Author: teoct   |   Latest post: Wed, 27 Nov 2019, 11:37 AM


Good reads

Author: teoct   |  Publish date: Wed, 27 Nov 2019, 11:37 AM

The last time I wrote was July 26, 2019. (Yes, I posted someone else essay on Aug 8, 2019 that I did not write.)

I have been spending the time in continuous education and I have learnt new knowledge and relearn some knowledge that I would like to share with you all.

Hans Rosling, Swedish, wrote Factfulness. Wonderful book, full of data and nice bubble graphs. There are many jewels and one that we all should know is about babies and religions, my prejudice stands corrected that average babies per woman is independent of religion. From the book, Factfulness are the two illustrations:


And here is Iran:


Do listen to him, https://www.ted.com/talks/hans_rosling_religions_and_babies?language=en, now it is so fortunate of technology as he has passed on in 2017. But his legacy will be continued by his son, Ola and daughter-in-law, Anna.

Another author that I would like to introduce to you is Jared Diamond (US) who wrote -Guns, Germs and Steel (GGS), Collapse and the latest Upheaval and many more. I did not read GGS, but Collapse and now reading Upheaval. Excellent books on why communities collapse and how some nations cope with crises.

In addition, I was introduced to Vaclav Smil (Czech) by my daughter. Yet to get his book, but his talks are most illuminating and Bill Gates consider him among his favourite authors. Here is a good introduction of him https://www.sciencemag.org/news/2018/03/meet-vaclav-smil-man-who-has-quietly-shaped-how-world-thinks-about-energy and here is his “blog” vaclavsmil.com/category/news/

And finally, the last person I want to introduce that I just recently become acquainted is Tadeusz (Tad) Patzek (Polish). Here is Wikipedia on him https://en.wikipedia.org/wiki/Tadeusz_Patzek and here is the link to his blog - https://patzek-lifeitself.blogspot.com/

They are all highly educated and I would call them experts. They certainly articulate very well the precarious condition earth is in and also some of the nonsense on renewables.


Source: Kruger, Justin; Dunning, David (1999). "Unskilled and Unaware of It: How Difficulties in Recognizing One's Own Incompetence Lead to Inflated Self-Assessments," Journal of Personality and Social Psychology, 77 (6): 1121–1134.

From Tad, I learnt: "In the field of psychology, the Dunning–Kruger effect is a cognitive bias in which people of low ability have illusory superiority and mistakenly assess their cognitive ability as greater than it is. The cognitive bias of illusory superiority comes from the inability of low-ability people to recognize their lack of ability. Without the self-awareness of metacognition, low-ability people cannot objectively evaluate their competence or incompetence.

As described by social psychologists David Dunning and Justin Kruger, the cognitive bias of illusory superiority results from an internal illusion in people of low ability and from an external misperception in people of high ability; that is, the miscalibration of the incompetent stems from an error about the self, whereas the miscalibration of the highly competent stems from an error about others. " (The highlights are by Tad)

The more I educate myself, I realized that there is a lot I still do not know.

You may (rightly) ask what all these authors have to do with investing, well I also do not know precisely, but I do know now:

-          that population growth will soon tapper off; and in many countries (Japan, South Korea, China, Vietnam, Malaysia, in some order of ranking) population will soon decrease (without immigration); this should impact consumers counters in the medium / long term


-          the developed countries are using far more resources (energy) than the rest of the world on a per capita basis while on absolute terms China / India beats them and more due to the huge population, but “we forgive them” as an Indian expert said during a Davos WEF 2007 forum (do read Factfulness page 140); but population in developing countries still aspire to live like developed countries, so energy consumption will always increase while the developed countries do not want to cut back as they want to maintain their standard of living; consumptions of energy (fossil fuels, copper, iron, coal, etc) will increase and these commodities from easy to get mines are already exhausted and will have to come from deeper or less productive mines – cost will go up so will prices of these commodities sooner or later


And so on …


Happy reading / learning.

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Fabien "The Efficient Capital Allocater" i currently reading Factfulness. Had completed the Jared Diamond's trilogy
27/11/2019 1:53 PM
teoct Wonderful, Fabien.
27/11/2019 3:43 PM
Choivo Capital Jared diamond is a god.

Posted by Fabien "The Efficient Capital Allocater" > Nov 27, 2019 1:53 PM | Report Abuse

i currently reading Factfulness. Had completed the Jared Diamond's trilogy
02/12/2019 9:59 PM
teoct Choivo, how have you been? Have been quiet lately.

Yes, Jared Diamond is good, but god, hmmm. Nevertheless, it really opened my eyes to so many outdated ideas I had.
04/12/2019 9:05 AM

Nobody Gives a Damn About Climate

Author: teoct   |  Publish date: Thu, 8 Aug 2019, 2:49 PM

Nobody Gives a Damn About Climate

On self-absorption of environmentalism

Michael Petraeus – July 22, 2019



You would be hard-pressed to find a day when another apocalyptic piece of news about the state of our planet doesn’t hit the headlines. The narrative of impending doom is gushing out from every corner of the web, every newspaper, every TV channel.

And yet, I can’t easily dismiss the observation that the supposed solutions, which are being touted as remedies for the apparent horrors that lay ahead are grossly – and strangely – inadequate.

In other words – none of what we’re being told is supposed to solve the issues appears to be even remotely rational. And that, in turn, undermines the entire narrative of environmentalism. If the situation is really so bad and we must undertake dramatic efforts to save the planet and ourselves, why are some of the best solutions available to us so easily dismissed by the same people who claim to represent scientific views on the matter?

Irrelevance of Climate Change

I’m not a climate expert by any stretch of imagination and I’m not here to discuss what and why is happening. Partly because tenured researchers around the world are paid enough to provide explanations and possible future scenarios – and partly because it doesn’t really matter.

Our forecasting capabilities – in any domain of life – are greatly flawed (to say the least). We can’t reliably predict the next economic downturn, results of the next football match or the weather next Tuesday. But we do know for sure anything that we can accurately measure using scientific instruments. On this basis, we know that average global temperatures are rising, because we track them over time.

Looking into our future it is of secondary importance “why” it happens. Of course it would be great to know with absolute certainty (so we can gain more direct control over it) but as we are facing possible consequences, mitigating them is our primary objective.

If the temperatures are going up and the poles indeed do melt and we all get flooded, does it really matter whether it’s because we’re burning too much coal or that simply such is the nature of a warm interglacial period?

Currently accepted explanation is that the main culprit is CO2 emitted by humanity. Many skeptics will protest that a gas which forms merely 0.04% of Earth’s atmosphere – with a human contribution to annual emissions at paltry 5% (with 95% coming from natural sources) – surely cannot be the reason of a planetary apocalypse. But, again, even if they turned out to be right, it doesn’t matter. Why? Because we have to move on from using fossil fuels to power the world anyway.

If not to reduce the CO2 output then to eliminate countless other harmful emissions that contribute to pollution and smog which kill millions of people every year. I think we can all agree on this one.

 The biggest problem in climate drama is not the disagreement about causes but the disagreement on solutions.

We need better energy sources than burning things we dig out of the ground. Given more than a century of experience with electricity generation, we also know what the properties of an ideal energy source are – cheap, abundant, offering stable delivery (with a degree of flexibility to manage supply and demand), reliability of operation, its longevity and environmental cleanliness.

There’s only one source that fulfills those criteria today – nuclear fission.

And this is where widespread irrationality begins to manifest itself.

All the people supposedly dedicated to saving the planet are dismissing evidence telling us that for humanity to abandon fossil fuels and still provide for its needs, it has to employ nuclear power. Of course, you may be convinced that nuclear power is not worth the risk, that technology is progressing all the time and that soon enough we will be able to power the planet using safe and clean renewable energy sources.

The problem is that the math doesn’t check out.


Despite serious efforts, humanity is currently burning more fossil fuels per year than ever before. In fact, their consumption is expected to grow by another 20% by year 2040.

In other words, our appetite for coal and gas is not going down – it’s going up – regardless of all the media buzz and celebration of every solar panel and windmill installed.

Even Germany, praised as the paragon of good progress, is actually building new coal power plants and coal mines as I write this article.

After spending hundreds of billions of euros in investments and subsidies (up to a target of 500 billion euros by 2025), Germany is still set to miss its goals for emissions reduction.

In fact, despite the horrendous expenses, Germany’s CO2 emissions have stayed largely the same in the past 10 years, while electricity prices have increased by 50% since 2006 – mainly due to increases in environmental surcharges that shift the costs of investments onto the consumers.

At the same time, the main victim of Germany’s energy policy has been nuclear power, with its share in national power production dropping by 50% in recent years, gradually replaced not only by supposedly clean solar and wind power, but also by gas and lignite.


In spite of all these sacrifices, Germany is still the largest CO2 polluter in Europe and releases nearly twice as much carbon dioxide as neighboring France – which relies for close to 75% of its energy needs on nuclear power – with the rest provided by renewable hydro / wind / solar sources. Share of fossil fuels in the mix is below 10% there.

And yet, despite all of these achievements it’s not France, but Germany, that is being held up as an example.

Let’s summarize this madness – we’re told that our role model should be a country which spends inordinate amounts of money with very limited reduction in CO2 emissions, while drastically elevating electricity prices and adding new coal power plants to keep itself from plunging into darkness. How exactly is this considered “progress”?

Nobody who seriously believes in reducing carbon dioxide emissions can possibly consider German experiences to be a success. Still, you may feel inclined to think that these are just teething problems, that early adopters always stumble and pay the higher price, but when technology matures it will all be well.

It won’t.

Renewables Keep Fossil Fuels Alive

I could go on about how solar and wind power plants impact the environment, that they take up enormous amount of space that either needs to be cleared of wildlife (even in the deserts) or interferes with it (by killing millions of large birds – many of them endangered). At the end of the day arguments could still be made that other energy sources cause significant damage as well.

There is, however, one characteristic of renewable power sources that cannot be easily dismissed or mitigated – and which calls into question rationality of the entire concept.

They do not produce electricity in a stable, reliable manner – and when they fail to deliver (e.g. in the evenings, when there’s no sun) other sources have to kick in. It so happens that these sources have to be fossil fuels.

These peaking power plants – mainly utilizing natural gas – are built for the sole purpose of filling the gaps in supply – albeit it at a much higher cost.

As a result, the current modus operandi is to build new fossil fuel plants to help “keep the lights on”, as the German energy secretary put it last year, when the government faced protests over cutting a forest to build a new coal mine (yes, you read that right).

Notably, the role of a peaker cannot be served by nuclear plants since they are not suited for flexible operation that can rapidly add or reduce the power output to match changing demand. They are designed for continuous, efficient operation 24/7/365.

In essence – using wind and solar power supports future demand for fossil fuels.

Some of you may protest at this point – “wait a minute, what about batteries which can store excess electricity and later distribute it when it’s needed?”.

The problem with that idea is that the more solar and wind farms you build, the greater the capacity of power storage has to be in order to handle extreme peaks in supply without frying the entire electric grid.

This is especially pronounced with seasonal peaks in production – e.g. solar power in the summer. Batteries work decently well in handling daily fluctuations, which require relatively small storage facilities. But gathering excess electricity to power the country for months would require enormous facilities which would cost hundreds of billions if not trillions of dollars – as detailed in this article from MIT Technology Review.


“Building the level of renewable generation and storage necessary to reach [California’s] goals would drive up costs exponentially, from $49 per megawatt-hour of generation at 50 percent to $1,612 at 100 percent. And that’s assuming lithium-ion batteries will cost roughly a third what they do now.“

And I haven’t even touched on other issues – like the fact that lifespan of turbines and solar panels is only 20-25 years – with their efficiency decreasing over time by as much as 50%. Or that discarded equipment – especially the panels – are going to cause a recycling disaster by mid-century, rising from current 250,000 tons globally to nearly 80,000,000 tons by 2050.


Simply put, renewables are unlikely to cover 100% of our energy needs. Ever.

We may dream that, in some distant future, when we invent new types of batteries that are cheap and endlessly reusable, perhaps we would be able to store electricity for months or years on end and use it as we please.

But to impact the climate we need to take action today not in 50 years time – and the technology that allows us to draw power from renewable sources is simply not enough. It means that the missing chunk has to be generated elsewhere.

Since we should not rely on fossil fuels then the only option left is nuclear.

But if we need to use nuclear power anyway, then why not use it for all of our needs? Why go through enormous complexity of an unreliable system based on solar panels and windmills when we can simply build more reactors which generate power all the time, without crazy surges and drops?

And yet, try having a conversation about nuclear power with self-professed environmentalists and you’re likely to end up a victim of an assault. Activists have already led to vilification and complete destruction of German nuclear sector – yet somehow it doesn’t seem to bother them that resulted in higher carbon dioxide emissions.

So is it really about climate? If even eco-activists are blindly ignorant (or, perhaps, deliberately manipulative) then why should the rest of us be bothered?

Nobody Really Cares

And this phenomenon, this widespread anti-nuclear hysteria actually reveals the true nature of environmentalism. It’s not really about the the planet – it’s about the egos (and perhaps economic interests) of all the participants.

The same shallow, egotistic behavior is what drives other bouts of virtue signalling, like the bans on plastic straws – which have minuscule share in general plastic waste but it’s enough for millions of people to feel like they’re doing something – without actually doing anything.

Climate change isn’t really treated like an issue that requires rational scientific and engineering solutions, but a fashionable trend.

We’ve commercialized it to serve our self-image. In democratic countries, this trend is driving political decisions, regardless of how sane they are. As a result billions of dollars and euros are being blindly pumped into renewable technologies simply because it helps score political points, rather than solve real problems – especially as nuclear power suffers bad press.

Since politicians are not spending their own money, they’re only too happy to oblige and dump the tax proceeds into yet another wind or solar farm – and then shift the added burden back on the users via another price hike.

But people will gobble it up as they believe they are helping the planet, so sacrifices may be necessary in order to save it, rather than examine and support technologies that would solve the issue of CO2 generated in the process of electricity production forever. Technologies we possess and have decades of experience in using.

Alas, being pro-nuclear isn’t cool, regardless of how much it would help the environment. You can’t put it on a canvas bag and pretend you’re a kind-hearted, animal loving hippie because reliance on uranium instead of wind and sun rays just doesn’t provide that much social currency.

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Perdana to provides financial assistance to Dayang?

Author: teoct   |  Publish date: Fri, 26 Jul 2019, 2:32 PM

Perdana to provides financial assistance to Dayang?

When this was announced, I almost fell off my chair.

How could that be when everyone (unless one just started investing yesterday or arrived from Mars) knows that it is the other way.

The loan (SUKUK), RM 682.5M, offer (letter) to Dayang must have reached the desk for Board consideration. Thus, caused Perdana having to make the announcement to seek minority approval to provide “financial assistance” to Dayang as this is part of the SUKUK terms and conditions.

What is this “financial assistance”?

They are:

  1. Corporate guarantees (i.e. if Dayang default, the financial institutions will seek payment from Perdana, seriously!)
  2. Collaterals such as “titles” of vessels (assume there are such “titles” much like vehicles / land titles that signify ownership), etc.

all in favour of the licensed financial institutions that will be giving the SUKUK (to Dayang).

And this financial assistance not only cover:

  1. RM 365M that will be advanced to Perdana to redeem Perdana’s SUKUK but the

RM 90M that Dayang advanced to Perdana in April 2019 to settle the annual payment

Total RM 455 M

  1. And cover the balance RM 227.5M that Dayang will use to re-finance Dayang existing loan that has nothing to do with Perdana.

a)+b) = RM 682.5M. Strictly speaking the RM 90M Dayang advanced to Perdana is Dayang own cash and has nothing to do with the offered SUKUK. Heck, never mind, worse to come.

Item 4 of the announcement said:

Additional financial assistance to be provided by the PPB Group to Dayang in favour of the licensed financial institutions which are not directly related to PPB’s borrowings (i.e. for the purpose of partial repayment of the Dayang Group’s existing borrowings other than the PPB Group)

Financial institutions requesting such “comfort”, especially b) above is absurd (there are stronger words, but this will do).

Will this reduce risk (of default by Dayang)? Does it add value to the whole process? Should Dayang ever come to the point of default, Perdana would most likely be underwater long before.

It increases cost to secure the SUKUK, money that can productively be used to produce gain that ensure repayment.

This reinforced my view that financial institutions take away umbrella when it rains. It just destroy goodwill through such poor execution.

They are so averse to the oil and gas industries now. O&G companies that can overcome current debt crisis will not only come out stronger but will rule the waves in years to come.

Just an old man rumbling. Life is never fair.

Its friday, happy weekend, don't drink too much.

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probability happy weekend boss
26/07/2019 7:47 PM
teoct No boss, friends/bro would be better, all equal here.

Have a productive weekend.
27/07/2019 10:47 AM

Hong Kong trouble / suicide

Author: teoct   |  Publish date: Fri, 26 Jul 2019, 10:20 AM

Thank you all for reading the post on Hong Kong trouble / suicide and comment.

Here is a reminder of Hong Kong importance to China:

So the fight for ?!?

Yes as a financial centre, Shanghai is catching up fast. Maybe surpass Hong Kong already.

So what, one get this freedom and that when the importance of Hong Kong to China become just that - nothing eventually. So, what is important? Food on the table or the right to free speech, what is free speech?

This fight between China ideal and the Western model is being played out on the street of Hong Kong.

(Thanks qqq3 for the link, much appreciated)

Just like BREXIT, London as a financial center to Europe become irrelevance then to the world too sooner rather later. Now with a leader who looks like lost in his own world, a lesson for all.

I hope to see this fight (China vs West) to some conclusion in my life-time.

Government of the peopleby the people, for the people


OF THE 1%, BY THE 1%, FOR THE 1%

Have a good weekend all.

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Hong Kong trouble - another perspective.

Author: teoct   |  Publish date: Wed, 24 Jul 2019, 9:35 AM

A Prophetic Response to the Hong Kong Students Protest
As I write this article, I am in my guest  room in HK after a very powerful and annointed evening of ministry. 
My heart is heavy when I see thousands of young people on the streets, protesting against the HK government of the day. The problem is compounded by the fact that Christians joined these protest...singing hymns & worship songs! 
My two cents on this issue:
1.   Why are the young people even on the streets? 
        Innocent, naive, promising young people should not be filled with so much anger n despair....who r behind them? What diabolical force is behind this instigation to impressionable youth to rebel against their leaders n elders? What evil hand is guiding these adults-to-be, to be so filled with violent rage against a law which probably is no direct concern of theirs anyway? 
         The law to be introduced was meant to extradite criminals or corruptors, who have broken the law or stolen taxpayers money, back to China to face justice. These criminals are mainly corrupt ex-government officials who stashed their illegal wealth in HK n abuse loopholes in the legal system to avoid prosecution. The extradition law if passed by HK legislators, would have brought these corrupt, immoral n dishonest abusers of power to justice! 
         I failed to comprehend why any right thinking HK citizens would reject this righteous law? 
         It is feared by our young protesters n the hidden powers behind them (their unknown financial backers?) that the China government may abuse the extradiction law to nab dissenters n critics of the communist party. 
         Talk about jumping the gun!
Some balance in analysis is helpful here! What we have here is a segment of HK young population who have been led into believing that civil society in China is so oppressed by the government.....that life under the communist govetnment is so unbearable... like in a police state.....if this is so, how do you explain the 150 million Chinese citizens who travelled overseas last year n return to China?? Truth is they return to China because they r happy in China....they actually live meaningful lives pursuing their dreams in communist China.....something which our young HK protesters n their western sympathisers can't wrap their heads around! 
         Lest HK forgets, be reminded that the Chinese government brought 800+ million people out of poverty the last 30 years! No nation in world history has ever done that.....not India, Africa, the Philippines, Indonesia, South America...most of whom follow the US political system of electoral democracy! 
         Truth be known...the vast majority of Chinese r behind their government.....they live in peace n happiness under this benevolent government....they prosper under the reformist policies of the government! 
         Once in a while you do hear of isolated incidences of injustice inflicted upon innocent victims by corrupt officials, especially in far-flung corners of China....managing reform in the largest country on earth is not an exact science! But thankfully these wayward officials r decreasing in numbers in President Xi Jin Ping's administration! 
         All in all, the Chinese experiment in socialism is working...down to the last man on the street..... to the horror of the west! 
         This success of the communist system in China is totally unacceptable to America n the West! It vilifies their value system.....their world view....their notion of freedom....it vilifies the sacred cow of the American dream! 
2.     HK Youth - Tools of the West in Containing China n the East? 
        At the end of the day, its all about money n power! Wake up all ye precious HK young people! America doesn't really care about your freedom nor democracy! Under the British, for 99 years, there was never any talk of universal suffrage....its a recent invention of the West in HK after 1997 to contain China. Just as the USA n their western allies forced the emerging Japan economic powerhouse in the 70s-90s to accept unfair trade policies, they r now doing all they can to stop China's growth....in the end its all about money n power! God forbids that China or any other Asia nation overtake the USA as leader n superpower! 
 3.      The USA n its allies use whatever they can, scruple or no scruple, to bludgeon China n the world into submission under their control, politically or economically! 
      3. 1   USA uses human rights to undermine China....this is off course the crudest joke in 300 years! The USA is surely one of the greatest abusers of human rights in history. Europeans colonised the New World by exterminating the Red Indians almost in their entirety.....when Europeans invaded North America in the 18th century, there were about 15 million Indians.....by the time they won the war with the Indians, over-powering the arrow-shouting with modern guns n rifles, only about 250,000 were alive.....white Americans massacred more than 14 million Red Indians.....it was genocide on a grand scale! And now, the USA has the gall to accuse China of human rights abusers... promoting themselves as the protector of human rights! 
       3.2   The USA uses the green movement to limit China's growth...accusing China n Asia summarily of green house gas emissions, pollution, deforestation...etc. The fact is that the USA n western Europe, which consist of 20% of the world's population, consume 80% of the world's resources including fossil fuels....contributing the most pollution ! 
       3.3  The simple fact is that HK young people r being used n manipulated to disrupt legitimate governing authority to undermine China...creating instability...for the ultimate goal of forcing China to concede more economic advantage to the US...in other words, using unfair n destructive tactics to contain China, just like they did to Japan before...in the 80s the US targeted Toshiba, the symbol of Japanese technological prowess back than.....just like they r attacking Huawei today. 
4.       As Christians what should be our response to the street protests? 
          4.1.   Peace.....all our responses must be non-violent. We must engage peacefully with government leaders to seek understanding...n suppress the spirit of rebellion n disobedience. 
      4.2. Respect....all leaders n government...its God who raised up government for his higher purpose. Street protest is unacceptable to true Christians. 
       4.3.  Build trust-relationship with both HK n China leaders....reach out...communicate positively....the communist government is not against Christianity nor other religions.....they r just against bad people who cause trouble under the pretext of Christianity. 
       4.4.  Prayer.....this is the most important n effective thing Christians can do. Pray for the young people...pray for HK n mainland government...pray for peace, understanding between HK n China.....most of all, pray for healing n revival through God's power n love. 
        4.5.    Finally, the youth r not necessarily bad people.....just manipulated n deceived.....by powers political n spiritual,  which they know little about! 
        May God save our precious young people in HK! 
Rev Dr Alvin Cheah
School of Prophets 
June/July 2019


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teoct I do not know the Rev. but I thought that the points outlined are of interest, especially the fight between East and West, that is all.
24/07/2019 9:39 AM
Junichiro 'State of Emergency' coming to HongKong soon if these protest do not stop. It is within the Basic Law to request help from the central government if the disturbances could not be contained.
24/07/2019 2:56 PM
Junichiro Chinese military can be deployed at Hong Kong’s request to contain protests, Beijing says
24/07/2019 3:14 PM
bhchong Google search, there is no Rev Dr Alvin Cheah, only Rev Alvin Cheah, and no source or info indicates this article with Rev.
25/07/2019 4:21 PM
qqq3 Professor Zhang Weiwei (张维为): The China Model and Its Implications

best of the best..............

25/07/2019 4:54 PM
chinaman Uk itself in the process of self-destruction. scotland, Ireland all ask for independence post brexit. UK is on the way of complete break out. Thus, in no way to advise China Beijing the best model for HKG. China Beijing do the right thing being firm on its political stand
25/07/2019 5:14 PM
calvintaneng A Prophetic Response to the Hong Kong Students Protest

As I write this article, I am in my guest room in HK after a very powerful and annointed evening of ministry.

My heart is heavy when I see thousands of young people on the streets, protesting against the HK government of the day. The problem is compounded by the fact that Christians joined these protest...singing hymns & worship songs!




25/07/2019 6:58 PM
qqq3 calvin..............its nothing compared to the religious wars of Europe between protestants and Catholics in earlier centuries.............
25/07/2019 7:11 PM
jackfruit I thought Jesus is black.
25/07/2019 8:11 PM
calvintaneng https://www.youtube.com/watch?v=GhknTeqCE_c

25/07/2019 8:35 PM
calvintaneng https://www.youtube.com/watch?v=I2i824Vq708
25/07/2019 9:36 PM
qqq3 calvin....only from your perspective? How about from a broader perspective...............

Jul 25, 2019 4:54 PM | Report Abuse

Professor Zhang Weiwei (张维为): The China Model and Its Implications

best of the best..............

25/07/2019 9:45 PM

Dayang - intrinsic value

Author: teoct   |  Publish date: Sat, 20 Jul 2019, 11:13 AM

Dayang – what exactly is its value

If you are an investor (holding a counter for at least 2 years) intending to invest in Dayang, I urge you go read the three Petronas Activity Outlook (PAO) – 2017-2019; 2018-2020 & 2019-2021. There is a wealth of information and very professionally presented focusing on what is relevant ONLY, very good.

An example:


In one picture / infographic, the whole upstream in Malaysia is shown, wonderful.

Note – there are 349 offshore platforms! (Update - PAO 2019 2021 shows 353 offshore platforms)

I return to the ENTROPHY theory – these platforms need maintenance, ALWAYS (5 – 8 years cycle).

Sydney harbour bridge, San Francisco golden gate bridge, forth bridges in Edinburgh and many other such bridges – the fact is when the contractors finished painting this end, they must return to the other end and start all over again.

So, WORK is always there, 349 platforms!!! And growing.

Unfortunately, it is not clear from the PAO what is that one critical equipment required to carry out this maintenance work. This is, the Accommodation Work Barge or Work Boat.


Dayang Opal (left) built in 2012, WORK BOAT (WB) accommodate 197 persons with lifting capacity of 45 tonnes at 41.2m boom length. Dayang Pertama (right) built in 2005 – 189 persons, 25MT at 43m.

Above is a typical Accommodation Work Barge (AWB) that accommodate 300 persons and the crane capacity is 300 tonnes.

This is OFFSHORE; no home to go back to, or just drive down the road to the hardware shops to buy material that is missing, etc. These vessels are a MUST.

Having these vessels will be the edge, some call it MOAT, some, the barrier to entry.

Vessels not in used (in anchorage) is as good as scrape metal the longer they are not used. Read ICON article by Capt. Hassan Ali (https://www.theedgemarkets.com/article/icon-offshore-set-sign-debtrevamp-deal-month).

It is obvious Dayang (with Perdana) is miles away where AWB and WB is concern. For either Carmin or Petra to compete on par with Dayang, they will need to “plant up” with AWB/WB.

In February 2014 (https://www.theedgemarkets.com/article/petra-energy-sell-vessel-perdana-petroleum) there were talks between Petra and Perdana to sell / buy Petra Endeavour for US 25M. Ignoring inflation, one unit 300 pax AWB will cost about RM 104M today. And if you order one today, you will only get it about three years later. The odd is stack against you as all the necessary maintenance contracts has already been awarded. Next round will be in 2024. Who will lend you the money to build the AWB under current climate (with so many companies still under water) and without a contract too? Buy one in anchorage but need to drydock and refurbish, say RM 50M (guesstimate)?

(A rich man tried with FPSO and see where that got him albeit it is different sphere but similar, service to oil majors, one Company tried, also FPSO, almost went bust, taken over by the other Malaysian FPSO company –it is not easy to get in regardless one got money or otherwise.)

Furthermore, the age of Dayang (+ Perdana) AWB vessels are younger than Petra’s.

Carimin does not have one unit (AWB) so they will have a tough time muscling in for more job.

Still not convince, here are the profit margins (gross and net) plus free cash flow for consideration.

Dayang (together with Perdana) has a competitive edge (moat) in the MCM and HUC sphere; in fact, one can say, domination, because they have 6 units of AWB, 9 units of WB; double the nearest rival, Petra has only older AWB (3 units) and 4 units WB that come with higher maintenance cost.

And Dayang (green line) can generate cash for future (new vessels) capex compare to the other two.

Thus, the next cycle (2024-2028) of maintenance contracts, Dayang will again win the major bulk of them, sure, no guarantees, but highly likely.


Among the three companies, only Dayang still has founder in the mix. Carimin MD (join 1994) and one other director hold substantial share in the company. Petra directors do not even hold a single share (2018 AR), they have no skin in the game.

Moreover, Carimin and Petra are both involved in other businesses; while Petra’s are all in the oil & gas sphere, Carimin is outside (civil construction). This potentially dilute Board’s attention and focus on the HUC /MCM work and there is no synergy at all.

The closet rival, Petra, with directors having no skin in the game, I do not think there is much "drive", how to replace aging marine fleet to compete and FCF is so low?


Nonetheless, the directors pay, and fees are reasonable, Dayang and Petra coming in at 0.7% of revenue while Carimin is 1.2%. Dayang's revenue is also a quantum leap from the other two, Carimin is the lowest.

I think Dayang directors, especially the founder, have been very competent and know exactly where they want the company to be in the next 5 years, next 10 years and further. Yes, they underestimated the cost to get into Perdana, in hindsight, everything is crystal clear. Who predicted that oil price stayed low for that long?

But as argued above, Dayang requires Perdana, it is symbiotic, management control of the AWBs is important. This provided Dayang with price setting influence, and flexibility in pricing to the various clients. Do not forget, 60.48% of whatever price set by Perdana goes back to Dayang.

Still not convince, another way to look at the situation:

  1. Threat of new entrants – the need for AWB and or WB will dissuade, of course some will try but I just do not see how they can replace Dayang or even “chip” into the market.
  2. Threat of substitutions – newer platforms may come with components that requires lower maintenance; but the current 349 platforms will continue to require maintenance between 5 to 8 years until they are de-commissioned (when – ahh, easily for next 25 years, more later)
  3. Suppliers bargaining power – only Dayang with 65% to 70% of work can resist
  4. Buyers bargaining power – currently Carigali has the power as it has the higher number of platforms, the rest, of course will be based on open tender value. However, due to size of Dayang, it can dictate price that Carimin and Petra will find hard to make good money.
  5. Rivalry among Carimin, Petra and Dayang – the market is curved out for the next 5 years, so there should be no to minimal rivalry. Besides, due to Dayang (+ Perdana) size, Cariman and Petra just could not compete in price.

Oil price - Oil use

This question, future of oil as a source of energy to the world, the fear that it is coming to an end soon, well I cannot tell what the oil price would be, but I can tell you oil will continue to play a big part as a source of energy to the world at least until 2050. Please read all 15 pages of the following report from: https://www.oxfordenergy.org/wpcms/wp-content/uploads/2019/07/The-Energy-Transition-and-Oil-Companies-Hard-Choices-Energy-Insight-51.pdf?v=f5c3020d846f

When I finished Form 5 in mid 70s, there were talk that oil will run out in 10 years (in Malaysia). Then when I had my first kid in late 80s, again oil will run out in 20 years, today, oil is still being produce in Malaysia.

Extraction technology does not stand still, now we are talking about enhanced oil recovery, in the future, the above report provides some glimpse. And, new fields are being found.

I will now attempt to determine the intrinsic value of Dayang, in fact I will not. There is this website – Unclestock (https://www.unclestock.com/#!s=5141.KL) does it all. ROC, ROCE, ROIC and more. (Thanks US for internet.)

Unclestock did not stop there, it went on to cash flows in various metrics and intrinsic value (IV) based on so many different methods – DCF, Warren Buffet, Graham, Lynch, etc., all in all 10 methods giving results of 0.54 to 5.71 RM/share. And it averages the IV to one figure – 1.82 RM/share.

The cost of equity (CAPM) used is as shown in unclestock, extracted below for easy reference:

CAPM calculated is 9.46%, lower than the many returns (on capital, invested capital, etc). So Dayang is creating shareholder values.

There is no need to further throw in these returns, that per shares and so on, everything is at this unclestock. All these metrics are all very well. It uses current data and spew them out (garbage in garbage out). One can pick and choose the metric to justify one’s view. Who is right who is wrong, well it is all relative?

The question that an investor needs to ask is the future. Next 5 years – 10 years, will DAYANG continue to dominate, make more money, will it continue to have so much business? Answer is yes, yes and YES.

The closest rival – Carimin and Petra, their cash flows will not allow them to plant up (check unclestock if you do not like my charts above). Dayang can easily!

This dominant position should be worth something that I think, the many IV methods did not account for, +18%, gives Dayang intrinsic value as RM 2.15 per share.


  • Dayang has a wide moat – ownership & control of newer 6 units AWBs & 9 units WBs
  • Work is always there – 349 platforms and counting, just more or less, depending on the oil price. During lower for longer period, Dayang’s revenues, 2015-778M; 2016-708M; 2017-695M is still respectable plus excellent FCF.
  • This 5-year cycle – 2019 to 2023 MCM is all firmed, done deal, all RM 3.5B to RM 4B of it, now waiting for results of I-HUC tender.
  • Next cycle – 2024 to 2028 (and future cycles to come), highly likely Dayang will win similar (contract) value if not more.
  • Intrinsic value is RM 1.82 to 2.15 per share.

Gosh so much serious work, here something to lighten the mood.

A man is dating 3 women and is trying to decide which to marry. He gives each of them $5,000 to see what they do with the money.

The first has a total makeover. She goes to fancy salon, gets her hair, nails and face done and buys several new outfits. She tells him she has done this to be more attractive to him because she loves him so much.

The second buys the man a number of gifts. She gets him a new set of golf clubs, some accessories for his computer and some expensive clothes. She tells him that she spent all the money on him because she loves him so much.

The third woman invests the money in the stock market. She earns several times the $5,000. She gives him back his $5,000 and reinvest the remainder in a joint account. She tells him she wants to invest in their future because she loves him so much.

Which one does he choose?


Answer: the one with the biggest boobs.


Thank you all for reading. It has been a most interesting journey for me, learning, understand how to assess, value and understand the business of Dayang.

Also, thanks for the insights provided by so many readers and forum contributors. Hope we all learnt something.

Further thoughts:

Eventually, Dayang will gives dividend again (maybe 2 years down the road) once debt is parred down somewhat.

There is not much R&D apparent in (public) information so far. I am sure Dayang (now considered including Perdana) is doing plenty (plus digitalization) to maintain their No.1 position in the HUC & MCM sector. This is in term of delivery (execution of work, completing timely and within budget).

Doing de-commissioning (of platforms) will be a natural extension and again, Dayang, will be front and central in any tender/contract.

With Petronas support, Dayang (& others) are going oversea – this is positive.

The I-HUC tenders, intense lobbying, may follow the distribution of the MCM contracts if work is distributed like MCM, else, maybe 50% Petra, 50% Dayang (or less as it is in the interest of Petronas to avoid too reliant on one contractor ONLY). Heck, if RM4B is true, 30% will be whooping RM1.2B, spread normally over 3 to 5 years.

Recent changes in substantial shareholders is intriguing to say the least. On balance, should be more positive than negative.

Have a pleasant weekend and Happy investing all.


Labels: DAYANG
  7 people like this.
Armada An Quantum Leap Stock In 2019/2020 So much research done and infos shared ftom teoct .
Big thanx
20/07/2019 11:24 AM
Airline Bobby Sell before uncle koon sells. That's the intrinsic value I believe :D
20/07/2019 11:35 AM
ongkkh Thanks
20/07/2019 12:33 PM
pputeh Having seen the pain so many went through with the lesson many learnt with Heng Yuan (Shell), I will stay away esp if the super investor is promoting the stock. I apologize to you teoct for my comments esp after you had taken so much pain and effort writing these articles. The 'sea' is so full of fishes and I will prefer to catch the 'others' Fools tread where wise man stay away!
20/07/2019 1:24 PM
pjseow teoct , thanks again for coming up with such a comprehensive article on dayang business and future potential . The competitive studies showed that dayang has an obvious edge over the other 2 competitors .
20/07/2019 2:13 PM
probability I think IMO 2020 will boost Malaysian sweet crude production tremendously....
pretty sure it will have explosive effect on Dayang.
20/07/2019 2:20 PM
probability even with the same throughput-production output...all malaysian petroleum producer will double or triple their profit due to significant premium our oil will have against other sour crudes..

this profit will trickle down to midstream and downstream players...

2020 might turn out to be the best year for Malaysia
20/07/2019 2:30 PM
probability imagine the effects on bottom line.. a premium of 15 usd/brl from a premium of 4 usd/brl will have

Australian Pyrenees crude sells at record premium ahead of IMO 2020 – sources 28/05/2019


Australian oil and gas company Santos has sold heavy sweet crude Pyrenees at an all-time high premium of more than $10 a barrel as traders continued to stock up the oil ahead of a ship fuel change mandate, three trade sources said on Monday.

* The 600,000-barrel cargo loading in late-July was sold to a trading company at a premium close to $15 a barrel above dated Brent, they said

* Pyrenees is one of a handful of Australian heavy sweet crude grades that are being sold at record premiums because of strong demand from traders who are storing the low-sulphur oil to prepare for a surge in ship fuel demand when IMO 2020 kicks in.
20/07/2019 3:58 PM
probability Petronas have all the incentives to ensure all their rigs in tip top condition for full swing production....they would need to fill up the vacuum created by the unusable sour crude oil
20/07/2019 4:04 PM
Ricky Yeo What kind of moat does Dayang has? Scale economies, network effect, process power, brand, switching cost, counter-positioning, or cornered resources?
20/07/2019 8:58 PM
Ricky Yeo Another thing: When a website or an analyst start throwing many valuations at you i.e DCF, Graham, Warren Buffet, Lynch, Ricky Yeo etc - you can safely ignore those valuation
20/07/2019 9:01 PM
deMusangking if have so mani problems to ask, better f off lah!!!

20/07/2019 9:02 PM
Ricky Yeo hahah!
20/07/2019 9:05 PM
probability TeoCT, what was the cost of equity used to derive the Intrinsic value? Thats quite important to know..as it means even if you buy at the esrimated IV, your growth..i.e return is as per COE.

Thanks for sharing this Unclestock link. Need to subscribe
20/07/2019 9:31 PM
probability ok i got it...they had used 9.5%


a lot of information there... interesting site.
21/07/2019 2:39 AM
coolio Wowww..the unclestock website is super cool.. thanks!!
21/07/2019 6:29 AM
teoct Thank you all for the likes, comments and sharing. Indeed, pputeh, one should stay within ones competency. Mine is oil & gas. But did you not like the joke?

deMusangKing, I was reminded of this: Mother Teresa was wandering the corridor and heard a young Sister shouting "F@$# off to the birds on the window ledge". She came in and advised, "Sister, all you had to say is shoo and the birds will F@$# off".

But thank you for visiting and appreciate it very much.

probability, yes CAPM is 9.5% and unclestock is indeed interesting and supercool. This will add to my laziness in studying new counters. I have included it in the write-up to avoid uncertainties. And importantly it is less than the several returns (on capital, equity, etc) for 2018. A positive sign.

Mr Yeo, interesting queries:

a) scale economies, you meant "economy of scale" - yes, Dayang certainly has economy of scale as their vessels will be used much more compared to the other two. Much like Airasia - keep the planes in the air. Base cost divided by more hours used, that is why I said Dayang has pricing power, price setter rather than price taker.
b) network effect - from my limited knowledge, this is more for internet type of businesses like Facebook, Google, etc. But, all the PSCs, production sharing contractors, (Shell, Carigali, ROC etc) - users, will definitely know Dayang and had used their service one time or another and will have experienced their capability and quality of delivery, which is good as far as I know.
c) process power - Carimin, Petra and Dayang will have similar process to implement the MCM works as this processes is quite universal in the other part of oil and gas regions. It will be the quality of delivery (QA/QC) and on time that become important and more importantly the equipment (in this instance, AWB/WB vessels) to deliver the MCM services.
d) Brand - in Malaysia, I would say Dayang has Brand power (in O&G, known to deliver), how to quantify, I am at a lost. In the region, Dayang probably known, but each Nation has their own peculiar requirements that may have impeded Dayang from forging outside Malaysia. The contract in Turkmenistan is via Petronas.
e) switching cost - to the PSCs that has contracts with either Carimin and Petra, it will cost them to switch to Dayang mid-way through current contracts. They will only do so if their appointed contractors are not performing or there is certain critical work that need doing as Dayang has the capability and capacity to response to quickly. However this type of work is rare and Dayang will charge an arm and a leg.
f) counter-positioning - I am at a lost here, looking forward to your clarification.
g) cornered resources - in a way yes. As the vessels under Dayang (& Perdana) are being used (generating cash) while those of Petra, ICON and Sea-link are in anchorage, the longer, the worst off for them. The PSCs are very particular that vessels meet the sea going standards as life is at stack (reputation risk), and these vessels need to be dry-dock every so many years. Each dry-dock will cost millions. Now if there is no jobs, obviously postponed and the longer the postponement, the higher the cost to dry-dock. So, vessels of Dayang becomes more valuable as they are always able to meet requirements. It is not in the conventional sense that Dayang owned all the AWB/WB, then no.

"you can safely ignore those valuation" - I am a bit lost here. Appreciate if you will advice, how then, to value Dayang's intrinsic value.

I was intrigued to actually find that there are so many ways to value a company and I am sure different method will probably be applicable to certain type of company and not to others. I am just too lazy to find out (if that is what you meant). A statistical average sound like a decent estimate of all the different methods at unclestock, after all, these are all estimates, no right nor wrong.

Nevertheless, many thanks for the interesting queries. I hope the clarification clear some (if not all) of the issues.

Happy Sunday.

p/s, gosh all comments received are serious, I hope the joke towards end help some.
21/07/2019 11:22 AM
teoct probability - thanks for sharing on the potential higher prices for Malaysian crude. Hibiscus will benefit more than Dayang in this particular case.

Keep them coming mate. Take care.
21/07/2019 11:28 AM
shankarr007 thanks for shareing this
21/07/2019 4:29 PM
coolio On unclestocks.com, look like the Cash and ST investment in the Balance sheet are wrong from 2016 onwards
22/07/2019 6:29 AM
teoct coolio, yes it is different because unclestock considered deposit placed with banks to be not as liquid as unit trust (ST Investment) - "very liquid assets", that is the term unclestock used. Deposit placed with banks might be used as collateral for loans and unclestock has been conservative here.
22/07/2019 9:13 AM
dusti Cold hard truth? Dilution of directors attention? Malaysian directors so incompetent? Rate this C.
22/07/2019 11:13 AM
teoct dusti - cold hard truth? Maybe warm truth, not hard as it is a qualitative assessment. But, there is always a but, civil construction industry is one notoriously bad paymaster. There is that possibility of diversion of fund meant for MCM work to the construction work to maintain that (civil) project. When this sort of decision put to the Board, what do you think? I have seen many companies through wanting to increase "shareholder return" (sometime I wonder which shareholder's return) get into jam. The possibility is there.

Now, I am sure all of these three will have 5-years plan to develop the company. Surely capital (working or PPE) would be required. In Petra, they will need to go back to the respective major shareholders to seek approval or even funding (RI/PP). Hey, directors authority (spending) levels are also set, OK. If one research who the major shareholders are, one would come away with reservation/doubt. The major shareholders likely say, fund from internally generated fund or borrowing. With the type of cash flow, most unlikely, so the Board will be frustrated and dishearten. As Mr Yeo said, need CAPEX to renew vessels, etc. which company will have the capability?

Incompetent - I do not think that these (above) are sign of incompetence. But the choices presented for decision making is such. Also, most likely, (independent or otherwise) directors are selected such that they share major shareholders thinking.

A company with founder as director would more likely make decision that benefit him as a shareholder (and more likely minority shareholders too). Sometime it is not RM 1,000 / RM 10,000 / RM 100,000 or RM 2M but RM 800 M decision (RI/PP & sukuk). He himself has to come out with millions as well, do not forget that.

Ok C, fair I suppose without much "hard" facts except my conjecture.

Happy investing.
22/07/2019 4:06 PM
shankarr007 https://www.cgsong.co/
<a href="https://www.cgsong.co/">cg song</a>
20/08/2019 7:24 PM
shankarr007 <a href="https://www.cgsong.co/">cg song</a>
20/08/2019 7:25 PM
shankarr007 https://www.cgsong.co/
20/08/2019 7:25 PM
teoct As was mentioned in the article there was intense lobbying. Subsequently, market here-say was the I-HUC cancelled. Carigali had no choice but to proceed to award the HUC contracts accordingly as they have the most new platforms to install and commission.

Petronas Carigali being the largest operator in Malaysia awarded 3 contracts for HUC to Carimin (Angsi only), Dayang (P Msia exclude Angsi) and Petra (Sabah & Sarawak). Unfortunately no value was given in the announcements. Maybe in value would be 15% (Carimin) / 35% (Dayang) / 50% (Petra) of a total value of around RM 1B to 1.5B. Dayang portion would be RM 150M to 225M, not bad at all.
16/09/2019 11:43 AM


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