are squeezed due to lower construction activities and lesser contract being executed. A bleak future may be the concern of many investors as several on-going project are nearing completion and there is an alarming sign of slowing property development activities. However, we has seen a strong performance from its manufacturing division for the year 2016 where it has contributed more than a quarter of Pintaras Jaya profit. Besides, its strong balance sheet which has zero debt and cash position of RM127 million will certainly provide a strong buffer for Pintaras to manoeuvre over any headwinds.

In 2011, Pintaras has disposed of its loss making plastic packaging business, Cornplast Packaging. Since then, resources are devoted to the remaining two division. As of FY 2016, Pintaras strong capital expenditure plan has enable him to execute projects up to RM250 million and a new automated pail line is now in operation for its manufacturing division.

With upcoming mega infrastructure construction in Malaysia and experience in piling for the world third highest tower, Pintaras Jaya is suitable for investors who seek for dividend and growth. 

 

Labels: PTARAS
  2 people like this.
 
godhand love it
22/07/2017 9:15 AM

Sector Rotation: What is sector rotation and how can you deploy the strategy

Author: DonkeyStock   |  Publish date: Thu, 20 Jul 2017, 12:03 AM


 

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Malaysia Titans: Malaysia largest companies in a quick guide.

 

What is Sector Rotation?

Sector rotation is an investment strategy involving the movement of money from one industry sector to another in an attempt to beat the market. To implement a sector rotation strategy, investors deploy a “top down” approach. This involves an analysis of the overall market—including monetary policy, interest rates, commodity and input prices, and other economic factors. This can help investors assess the current economic environment and determine the current phase of the business cycle.

Key economic factors for each sector or industry can also help you create an estimate of future performance for each sector. Depending on the phase of the business cycle, certain sectors may be expected to outperform others.

Every business cycle is different in its own way, but certain patterns have tended to repeat themselves over time. Fluctuations in the business cycle are dependent on three key cycles—the corporate profit cycle, the credit cycle, and the inventory cycle—as well as changes in the employment situation and monetary policy.

 

Economic Cycle in Four Stages  

Early Cycle 
GDP has been retracting, interest rates are falling; consumer expectations have bottomed; and the yield curve is normal. Credit conditions stop tightening alongside with easy monetary policy, creating a healthy environment for rapid profit margin expansion and profit growth. Business inventories are low, while sales growth improves significantly. Sectors that have profited most in this stage include:

·         Cyclical, Financial and transports (near the beginning)

·         Technology

·         Industrials/Capital Goods (near the end)

 

Mid Cycle
Consumer expectations are rising; industrial production is growing; interest rates have bottomed; and the yield curve is beginning to get steeper. Longest phase of the business cycle. Credit growth becomes strong and profitability is healthy. An increasingly neutral monetary policy. Inventories and sales grow, reaching equilibrium relative to each other. Sectors that have profited most in this stage include:

·         Industrials/Capital Goods (near the beginning)

·         Basic materials

·         Energy (near the end)

 

Late Cycle 
Interest rates can be rising rapidly, flattening yield curve; consumer expectations are beginning to decline; and industrial production is flat. This phase is “overheated”, poised to slip into recession and hindered by above-trend rates of inflation. Tightening credit, deteriorating corporate profit margins. Inventories tend to build unexpectedly as sales growth declines. Sectors that have profited most in this stage include:

·         Energy (near the beginning)

·         Staples/Consumer Defensive

·         Healthcare Services (near the end)

 

Recession 
Things start to go bad for the overall economy. Consumer expectations are at their worst; industrial production is falling; interest rates are high, flat or inverted yield curve. Credit is scarce and inventories gradually fall despite low sales levels, setting up for the next recovery. Sectors that have profited most in this stage include:

·         Healthcare Services (near the beginning)

·         Utilities

·         Cyclical, Financial and transports (near the end)

The primary driver of sector rotation is currency value, inflation level and interest rates. As the economy expands, demand for raw materials creates inflationary pressures, which in turn prompt higher interest rates, which increase the value of the currency, which reduces the competitiveness of a country's exports as the currency causes them to cost more to other countries. This final stage causes the economy to contract, reducing demand for raw materials, which creates deflationary pressures, which in turn prompt lower interest rates, which decrease the value of the currency, which increases the competitiveness of a country's exports—creating a new market cycle. 

Risk

By adopting a sector rotation strategy, you run the risk that your portfolio may experience increased volatility and may underperform the broader market indexes. In addition, diversification reduces risk.

 

  3 people like this.
 

[Infographic] An overview on crude oil and refineries

Author: DonkeyStock   |  Publish date: Wed, 19 Jul 2017, 12:02 AM


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There are 6 refinery plants in Malaysia and 3 refinery plants in Singapore. The current refining capacity of Malaysia plants stands at 539,000 barrels per day (bpd) and is expected to add another 300,000 bpd capacity once RAPID commence operations. The refinery in Malaysia are located in Kerteh and Kemaman in Terengganu, Sungai Udang Melaka, Pengerang Johor and 2 refinery in Port Dickson Negeri Sembilan. The current refining capacity of Singapore stands at 1,380,000 bpd. Shell operates a refinery in Pulau Bukom while Exxon Mobile and Singapore Refinery operates refinery at Jurong Island.

 

Crude oil undergoes a process called fractional distillation in the refinery plants. Crude oil is being heaten to crack down to shorter hydrocarbon chain under different temperature. The major by products are refinery gas, petrol, naphtha, kerosene, diesel, lubricating oil, fuel oil and bitumen.

 

Here are some of the factors that affects the cost of input for a refinery plant:

·         Crude quality (Transport method, local region demand and supply)

·         Energy Inputs (Electricity, steam)

·         Blending components (Gasoline, biofuel, gas, liquids)

·         Supply Chain management

·         State flexibility

·         Fiscal and regulatory regime

·         Scale and technology

·         Hedging (Feedstock, currency, products)

 

And here are some of the factors that affects the price of output for a refinery plant:

Fuel and energy

·         Wholesale or retail sales

·         Export or local sales

Specialties product

·         Specialist market (Marine, Aviation, Asphalt)

·         Brand Quality

Petrochemical

·         Value chain of the petrochemical

·         Export of local sales

Lubricants

·         Base oil plant

·         Blending plant and storage

 

However, a huge chuck of refinery profit relies on crack spread, which is the profit margin of an oil refinery made by cracking long chain hydrocarbon into shorter chain petroleum products. Some of the factors that affect crack spread includes:

·         Crude Delivery Method

·         Crude Cost

·         Refinery Efficiency

·         Dispatch Facilities

·         Refinery Location

 

Different type of crude oil affects the profitability of refinery plant. Here are some of the technical term you need to know before delving further

·         API Gravity is a measure of how heavy or light a petroleum liquid is compared to water. If API gravity is greater than 10, it floats on water. The greater the number, the lighter the petroleum. Heavier crude are harder to refined

·         Sulphur content: Sulphur is an impurities found in crude oil. When sulphur level is more than 0.5%, the oil is called sour. Impurities need to be removed before the sour oil can be refined into petrol

And here is a list of benchmark crude oil, unconventional oil and crude oil produced in Malaysia

 

Crude Name

Major Production Area

API Gravity

Sulphur Content (%)

       

Benchmark Oil

 

 

 

Brent Blend

North Sea

38.7

0.31

WTI Blend

US

38.7

0.45

Arabian Light

Saudi Arabia

33.4

1.8

Isthmus

Mexico

33.4

1.25

Bonny Light

Nigeria

33.4

0.16

Urals

Russia

31.7

1.35

Fateh

Dubai

31.4

2

Tapis

Malaysia

45.2

0.03

       

Unconventional Oil

 

 

 

Shale Oil

North Dakota

40.1-50

0.15 - 1

Oil Sand

Alberta Canada

10

5

       

Malaysia

 

 

 

Bintulu Condensate

Bintulu, Sarawak

69.3

0.03

Dulang

Terengganu

37.6

0.05

Kikeh

Sabah

34.9

0.11

Labuan

Labuan

32

0.09

Tapis

Terengganu

45.2

0.03

Miri

Miri, Sarawak

32.3

0.08

 

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19/07/2017 7:25 AM
yruns1 wow this is great stuff. Thanks!
20/07/2017 1:32 PM
yruns1 forgive my ignorance.. can you please enlighten me on the difference between the refineries mentioned here and the plants under Lotte Chemical in Johor or under BASF-Chemicals in Terengganu?
Thanks!
20/07/2017 2:15 PM
DonkeyStock Different refineries has different complexity. Nelson Complexity Index (NCI) is an index to determine its complexity. A more complex refinery can produce more products and can use more type of crude oil as input. Here is Lotte Titan product:http://www.lottechem.my/products/productGuide_view.asp?code=C201 and here is Petronas BASF product http://www.basf-petronas.com.my/products. You can say BASF Petronas has a more complex output product, but its not a guarantee of profitability. Profitability still depends on the crack spread margin between input price and output price
27/07/2017 11:54 PM
yruns1 Thanks for your explanation. However since your infographic mention MY only have 6 refinery, shouldn't the number be more?
27/07/2017 11:59 PM
newbie5354 Using this blog how to forecast Q3 QR?
29/09/2017 10:27 PM


 

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